Is retirement in your near-term plans? If so, this may be a busy time for you. You could be busy taking your final planning steps and shoring up your savings. You also may be making plans for after you retire, such as vacations, new hobbies and trips to visit family. While this may be an exciting time, it’s also a good time to evaluate your retirement planning and identify any potential gaps or risks.
A financial professional can help you with this process and recommend action steps to strengthen your financial foundation as you head into retirement. If you’re not working with a professional on your retirement strategy, now may be the time to do so. Below are three key questions to answer:
It’s tax time. Many retirees assume that their tax exposure will go down once they leave the working world. After all, they’ll no longer have income from a job. Even without a job, though, many retirees still face tax exposure. Many common sources of retirement income, such as Social Security, pensions and qualified account distributions, are taxable.
If you are recently retired or approaching retirement and haven’t budgeted for taxes, you could be in for a surprise. Your tax exposure could reduce your discretionary income and limit your ability to live the retirement of your dreams.