Make updating your retirement plan a New Year’s resolution

This time of year is replete with retrospectives on 2020 and stating goals for 2021. One New Year’s resolution that should be at the top of your list is updating plans for retirement.

Kiplinger’s recently published a list of the 10 Most Tax-Friendly States for Retirees, which gives some good food for thought.  No matter where you live now or plan to retire in the future, having a thoughtful, but flexible, plan in place is crucial.

Eric Toole, one of the principals with Antares Wealth Management, works closely with clients to help them make informed decisions about their financial future, based on their unique circumstances.  Everyone’s circumstances and goals are different, but there are a few questions everyone should be prepared to answer when establishing or updating a retirement plan.

“The No. 1 issue people face when they approach retirement relates to cash flow.  They ask themselves,  how much cash flow can I count on and where is it going to come from,” Toole said.

He added, “For entrepreneurs, that is a particularly important question and can be significantly impacted depending on whether one keeps or sells a business in making a retirement transition.”

Having your money properly invested – before and throughout retirement – is critically important to long term success.  This applies to your personal wealth and the assets of your business (many business owners hold unnecessarily high cash balances that could be better used).  How your money is invested should be continually reviewed and aligned with your long-term goals.  You work hard for your money.  By that same turn, your money should be working for you!

Here are a few other considerations to bear in mind when looking toward retirement:

  • What will be the primary source of income and cash flow in retirement?
  • Do you plan to have a secondary and supplementary source of income?
  • Do you need the same level of cash flow in retirement that you have now?
  • What lifestyle changes do you anticipate in retirement? Do you plan to travel more, care for grandchildren and/or provide educational funding, purchase a second home, or move to another state?
  • Does the state where you live or plan to live offer tax incentives for retirees?
  • How do you plan to transition your business equity into retirement income, or do you plan to continue to run your business?
  • How do you plan to utilize Social Security?
  • What is the status of your personal investment portfolio?
  • What are your legacy goals? How and when would you like to gift to family members and charities?

It’s never too early to think about how life will look when you no longer work as much as you do today. Even if you have retirement and estate plans in place, one thing 2020 has taught us is that life circumstances change. The first part of the year is a good time to review those plans and see if they still make sense for your family and if you are getting closer to realizing those goals.

There are a lot of moving parts to retirement and wealth planning and our team at Antares Wealth can help put those pieces together.

Eric Toole is a principal with Antares Wealth Management. He can be reached at etoole@antareswealth.com.