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Preparing for Your Retirement

When you think about your retirement, what do you picture? The possibilities are as unique as you are. Many people who are getting closer to retirement can look forward to healthier and longer lives than their parents. With age 60 now considered the "new 40," today's retirees are becoming the first generation to navigate a new life stage between middle adulthood and true old age. 

How will you prepare for this new stage in life? It’s important to make the most of the possibilities while still preparing for unforeseen challenges. 

Even if you've been saving for retirement for decades, you may not have given a lot of thought to your retirement lifestyle. As retirement draws closer, it's time to start preparing for the transition.

Here are three places to start:

  1. Create a realistic plan for your life in retirement: The sooner you bring your retirement into focus, the greater your chances for realizing the lifestyle you want.
  2. Review your plan: Make sure your plans for retirement are in line with the resources you have to fund them. Now is the time to ensure that your retirement income sources and withdrawal strategy are aligned with your goals.
  3. Prepare for contingencies: With retirement lasting 30 or even 40 years, it's important to regularly assess your progress and make adjustments when circumstances change.

Create a realistic plan for your life in retirement

First, consider these questions:

  • What do you want to do in retirement?
  • What is most important to you?
  • Who do you want to spend time with?
  • Where do you want to live?
  • Would you like to continue working in retirement, whether it's a part-time job, a second career or your own business?
  • Do see yourself supporting family members (parents, children, siblings) in the future?
  • How will you balance your travel or entertainment needs with other expenses like food, housing, and health care? After you determine answers to these questions, determine if your goals are in line with your savings.

Review your plan

An effective retirement plan based on a complete understanding of your goals and how they align with your retirement savings can better prepare you to live the retirement lifestyle you desire. Here are a few tips to help you with your plan for retirement:

  • Organize your resources

    • By the time you retire, it’s easy to have a number of retirement accounts at former employers and across multiple financial institutions. It may make sense to consolidate your retirement savings with one provider to help ensure your investment plan is coordinated, making it easier to track your savings, and possibly take advantage of reduced fees.
    • Consider transferring your IRA or rolling over your qualified employer-sponsored retirement plan (QRP), such as a 401(k), 403(b), or governmental 457(b), into an IRA with Wells Fargo where you can get online access to all of your Wells Fargo accounts — in 1 place, with 1 convenient password. Learn more at the Rollover Center.
      Please keep in mind that rolling over assets to an IRA is just one option for your QRP. You generally have four options for your QRP distribution:
      1. Roll over your assets into an IRA
      2. Leave assets in your former QRP, if plan allows
      3. Move assets to your new/existing QRP, if plan allows
      4. Take your money out and pay the associated taxes
  • Each of these options has advantages and disadvantages and the one that is best depends on your individual circumstances. You should consider features such as investment options, fees and expenses, and services offered.

    When considering rolling over assets from a qualified retirement plan (QRP) 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 penalty free distributions are available, 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 employer-sponsored retirement plans.

    You should consult with the plan administrator and a professional tax advisor before making any decisions regarding your retirement assets.

  • Get serious about your income in retirement

    • Refine your plan for how you will generate a reliable income stream from your savings and other resources.
    • At this point, you will want to carefully determine the expenses you will need to cover and how and when you will withdraw money from your retirement savings.
  • Take steps to help ensure you’ll be able to cover essential expenses

    • Depending on your situation, you may want to convert a portion of your assets into an annuity to help create a guaranteed income stream.

Plan for contingencies

Retirement often brings unique challenges and opportunities. When you experience the unexpected, it helps to have your finances and financial documents in order. Do you need — or have — the following financial tools in place?

  • An up-to-date will (in some states, it may also be necessary to set up a trust)
  • Up-to-date beneficiary designations on any IRAs, QRPs, annuities, and life insurance policies, which supersede any instructions in your will or trust
  • A financial safety net to care for a surviving spouse or partner — in many cases, pension and Social Security payments are reduced when one partner dies while expenses remain about the same. Learn ways insurance can work for you.
  • Durable powers of attorney created for your finances and health care — these documents ensure that someone you know and trust is appointed to make decisions for you when you are unable to do so
  • Trusts established if you want to address special issues like blended families, caring for family members with special needs, or charitable giving

Need help creating or reviewing any of these financial safeguards? Your attorney can work with you to make sure your affairs are set up according to your guidelines. Also please feel free to contact us at the number below as we may be able to help answer your questions and refer you to additional resources. 

Make the most of this exciting phase of your life. Learn how Wells Fargo can help you develop a plan for meeting your income needs in retirement.

Still have questions? Request a Consultation

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1-877-493-4727