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Do YOU Have a Boiler Plate Retirement Plan?

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Picture13Whether we like to admit it or not, most of us do indeed have a boiler plate retirement plan.  We start work and immediately sign up for the 401(k) plan with the employer match. We assiduously contribute to the plan and our employers assiduously match our contribution. We don’t know the first thing about investing so we’re advised to put our contribution into the “higher risk” plan if we’re young, “average risk” plan if we’re in the middle of our careers, and “low risk” plan if we’re nearing retirement. That’s where the investment/retirement planning ends for many of us. Maybe we move the funds around now and then, maybe we don’t. By the time we hit 50 and check to see the “millions” that have supposedly accumulated in our plans, we’re disappointed to see that we’re nowhere near ready for retirement.

What’s more, what we have accumulated will be further reduced by the time we retire: we’ll need to pay taxes, the cost of living will be considerably higher and we have no idea what our medical costs may be. So what do we do?

Before panic sets in, there really is something that you can do. As the famous Stephen Covey famously said the first step is “begin with the end in mind”, then you seek out the adviser who can help you reach that end.

Beginning with the end in mind means you need to ask yourself some tough questions:

  1.  At what age do you want to retire?
  2. How much annual income (after taxes) do you need to retire comfortably? Remember you’ll need to adjust this for inflation!!
  3. What is the value of your current retirement plan and, based on historic growth, what will it be by the time you retire?
  4. How much of that plan will go to paying the taxes due on that income?
  5. Once all of this is taken into account, will you have enough to retire and if not, what’s your plan to get there?

Man on Ladder 2While these questions may seem initially overwhelming, with the right adviser, they needn’t be, but here’s a hint: the right adviser is most likely NOT your 401(k) adviser.  When looking for the right adviser, make sure you find someone who can not only estimate the future value of your current plan based on historic growth, but also account for inflation and taxes to give you a realistic picture of “the bottom line”. The right adviser should also give you options to minimize your tax bill as well as increase retirement income to offset inflation. You really do have more options available to you than you think. Click HERE to download GFG’s Wealth Management & Retirement Handbook to check out just a few of them….


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