Retirement Planning
We know preparing for retirement can be stress-inducing, even daunting. We do our best to show you the realities of your current retirement picture and what you can do to improve it.
Normal/Traditional Retirement
With a normal or traditional retirement, you drop off your keys, go to your retirement party, and download your boarding pass to what is hopefully the first of many nice vacations.
Potential Advantages:
The system of retirement accounts, pensions, social security, and other accounts are designed for this type of retirement.
Designed to never go back to work.
You probably have more in your investment accounts as typically the highest earning years come later in one’s career.
Semi-Retirement
With Semi-Retirement, you work part-time and retire part-time. This can have some great benefits, especially if you are getting burned out, but have a high-value skill set that it not time-intensive when done right. The idea is to work enough (hopefully in a less stressful way) to afford your lifestyle and save if needed but realize you might have to “work” until an older age.
Potential Advantages:
If you work past RMD age, you can qualify for the “still working” exemption and avoid having to take an RMD. There are special rules around this.
Keep your mind active.
Avoid burnout by working on your schedule and in your style.
Continue to save and invest in HSA, 401(k), and other tax advantaged accounts.
Making the Most of your Group Retirement Plan
“Mini” Retirements
Remember when professors took sabbaticals? Well, they still do and the idea of having your own sabbaticals throughout your life and career is something we are seeing more and more of. It’s basically where you take anywhere between a few months to a few years off from work. As you can probably figure out, cash flow, passive income, and built-up savings & investments become paramount here. The same fundamentals still apply as you will one day stop working completely, but in this method of retirement, we focus more on financial independence and cash flow than ending asset values. However, the Monte Carlo Simulation is still something we aim to keep high as well.
Potential Advantages:
Keep earning, but take breaks when you need a new challenge or time between challenges.
Have more than one career in your life.
Have the ability to live well before retirement age.
Higher chance of avoiding burnout.
At Horizon Financial Planning, we specialize in providing expert investment guidance to craft a retirement plan that’s as unique as your aspirations. Our approach is both rigorous and innovative, focusing on long-term wealth growth and preservation. We analyze market trends and economic cycles to optimize your asset allocation, ensuring your portfolio is well-positioned to maximize returns and minimize risk.
Being mindful of fees is essential in investment planning, particularly regarding expense ratios which can impact your returns. We evaluate various factors such as the cost-effectiveness of active vs. passive management and the overall impact of fees on your investment strategy. This ensures that your retirement plan is efficient and aligned with your financial goals.
We also focus on optimizing your salary deferral to enhance your retirement savings and capitalize on tax benefits. By staying abreast of IRS limits, ensuring you receive the full employer match, and making regular adjustments in line with the latest tax laws, we help you secure a financially comfortable retirement.
Predicting Your Retirement Success
Horizon Financial Planning employs a Monte Carlo simulation in our Retirement Probability Analysis to evaluate the success of your financial plan, aiming for an 85% success rate as the benchmark for stability. This means in 850 out of 1,000 scenarios, you won’t run out of money during retirement. We consider scores below 85% as risky, while scores near 100% may indicate over-saving. Our analysis is flexible, allowing adjustments to retirement age, spending, savings, and Social Security timing to optimize your plan.
Our Retirement Confidence Analysis presents 1,000 possible retirement outcomes, providing a percentile-based projection of your assets. The middle 90% range offers a realistic expectation of asset values, while the core 50% and median value simplify the understanding of your potential financial standing in retirement.
At Horizon Financial Planning, our analytical tools are designed to give you a clear and confident view of your retirement finances. We balance risk and reward to ensure your retirement strategy is robust yet realistic, providing peace of mind as you plan for the future.
There is definately more than one way to retire. Which one sounds best to you?
Your Retirement Path
Our Retirement Savings Analysis tool offers a comprehensive look at your savings journey towards retirement. It presents four key visualizations: Current Year Savings to track this year’s savings, Savings Over Time to monitor the growth of your savings across the years, Savings Rate to display the portion of your income saved each year, and Total Savings and Returns to provide a holistic view of your savings combined with investment returns. These graphs are designed to help you understand and optimize your savings strategy for a secure retirement.
The Retirement Plan Analysis complements this by providing three additional graphs that delve into the specifics of retirement spending, income sources, and withdrawal rates. The Retirement Spending graph categorizes your projected retirement expenses, while the Income Sources graph compares various income streams against different return scenarios. Lastly, the Withdrawal Rate graph illustrates the annual percentage of your investments you’ll need to withdraw to fund your retirement, factoring in mandatory distributions.
In essence, these analyses serve as a dual toolkit to ensure you’re well-prepared for retirement. By offering a detailed breakdown of both your savings progress and retirement plan, you can make informed decisions to adjust your strategies and ensure your retirement funds will meet your future needs. These tools aim to provide clarity and confidence in your financial planning for retirement.