Nobody has a crystal ball to tell us exactly what the future holds, but don’t let uncertainty be the reason you’re unprepared for retirement. As someone who has worked hard for what they’ve earned and is likely invested in America’s future, you may be concerned about what the future could bring. But, it’s important to remember that no matter what’s happening in Washington, you have the opportunity to be in control of your personal financial wellbeing. Here are 4 ways you can help prepare yourself and your retirement for the unexpected.
Decide on a Social Security Maximization Strategy
Social Security became a hot button issue during this election, and for a good reason. Millions of Americans rely on it for lifetime retirement income. For decades, the program has paid out more than it takes inand this trend is expected to continue as more Baby Boomers retire. While the media often likes to give doomsday messages about the Social Security program, it’s very unlikely it will ever disappear. Most importantly, don’t rush to claim benefits because you worry they won’t be there in the future. Decide on a Social Security maximization strategy that’s based on facts and on your individual situation.
Plan for Potentially Higher Taxes in the Future
A growing national debt could mean higher taxes in the future. These are trends to keep an eye on when planning for retirement. It’s important to think about your potential tax burden for the long-term, not just on a year to year basis. For example, Required Minimum Distributions (RMDs) could increase your tax burden later in retirement. RMDs force you to withdraw from your tax-deferred retirement accounts by a specific amount every year starting at age 72. This amount may be more than you would normally withdraw per year and may lead to a high taxable income. One strategy to avoid this potential tax trap is a Roth IRA conversion, where you pay tax on the amount converted and can withdraw it tax-free after 5 years. Roth IRAs are also not subject to RMDs and can be used in addition to a traditional IRA or 401(k) to help minimize taxes.
Assemble a Team
More than any of these individual things, we believe the most important thing is having a comprehensive retirement plan and a dedicated team behind you. America has made an important decision about its future interest, but what about your interests? That’s what we’re interested in, no matter what happens in Washington in the future. Schedule a complimentary financial review to discuss your biggest retirement concerns and goals.  https://www.aarp.org/retirement/social-security/info-2020/10-myths-explained
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