Six Steps for Reaching a Comfortable Retirement

  1. Have a plan for getting to retirement
    • Pick an Age: What age will you and your spouse retire
    • Pay off all debts and remain debt free by living within your means
    • Decide what your retirement will look like?  What will you do with all the extra time? 
  2. If you plan to retire before you qualify for Medicare, age 65, have a plan for how you will handle Health Insurance, potential options:
    • Current or past Employer Sponsored plan
    • Coverage through your spouses employer
    • Private Health Insurance plans
    • Cobra
    • Affordable Care Act plans
    • Faith Based Healthcare Ministries
    • Part time employment Health Insurance
  3. Determine your income sources and annual income associated with each
    • Pensions
    • 401k’s or IRA’s
      • At age 59 ½
      • 401k with retirement from current employer at age 55 or later
      • IRA distributions based on IRS rule 72t
    • Annuities
    • Social security
    • Real Estate income
      1. Mortgage/Note income
      1. Rental Income
      1. REIT Income
      1. Others
    • Cash and non-retirement investment accounts
    • Others
  4. Based on your income sources, determine the sequence for spending down your retirement funds to match your monthly expenses
  5. Estimate what you will spend on a monthly basis in retirement. Consider your current expenses and your planned activities and adjustments for retirement.
    • Daily Living Expenses
    • Housing
    • Transportation
    • Car and Home Insurance
    • Property taxes
    • Health Care
    • Travel and Vacation
  6. Develop a detailed spending plan that determines what income you will draw on a monthly basis to cover your projected monthly expenses
    • Determine your assumed rate of inflation and rate of investment returns
    • Determine the sequence of income buckets you will draw from by year
    • Forecast the account balance of each income source by year based on beginning balance, rate of inflation, investment returns and spending to determine each account net balance.
    • Revisit your spending plan each year and adjust as necessary based on actual inflation, rates of returns, actual expenses and account balances. 

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