Achieving a comfortable, financially independent retirement is the ultimate goal of financial planning and requires explicit attention. Preparation of retirement income and expense forecasts is one of SCM’s key components.
Retirement planning involves establishing a comprehensive method of gathering enough funds to ensure an enjoyable retirement. SCM shows where and how to accumulate funds for retirement and how much will be necessary.
- Retirement Preparation– While still working, you should determine a retirement life-style in terms of standard of living, medical expenses and insurance for your state of health and whether to leave an inheritance. Expenses can estimated by determining a retirement budget and forecasting effects of inflation. Timing considerations should be evaluated in early savings plans, taking early retirement and planning money management during retirement. This calculator determines the amount of savings for retirement.
- Social Security– Social Security alone will not provide adequate funds for retirement but the benefits are not inconsequential. SCM helps you understand the system, describe benefit payments, helps filing for claims and evaluates tax considerations. Issues which need to be addressed are early versus late retirement, effects of extra earnings on benefits and other SS benefits such as Medicare and disability benefits.
- Pension Plans- Retirement plans can contribute from nothing to a considerable portion of retirement income. Most plans are either defined benefit or defined contribution plans with defined rights, benefits, and eligibility standards and use predetermined formulas to calculate employee benefits. SCM helps you understand the types of benefits, their distribution in regards to vesting and taking a lump sum versus monthly payments as well as plan loans and tax treatment of benefits.
- Individual Retirement Accounts– IRAs are a convenient and low cost way for people with earned income to set money aside for retirement annually. There are eligibility requirements to consider such as deductability, after-tax Roths and nondeductible IRAs. SCM helps managing the IRAs in areas such as portfolio management, shifting funds between accounts, withdrawing funds and designating beneficiaries. This calculator returns the end value of a Roth IRA.
- Self-employed Retirement Plans- SEP plans provide the self-employed client an opportunity to establish private pension funds. SCM helps you set them up, determine contribution and deduction limits, integration with IRAs, withdrawal programs and portfolio management of its holdings.Other Vehicles for Retirement– Other retirement options include 403b plans, 457 plans, 401k plans and annuities. Other non-plan options include deferred compensation, housing equity, single-premium life insurance and employee-stock ownership plans.
