One of the biggest fears plaguing individuals approaching age 55 is whether they will have enough money to support or maintain a lifestyle they desire.
Number 1: Analyze guaranteed income like pension and Social Security that could expose you to a shortfall. Overall you want to come up with the retirement plan and the first thing you need to do is analyze where your guaranteed sources of income are coming from. Social security, pensions, a beneficiary of the trust are all examples of guaranteed income and those should be identified as they become the baseline for determining how much is needed from your investments.
Number 2: Create a retirement income plan. It is important regardless of your financial station in life to create a well thought-out and well researched retirement income plan. The plan should show you what you will receive as income, what’s guaranteed and what’s required for your investments to live the lifestyle you envision. This is the time of your life when you should take nothing to chance and if you haven’t taken the time to create a detailed plan then you are approaching your retirement years blindly.
Number 3: Understand how different income is taxed. Social Security, money coming out of your retirement plan, dividends, and capital gains are all taxed differently. It is important to understand how taxation works or find a professional who can help explain the various tax laws. A penny saved is a penny earned!
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