Are You Ready for Retirement? Understanding Your Income Options

As you approach retirement, the question of where your money will come from becomes increasingly significant. Transitioning from a consistent paycheck to managing diverse income sources in retirement requires thoughtful planning and strategic decision-making.

At Mendel Money Management, we understand the importance of navigating this new financial landscape with confidence. Let’s explore the various streams of retirement income and strive to ensure that your golden years are as fulfilling and worry-free as possible.

Social Security: A Steady Foundation

Social Security remains a cornerstone of retirement planning, providing a predictable income that adjusts with inflation. However, the timing of when you choose to start receiving benefits will significantly impact your monthly income—initiating benefits at 62 results in reduced payments compared to waiting until full retirement age or beyond. Delaying your benefits can substantially increase your monthly income, underscoring the importance of integrating Social Security into your broader retirement strategy.

401(k)s and IRAs: Key Pillars of Retirement Savings

For many, employer-sponsored plans like 401(k)s and individual retirement accounts (IRAs) are crucial to retirement income. With their distinct tax treatments and required minimum distributions (RMDs), these accounts necessitate careful planning. Traditional accounts offer tax-deferred growth, with taxes due upon withdrawal, while Roth accounts provide tax-free growth and withdrawals, presenting strategic opportunities for managing your retirement finances.

Investing in Stocks and Bonds

Maintaining a balanced portfolio of stocks and bonds is essential as you edge closer to retirement. Adjusting your investment strategy to match your risk tolerance can protect your savings, ensuring they support you throughout your retirement years. A well-considered allocation between stocks and bonds helps safeguard the longevity of your portfolio.

Broadening Your Income Sources

In addition to the primary sources of retirement income, several other options can supplement your financial foundation:

  • Health Savings Accounts (HSAs): Beyond 65, HSAs have become a flexible tool for covering healthcare costs, with penalty-free withdrawals for non-medical expenses taxed as ordinary income.
  • Pension Plans: Though less common, pensions provide a stable income from past employment, contributing to your financial security.
  • Part-Time Work or Consulting: Many retirees find value in staying active and engaged through part-time employment or consulting, adding both purpose and income.

Crafting a Retirement Tailored to Your Dreams

At Mendel Money Management, our mission is to help you craft a retirement that meets your financial needs and aligns with your aspirations and lifestyle. By offering a comprehensive review of your financial landscape, we aim to design a personalized retirement strategy that embraces all potential income sources and pursue a confident and rewarding retirement.

If you’re contemplating how to best manage your income sources in retirement or seeking to refine your existing strategy, we’re here to assist. Let’s meet today and explore how we can support you in achieving a retirement filled with joy, security, and fulfillment. Together, let’s turn your retirement dreams into reality.

 

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
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General Disclosure

This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. This presentation may not be construed as investment advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and are subject to change without notice.
 
Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site. As with any investment strategy, there is potential for profit as well as the possibility of loss.  We do not guarantee any minimum level of investment performance or the success of any portfolio or investment strategy. All investments involve risk (the amount of which may vary significantly) and investment recommendations will not always be profitable. Past performance is not a guarantee of future results.