Living out your retirement dreams in Albuquerque, NM, is an exciting prospect. Visions of turquoise skies, breathtaking landscapes, and a slower pace of life likely dance in your head. But before those dreams fully bloom, there’s an important step: building a solid retirement income plan. It might seem daunting, but with the right strategies and a little expert guidance, you can create a sustainable financial foundation for your golden years.

Here are six key areas to consider as you craft your personalized drawdown plan, according to the Social Security Administration:

Tax-Smart Planning for a Secure Future

Uncle Sam shouldn’t take a bigger bite out of your retirement pie than necessary. A financial advisor in Albuquerque, NM, can be your tax-savvy partner. They’ll help you explore strategies to minimize your tax burden throughout retirement. This might involve utilizing tax-advantaged accounts like IRAs and Roth IRAs to their full potential, or even considering tax-efficient investment options. Remember, every dollar saved on taxes translates to more money for that dream vacation or cherished hobbies. A study by the AARP found that retirees can save tens of thousands of dollars throughout their retirement by making smart tax choices.

Demystifying Required Minimum Distributions (RMDs)

At age 72, the IRS requires minimum withdrawals from certain retirement accounts. Don’t let RMDs become a source of confusion or penalty fees. A financial advisor can help you factor them seamlessly into your drawdown plan, ensuring you meet withdrawal requirements while optimizing your overall retirement income strategy.

Social Security: A Strategic Decision

Social Security is a crucial source of income for most retirees. A financial advisor can guide you in making informed decisions about claiming your benefits. They’ll consider your full retirement age (FRA), projected lifespan, and other income sources to determine the optimal filing time. Remember, claiming early can permanently reduce your monthly benefit, so a strategic approach is key. For a deeper dive into Social Security’s impact, visit our blog post: Understanding Secure Act 2.0’s Impact on Your Savings in 2024.

Unveiling the Tax Implications of Social Security

While Social Security provides a safety net, it’s not immune to taxation. Depending on your total income, a portion of your benefits may be taxable. A financial advisor can help you understand these tax implications and seamlessly integrate them into your overall retirement income plan.

Crafting a Sustainable Withdrawal Rate

A critical element of your drawdown plan is determining a safe withdrawal rate – the amount you can remove from your retirement savings each year without depleting the principal too quickly. A financial advisor can guide you in establishing a sustainable rate that considers your desired lifestyle, projected investment returns (according to a study by Fidelity Investments, the historical average return for a balanced portfolio is around 7%), and inflation. This ensures your retirement savings keep pace with your needs, allowing you to enjoy the golden years without financial worries.

Considering Healthcare Costs

Healthcare costs are a major expense for retirees. According to Fidelity Investments, a healthy 65-year-old couple retiring in 2023 can expect to spend an average of $315,000 on healthcare throughout their retirement. A financial advisor can help you factor these costs into your retirement plan and explore options like Medicare, supplemental insurance plans, and Health Savings Accounts (HSAs) to manage these expenses.

Partnering with an Albuquerque Financial Advisor: Your Retirement Roadmap

Retirement planning can be a complex journey, filled with twists and turns. But you don’t have to navigate it alone. A qualified financial advisor in Albuquerque, NM, can be your trusted guide, providing invaluable expertise as you develop your personalized retirement income strategy.

Here’s how a local financial advisor can empower your retirement journey:

• Develop a Tax-Efficient Investment and Withdrawal Plan: They’ll help you create a strategy that minimizes your tax burden and maximizes your retirement income.
• Craft a Sustainable Withdrawal Rate: Together, you’ll establish a safe withdrawal rate that ensures your savings last throughout your retirement.
• Make Informed Decisions About Social Security: They’ll guide you through the complexities of claiming Social Security benefits, considering your unique circumstances.
• Navigate RMDs and Other Retirement Account Regulations: Your advisor will ensure you understand and comply with RMDs and other regulations surrounding your retirement accounts.
• Plan for Healthcare Costs: They’ll help you factor in healthcare expenses and explore options to manage them throughout your retirement.

Getting Started

Taking the first step is the hardest, but Oakmont Advisory Group wants to make it easy for you. Start today by chatting with one of our advisors and set up a no-obligation 15-minute Chat.