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Retirement Planning: Are You Taking Steps to Assure Peace of Mind?

By Steven Joshua Samuel JD, MBA, AIF®

If you plan to stop working within 10 years or so, you may be taking steps to prepare or at least be wondering what you should be doing to feel financially secure.  A Brighthouse Financial survey recently asked people nearing retirement about their concerns and the issues with which they needed help. Here’s what the survey found.

Expenses and Savings

Most people did not have a good estimate of their current spending or what they expected to spend after they stop working. That was true even for 2/3 of the people surveyed who had financial advisors.  Once you know roughly how much Social Security or pension income you’ll receive, having a spending estimate allows you to determine how much more income you’ll need and how close you are to having the investment amount that can reliably produce that income.  Knowing the amount you’ll need to achieve your spending goals and staying on track is one key to financial peace of mind, but 1/4 of the people surveyed hadn’t worked through this calculation.

Social Security

When to claim Social Security is sometimes a complex decision.  Sixty percent of the people surveyed did not seek guidance about Social Security.  The Social Security website,, allows you to see the earnings history on which your Social Security benefit is based, as well as estimates of your benefit at various ages.  It is well worth a visit, first because the earnings history is important, and second, it could be incorrect (mine was) and you can correct it. There is software that financial planners use and which you can also acquire that can help with the decision-making process.

Healthcare Costs

Healthcare costs are a major concern for people starting to consider retirement. Understanding Medicare and what it costs, as well as creating a plan for long term care are challenging but important and worth the time to carefully consider.  Still, 1/3 of the people surveyed had not done so.

Financial Plan

More than 3/4 of the pre-retirees surveyed had not taken at least some of the above basic steps to achieving peace of mind.  Surprisingly, this was the case even for those who had a professional financial advisor.  Whether or not you engage a financial advisor to help you create a formal financial plan, it makes sense to at least put together spending estimates, Social Security or pension income and an investment strategy that fits your goals and appetite for risk.

Residence and Long Term Care, Estate Planning, Taxation, Withdrawals from Retirement Savings, Part-Time Work

Brighthouse survey questions covered a lot of territory, though not all the issues important to people who are within 10 or fewer years of retirement.  For example, where you’ll live and if you become frail and how you’ll manage if you need help with everyday activities are often left to last minute decision making, when choices are limited.

Tax issues, such as whether to convert taxable traditional IRA to Roth accounts, if and when to take capital gains or losses, and other tax issues may be different in pre-retirement and retirement years.  You won’t know how much will be left after taxes for you to actually spend unless you give this some thought.  Similarly, to maximize the money available for you to spend, it helps to think through what order and proportion of withdrawals to take from taxable and tax deferred accounts during retirement.  If your plan includes working part-time during retirement, for financial reasons or for the social connection benefits, it is best to have a strategy in advance.

Samuel Financial LLC is located at 858 Washington Street, Dedham, MA 02026 and can be reached at 781.461.6886.  Securities and advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment adviser. Fixed Insurance products and services offered through CES Insurance Agency.

July, 2018