Tranel Talks Column

4 Reasons Why You Should Have a Good Retirement Plan

A recent Prudential survey found out that only one-third of women were ahead or on track for their retirement plan. This is sad because retirement is one of the most important chapters in a person’s life. If you don’t plan for retirement early, your retirement days will be filled with anxiety and uncertainty.

You don’t want to live with the fear of running out of money in your old age when you don’t have the energy to earn an income. This is why you should engage retirement planners to help you come up with a solid retirement plan that will see you through once you retire from the workforce.

These are the benefits of having a good retirement plan.

1. Gives You More Peace of Mind

The American Psychiatric Association says that over 70% of adults constantly worry about money. Retirees are most affected by financial stress, which takes a toll on their health and peace of mind. It’s a real nightmare to run out of money in your retirement years or have your expenses exceed your income. Having money problems in retirement can trigger illnesses such as migraine headaches, sleep apnea, heart disease, and diabetes. Without a solid retirement plan, you’ll live in a constant state of worry and burden your family instead of enjoying your retirement time.

2. A Good Retirement Plan Will Factor in Taxes

Taxes can wipe out a significant portion of your retirement income if you don’t plan wisely. However, you need to understand how different retirement accounts are structured, so you pay the least amount of taxes. To do this effectively, you’ll need to enlist the services of a retirement planner who knows how retirement savings accounts are taxed. Your financial consultant will help you choose the best retirement plan upon assessing your current income and retirement needs.

Basically, you’ll have three tax options for your retirement savings plan. The first option is tax-deferred, and it includes social security, pension plans, pre-tax IRA’s, and 401 (k)s. You may also have a tax-free plan that includes Health Savings Accounts (HSAs), Municipal bonds, and Roth IRAs. The third option is tax-managed, and it includes index funds and standard brokerage accounts.

These options can be confusing, more so if you don’t have sufficient financial knowledge. Good thing you can enlist financial planning services in Chicago or a city near you to help you select the best retirement plan that will give you more tax benefits.

3. Helps You Make Better Career and Financial Choices

Most of the decisions you’ll make in your working life will affect your retirement plan adversely. If you don’t have a good retirement plan in place, you may not see how your current decisions will affect your retirement years. For instance, before you leave your job to pursue self-employment, you should consider how your retirement plan will be affected.

4. A Solid Retirement Plan Accounts for the Unknown

Life is unpredictable, and things may not always go as planned. However, your retirement plan will brace you for the unexpected twists and turns of life. For instance, you may be forced to retire early or have to quit your job earlier than planned to take care of an ailing loved one or your spouse. Also, you may live longer than you expected after your retirement. When you seek retirement planning services, your financial consultant will account for these uncertain scenarios so you’ll have a good financial backup regardless of the situation. This way, you’ll enjoy your retirement life better knowing that you’re well covered.

The earlier your start planning for retirement, the more advantages you’ll have in your retirement life. When you have a good retirement plan earlier on in life, you’ll enjoy your retirement life more without financial stress and uncertainties. Fortunately, our retirement planning services in and around Chicago can help you develop a plan that meets your needs best. Contact The Tranel Financial Group in Libertyville to learn more.