The following questions can help you identify issues and risks to consider as you develop your retirement income strategy. It can also serve as a discussion guide for meeting with a financial advisor.
Withdrawal strategy – Creating retirement income
- At what age will you choose to begin receiving Social Security benefits?
- Have you projected the effect of mandatory distributions on your retirement tax situation?
- Will taking withdrawals from IRAs or qualified plans prior to age 70½ reduce your income tax bills throughout retirement years?
- What is your portfolio withdrawal rate, and how does it account for market risk and inflation?
- How well do you understand the importance of ordering your withdrawals? Which accounts are you tapping first—taxable or tax-deferred accounts, or traditional or Roth IRAs?
- Do you understand the long-term impact of taking portfolio withdrawals in a declining market?
- Is your asset allocation properly aligned with your risk tolerance and time horizon? In addition to fixed-income investments, it may be important for you to maintain an appropriate level of equity investments.
- Do you have multiple retirement accounts and a number of financial institutions? Does it make sense to consolidate some of your accounts to make it easier to manage?
- Which strategies are you using to generate the portfolio income you need? Interest payments from bonds and cash equivalents? Stock dividends? Annuities?
Expenses and longevity
- Have you estimated your retirement expenses?
- What amount have you set aside for non-discretionary expenses? For discretionary expenses? For medical and long-term care costs?
- Given your family's health history and your current age, how many years of retirement income do you expect to need?
- Do you have a 20- or even a 30-year retirement plan in place?
- Have you planned for an appropriate annual inflation rate increase through your retirement years?
- What steps have you taken to position your retirement portfolio to help keep pace with inflation and preserve your purchasing power?
- Have you planned for an estimated $376,000 in projected lifetime healthcare expenses?
- How are you planning for income taxes, and minimizing the amounts you will owe?
- Should you consider converting some or all of your Traditional IRAs and/or qualified plan assets to a Roth IRA or annuity?
Medical and long-term care expenses
- Which funds are earmarked to cover medical insurance coverage and potential long-term care expenses?
- Have you adequately accounted for increases in these premiums and expenses?
- Do you have a clear understanding of the impact long-term care costs may have on your budget, and what role long-term care insurance can play?
We are here to help you take the steps that are right for you. To get started, contact a Wells Fargo Retirement Professional today.