With longer life expectancies, rising healthcare costs and the demise of traditional pension plans, most people worry about having enough money to last through their retirements–and wonder whether they’ll be able to retire when the time is right. To avoid these concerns, you need a retirement plan that provides enough financial freedom to accomplish your post-retirement goals, whether that includes traveling, visiting family, volunteering in your community, or all of the above.

One of our most requested services at Paragon Wealth Management is our retirement planning services. We understand that each family’s situation is unique, and we offer a custom plan that is catered to your individual needs.

Below are excerpts from an article about planning for retirement and creating a retirement planning strategy.

Excerpts taken from BrookfieldNOW

Planning for retirement means far more than simply accumulating a nest egg for the years when you’re no longer working. It involves developing a long-term investment strategy that helps you address this critical goal without losing sight of your more immediate financial concerns, such as paying your mortgage or sending a child to college.

Where Will Your Retirement Nest Egg Come From? You will potentially need 70% to 80% (or even more) of your pre-retirement income to maintain your standard of living in your retirement years. Therefore, before you can formulate a cohesive retirement plan, you need to determine what your sources of income will be in retirement.

• Individual Retirement Accounts (“IRAs”). If you don’t have an IRA, you could be passing up a valuable opportunity to save for your retirement. Whether you choose a traditional IRA or a Roth IRA, the same basic tax-favored principle applies: savings in an IRA get the benefit of tax-deferred growth. As a result, an investment in an IRA allows you to potentially accumulate more assets than if you had invested the same dollars in a taxable account.

• Your Company Retirement Plan. Past generations relied on company pension plans to take care of their retirement needs. While many companies still maintain defined benefit plans, many have switched to or added defined contribution plans, such as 401(k) plans. With a 401(k) plan, the responsibility is on you to contribute to the plan and determine how your savings will be invested.

One key advantage of 401(k) plans is that they offer tax-deferred savings. That means that you do not pay taxes on your contributions or on the earnings accumulating in the plan until you make a withdrawal. Consider making the highest allowable contribution to your employer-sponsored retirement plan.

• Your Social Security Benefits. These days, Social Security represents only a small portion of the income most retirees will need. According to a study done by the Employee Benefit Research Institute, individuals 65-years-old or older whose post-retirement annual income was at least $50,000 would generally derive only 14.3%3 of their retirement income from Social Security.

The Responsibility to Plan Is Yours The majority of the income you’ll need in retirement will most likely come from you. That’s why it’s vital that you take the time now to develop an intelligent, practical retirement plan that can help you pursue your retirement income needs.

A good way to start is to participate to the fullest extent possible in a 401(k) plan (if your company provides one) and make annual contributions to an IRA. Both give your money the potential to grow on a tax-deferred basis.

The information in this article is based on sources believed to be reliable, but its accuracy cannot be guaranteed.

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