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Retirement Checkup

Retirement is not just something that happens late in life. It’s something that you create now with the decisions you make every day. From choosing investments to protecting yourself and your family from risk, you make financial decisions that may help enrich your life not only in retirement, but each step along the way.

When you’re in your fifties, chances are you’re thinking about when you want to retire and how much income you will need in retirement. Because of fewer pensions and other sources of reliable income, much of your retirement income will come from your personal savings. That’s why now is the time to continue to stay focused on maximizing your retirement savings while also looking ahead to develop a retirement income plan that supports your vision of retirement.

Put your retirement in focus

In your fifties, you may have a better feel for how you will spend your time in retirement and may even have a date in mind when you'd like to retire, or start phasing into retirement.

Have your goals or expectations for retirement changed? Before you can make sure you have saved enough to create the income you will need in retirement, you need a clear picture of where you're headed. This is a great time to meet with a Wells Fargo Retirement Professional to see if you're on track to reaching your goals. 

Make the most of your retirement investments

Just as you see your doctor or dentist every year for checkups, it's also a good idea to review your retirement savings each year. It's important to fine-tune your investment strategy to make sure you're still on track to meet your goals.

By this time, you may also have qualified employer sponsored retirement plans (QRPs), such as a 401(k), 403(b), or governmental 457(b) with former employers that you can roll over into an Individual Retirement Account (IRA) at Wells Fargo to make it easier to manage your savings and have more control over your investments.

Please keep in mind that rolling over assets to an IRA is just one of multiple options for your QRP. Each of the following options are different and may have distinct advantages and disadvantages.

  1. Roll over your assets into an IRA
  2. Leave assets in your former employer's QRP, if QRP allows.
  3. Move your assets directly to your new/existing employer's QRP, if QRP allows
  4. Take your money out and pay the associated taxes

When considering rolling over assets from an employer plan to an IRA, factors that should be considered and compared between the employer plan and the IRA include fees and expenses, services offered, investment options, when the IRS 10% additional tax for early or pre-59 1/2 distributions no longer applies, treatment of employer stock, when required minimum distributions begin and protection of assets from creditors and bankruptcy. Investing and maintaining assets in an IRA will generally involve higher costs than those associated with qualified employer-sponsored retirement plans. You should consult with the plan administrator and a professional tax advisor before making any decisions regarding your retirement assets.

Maximize your retirement savings

If you are age 50 or older, you are eligible to make additional or “catch-up” contributions to some retirement savings accounts.

  • If you’re not already doing so, think about contributing up to the maximum amount plus an additional “catch-up” amount per year to your 401(k) or QRP. If you’re not able to do this, try to contribute at least as much as the employer match, otherwise you are leaving money on the table.
  • Consider contributing to an IRA in addition to your QRP. If you are age 50 or older, you can contribute an extra $1,000 “catch-up” contribution.
  • If you're behind in your savings goal, take a look at catch-up strategies.

Manage your debt with retirement in mind

Start mapping out your income and expenses, creating a comfortable balance that leaves you the flexibility to enjoy life with only the amount of debt you truly need.

  • Consider the pros and cons of paying off your mortgage before you retire. Doing so may eliminate a major monthly expense, but you need to balance that against any tax benefit you might be giving up.
  • Effective use of debit and credit cards can help you monitor your expenses.
  • Before you borrow, carefully analyze the impact any major purchases may have on your cash flow.
  • Look over your outstanding debt where you are paying higher interest, like credit cards, to determine if a consolidation loan may make sense for your situation.

Help preserve your retirement income — and legacy

Insurance can become a valuable income and estate planning tool as you approach retirement. Consider helping protect your future retirement income through products such as annuities and life insurance.

  • Life insurance can help replace pension or Social Security income in the event you outlive your partner or spouse.
  • If you have specific legacy goals or are concerned about estate taxes, life insurance can be used to create an inheritance or help meet estate tax obligations.
  • Consider helping protect your future retirement income through products such as annuities.
  • Look into long-term-care insurance — the younger you are, the less expensive it is. Long-term care insurance can help meet expenses that could deplete your assets in the case of an extended illness.
  • Beneficiary designations on any IRAs, QRPs, annuities, and life insurance policies supersede any instructions in your Last Will and Testament or trust, so be sure they are up-to-date.
  • Meet with your Financial Advisor or Retirement Professional to update any beneficiary designations and discuss ways you can maximize your retirement savings, through your lifetime and your family’s lifetime.
  • If you are a small business owner, review business agreements and transfer plans.

Develop a retirement income plan

A retirement income plan helps make the transition from accumulating assets to retirement income generation. A Wells Fargo Retirement Professional can help you develop our retirement income plan that:

  • Analyzes your essential and discretionary expenses to create a realistic retirement budget.
  • Identifies sources of income in retirement including Social Security, retirement savings, pensions, investments, etc.
  • Determines how and when to take withdrawals.
  • Builds an investment strategy that generates income in retirement while giving your assets the potential to grow.

Learn more about earning income in retirement.

By staying on track financially as you get closer to retirement, you are better prepared to create the future you want. We are here to help you take the steps that are right for you.

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