First Post of 2017- Take a tip From Race Drivers: Use Pit Stops to Protect Your Retirement
Good morning everyone. This is my first post of 2017. Thank you for your support and reading of this blog. Please know that I wish you all nothing but the best in 2017. Professionally I have many good and exciting things to come in 2017. Stay posted.
There is a surprisingly useful lesson to be learned from the world of auto racing, according to an article appearing in U.S. New, “5 Pit Stops for Better Retirement Planning.” At any point in your life, take a pit stop: take the time to check the health and well being of your portfolio, see if you need to make any changes, and then, get back into the race.
An easy way to remember when to take a pit stop? Use key birthdays as critical checkpoints. They’re good reminders to take stock of where you are and how you want to shape your future. Take a look at these important birthdays from a financial planning viewpoint:
Pit Stop #1- On your 21st birthday, or as soon after that as you start to earn money, also start saving long-term. I did not get my first "real" job until I graduated law school at teh age of 25. You can invest in a 401(k) plan at work to get company matching contributions or if you do not have a 401(k) at work, start contributing to your IRA.
Pit Stop #2- On your 30th birthday, check on your savings. You have only 10 years until age 40, and the money you save before 40 is almost equal to what you’ll save for the rest of your life after that point, as far as compounding returns.
Pit Stop #3- On your 45th birthday, you're going to be in the "sandwich" position. You may have parents who are around age 70 and you may have college-age kids or high school kids. This is an ideal pit stop for your trust and estate planning, so that you and your children are ready for the issues associated with this sometimes difficult time.
Pit Stop #4- By age 62, you should be concentrating on your needs—from 50 to 62, your earnings must help you prepare for retirement. At age 62, you are also now eligible for Social Security, but the longer you can wait before drawing on your Social Security payout, the better. You’ll realize a sizeable jump in income, if you wait until 70.
Pit Stop #5- Made it to 70? Great–that’s your magic birthday!!! You can now withdraw from Social Security at the highest rate and place that money into other safe investments. Remember, that at age 70½, you are required to withdraw from your 401(k).
In addition to the birthday pit stops, significant events in your life, including divorce, death of a spouse or heaven forbid a child, the birth of a child or grandchildren, are also good dates to take a retirement pit stop. By making sure that you’re your plan is on track and your performance is strong, you’ll be ready to hit the retirement road at a healthy speed when that date finally comes.
Do you live Plant to Retire and live in Miami-Dade, Broward, or Palm Beach counties in Florida? Laws are constantly changing-- has your estate plan been reviewed in the last 2-3 years? Call me (954-888-1747) right away for peace of mind. I can help!
- My practice is exclusively estate planning and probate,
- I have prepared numerous estate plans in 16 years of practice,
- I have administered estates and trusts through Probate all over Florida,
- I am a Certified Financial Planner Professional™, and
- I am here for YOU today and there for your FAMILY tomorrow.
Reference: U.S. News (December 5, 2016) “5 Pit Stops for Better Retirement Planning”