Retirement Income Planning Service Michigan -TimothyRobersLLC (2024)

FAQs

Are retirement planners worth it? ›

A financial advisor can help calculate how much you'll need to save for retirement, then make the difficult transition when the time comes. One key area where advisors often add value: figuring out the tricky tax implications of pulling money from a retirement account like a 401(k) or an IRA.

Financial planners are trained to help you accumulate and invest your money. Retirement planners have additional training to help you figure out how to use this money to generate reliable paychecks in retirement.

The process can begin any time during your working years, but the earlier the better. The process of creating a retirement plan includes identifying your income sources, adding up your expenses, putting a savings plan into effect, and managing your assets.

Talk to your employer, your bank, your union, or a financial adviser. Ask questions and make sure you understand the answers. Get practical advice and act now.

Some common retirement mistakes are not creating a financial plan and not contributing to your 401(k) or another retirement plan. In addition, many people take their Social Security distributions too early, don't rebalance their portfolios to match risk tolerance, and spend beyond their means.

Fees can be a huge drag on your portfolio's performance over time, so it's vital to know what you're paying and how much they cost you. Bankrate's investing calculator can show how much those fees will cost you over time. Spoiler: You could easily pay tens of thousands over a career. Uncertain qualifications.

In conclusion, working with a financial advisor can be a great way to achieve your financial goals, but it's important to weigh the pros and cons carefully before making a decision. The cost and the risk of conflicts of interest are the main disadvantages of working with a financial advisor.

It's recommended that you use a fiduciary financial advisor in most scenarios. Not only are they usually more affordable, they are legally and federally held to high ethical standards. Their role, by nature, is designed to serve your best interest and maximize your financial benefit and not their own.

The $1,000-a-month retirement rule says that you should save $240,000 for every $1,000 of monthly income you'll need in retirement. So, if you anticipate a $4,000 monthly budget when you retire, you should save $960,000 ($240,000 * 4).

What is the 4 rule in retirement planning? ›

The 4% rule limits annual withdrawals from your retirement accounts to 4% of the total balance in your first year of retirement. That means if you retire with $1 million saved, you'd take out $40,000. According to the rule, this amount is safe enough that you won't risk running out of money during a 30-year retirement.

At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).

Average Monthly Retirement Income

According to data from the BLS, average 2022 incomes after taxes were as follows for older households: 65-74 years: $63,187 per year or $5,266 per month. 75 and older: $47,928 per year or $3,994 per month.

If you retire with no money, you'll have to consider ways to create income to pay your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.

So, if you're aiming for $100,000 a year in retirement and also receiving Social Security checks, you'd need to have this amount in your portfolio: age 62: $2.1 million. age 67: $1.9 million. age 70: $1.8 million.

Monthly contribution: This is the amount you save for retirement each month. Include contributions to your 401(k) (including your employer match), IRA and any other retirement accounts. Experts recommend saving 10% to 15% of your pretax income for retirement.

But, if you're already working with an advisor, the simplest way to determine whether a 1% fee is reasonable may be to look at what they've helped you accomplish. For example, if they've consistently helped you to earn a 12% return in your portfolio for five years running, then 1% may be a bargain.

Potential negatives of working with a Financial Advisor include costs/fees, quality, and potential abandonment. This can easily be a positive as much as it can be a negative. The key is to make sure you get what your pay for.