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Navigating the Financial Challenges of Planning for Retirement

Life Stages Blog Series Part 7

From NebraskaLand Bank to you, we’d like to say congratulations. Retirement marks a life milestone characterized by completion, successfully raising kids, concluding a long and rewarding career, and doing countless other things that younger people have yet to do. You’ve been to many places and worn many hats, and now it’s time to settle down now that you’ve reached this point in your life. You’ve finally made it.

As you transition from your final weeks or months at work to a work-free life, you begin to realize that perhaps there’s more to the financial side of retirement planning than you once thought. Beyond estate planning and associated legal matters, there’s quite a bit that you have to keep in mind to ensure that you and your spouse will have a sufficient amount of money to live on now that you’ve decided to stop working.

Our Community Bank Can Help You Retire Comfortably, Safe and Sound

Of course, the decision to retire is often a personal one, as the ideal retirement age depends on many factors: your chosen occupation/career path, where you live, where you’d like to retire, how comfortable or lavish of a lifestyle you’d like to live, and so forth. All things considered, retirement — and deciding when to do it and how to go about it — is a big deal. Fortunately, the team at NebraskaLand Bank is here to assist you in the financial aspects of retirement planning.

As the final installment of our seven-part blog chronicle on navigating and planning for the financial ins and outs of major life milestones, we end this journey on planning for retirement. From embarking on your first career job to getting married, starting a family, sending your kids to college, and enjoying an extended vacation as parents, you’ve accomplished a lot at this point whether or not you’ve perfectly followed this life track. Truly, looking back on your life is something worth celebrating and remembering.

Below, NebraskaLand Bank offers financial advice on retirement planning. To learn more about Individual Retirement Accounts (IRAs), please visit here. Our blog post about diversifying your retirement savings is also a useful resource. As always, to learn more, feel free to contact us at any time. Let’s get started.

Do Some Research and Familiarize Yourself With Terminology

This might not be the most exciting or entertaining reading that you’ll come across, but to optimize your retirement planning and enjoy the rest of your life without any financial worries, it’s important to understand these need-to-know financial terms. Consider the following:

  • Fiduciary: this is a professional who is required by law to act in the best interest of his or her client, i.e., you. A fiduciary is someone that you can trust. If you’re working with a registered investment advisor, they must adhere to fiduciary laws. Broker-dealers (sometimes simply called “advisers”) typically do not have to act as a fiduciary.
  • Registered Investment Adviser (RIA): As a registered member of the Securities and Exchange Commission or SEC, these investment advisers are compensated for providing you with advice on certain investments, but are also required to act in your best interest as a fiduciary.
  • Financial Planner: As more of a general term, a financial planner oversees and assesses every aspect of your finances and can also help you manage your investments. Financial planners are not inherently regulated but may be regulated based on the types of services they offer.
  • A 401(k) plan: This is a retirement savings plan provided by employers. With a 401(k), you can save for retirement and defer income taxes on your contributions (and subsequent earnings) until withdrawal. Depending on your employer, they may match some or even all of your contributions.
  • Individual Retirement Account (IRA): This is a popular savings option for individuals in which you can contribute up to $6,500 a year if you’re over the age of 50. Like a 401(k), earnings are tax-deferred until you begin withdrawing money at the age of 59 and a half.
  • Roth IRAs: This is a variation of a traditional IRA in which contributions to the account are made with post-tax money and any future earnings will be tax-free.

Now that we’ve identified some key terminology related to retirement planning, we’ll address some other points worth your consideration.

Determining The Age You Should Start Social Security

If you’re “over the hill” or approaching “the hill,” it may not be fun to think about aging and the fact that your younger days are well behind you. Receiving countless AARP letters in the mail may feel like the world is harassing you about your age, but just know that planning for your future is better done sooner rather than later.

These days, the retirement spectrum is rather convoluted given the multitude of different life paths and how you want to shape the rest of your life. In this, some people retire in their early 40s all the way to their late 70s or even later. It just depends on your personal situation. This can be a fickle matter because while working longer will reduce the chances of eventually running out of money, delaying retirement for too long might mean missing out on good health or the companionship of friends or family to enjoy it with. After all, isn’t the whole point of retirement to enjoy the rest of your life with your loved ones while no longer working?

Social security factors include how long you’ve been working with or building up your retirement savings vehicles (i.e. a 401(k) and an IRA or Roth IRA) as well as other annuities and separate accounts. The future state of the stock market, tax reform laws, and estate planning considerations will also affect the timing of accepting social security and whether or not you should wait to do so.

Accept That You Can’t Plan For Everything

No matter how much research you do, who you work with, how early you start saving, or how hard you work during the end of your career, there’s no telling what life has in store in the future. Though we don’t want to come across as overly pessimistic, it’s good to go into retirement planning knowing that you’re prepared but willing to accept the curveballs that life can throw at you.

This is why a central retirement decision is not a bad way to go. A central retirement decision is generally a safe bet, offering a fairly universal balance of working long enough to secure enough funds to live comfortably on, while also retiring early enough to live the rest of your life comfortably.

Use NebraskaLand Bank As a Key Retirement Resource

After spending so many years of your life working hard for you, your spouse, and your family, it’s hard to know what the best financial options are to ensure a comfortable and secure quality of life. That’s why our advisors, bankers, and team of dedicated and friendly banking professionals are here to help you make the right decisions. At the end of the day, that’s our passion — and our job.

Let’s make retirement planning a breeze for you. Get in touch with NebraskaLand Bank for assistance.