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4 Steps to a Smoother Retirement

By: Scott Thoma, CFA, CFP®, Principal November 13, 2019

Retirement: You plan, dream and talk about it for decades – and now it’s finally within sight. Or perhaps a loved one is ready to retire. Now that this vision is about to become a reality, here are four steps to consider. 

Step 1: Calculate how much income you’ll need. 

Start with what type of lifestyle you plan to have, and what it will take to support this lifestyle. Your financial advisor can help you estimate your expenses. Keep in mind that while some expenses, such as those related to your work, may be lower, others, such as travel and health care, may be higher. 

You’ll also want to take into account other financial obligations, such as caring for parents or supporting children. Do you want to help your children or grandchildren with their education? How about leaving an inheritance or making donations to charity? All these expenses should be taken into account to help determine how much you might need to retire. 

Step 2: Calculate how much income you’ll earn. 

Visit to get an estimate of your Social Security benefits. When you file for Social Security is an important decision, and your financial advisor can help you run different scenarios to help you determine when it might make sense to take your benefits. And don’t forget about any pensions or government benefits you may be entitled to. 

Importantly, any gap between these outside income sources and how much you’ll need to support your lifestyle will need to come from your investment portfolio. So you’ll want to be smart with your withdrawals. 

Step 3: Start smart with your withdrawal rate. 

How much you withdraw from your portfolio each year is key to ensuring your money lasts as long as you need it in retirement. In addition, market performance, the length of time you spend in retirement and the inflation rate can all influence how much you can withdraw in retirement. 

Your financial advisor can help you determine a withdrawal rate that makes sense for your situation, and then continue to review it over time to ensure it still is appropriate based on your needs. 

Step 4: Don’t forget about Medicare. 

Medicare has a seven-month enrollment period starting three months before the month you turn 65. If you miss the deadline, there could be coverage delays and penalties. If you’re retiring before you reach age 65, you may have a gap in health care coverage if it isn’t provided by a former employer. 

If this is the case, you may need to purchase health insurance to ensure you’re covered until you’re eligible for Medicare. If you’re still working at age 65, you may not need to sign up for Medicare, but it’s important to talk to your employer. 

We can help 

If you’re uncertain about any aspects related to your retirement, talk to your financial advisor. Understand that you will be reviewing your strategy and making adjustments over time. Things change, and we will partner with you to ensure your plan is as flexible as it needs to be over time. And don’t forget to have fun – you’ve worked hard to get to this point in your life, so you should enjoy it to the fullest.

Important Information:

This information is for educational and illustrative purposes only and should not be interpreted as specific investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation.

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