Portfolio rebalancing, how to budget your money, what’s an HSA and who needs one? Preparing for retirement is hard. From personal finance basics to retirement planning and everything in between, we’ve got a few ideas to make life a little simpler. Contact MCF with any questions.
There are all kinds of “rule of thumb” numbers floating around for how much income you’ll need in retirement, but they are just that — guidelines, not hard and fast rules that will necessarily apply to your particular situation. Budgeting for your retirement is a bit of a guessing game however clarifying your goals and expectations will make it easier.
It's important to work with an attorney and possibly a tax advisor / planner on your estate plan. The attorney's role will include guiding you through the creation of fundamental estate planning documents.
1. Don’t Cash Out Retirement Plans When Changing Employment When you leave a job, the vested benefits in your retirement plan are an enticing source of money. It may be difficult to resist the urge to take that money as cash, particularly if retirement is many years away. If you do decide to cash out, understand that you will very likely be required to pay federal income taxes, state income taxes, and a 10 percent penalty if under age 59½. This can cut into your investments significantly and negatively impact your retirement savings goals! When changing jobs, you generally have three options to keep your retirement money invested – you can leave the money in your previous employer’s plan, roll it over into an IRA, or transfer the money to your new employer’s plan.
Market volatility is a term used to describe the daily fluctuations, large and small, of the stock market. While volatility is an inevitable element of investing, markets have tended to reward those investors who don’t get rattled during market declines and stick to a long-term investment strategy. There are a wide range of factors that may affect market volatility such as world events, performance of certain sectors of the market, political factors, and natural disasters. Most of these factors are beyond anyone’s control and happen unexpectedly. So, what is a retirement investor to do when volatility strikes?
It is important to conduct regular check-ups on your retirement plan to make sure you are on track to reach your retirement goals. Below are a few questions to ask yourself, at least annually, to see if (and how) they affect your retirement planning.