Do you have retirement goals? The new year is a great time to set new retirement goals and reevaluate any you already have. Retirement is expensive, but it’s never too early or late to start planning. Understanding your retirement options can help you create a plan so you can live the retirement of your dreams.

Planning for Your Retirement Goals

There are many ways to set and achieve your retirement goals. From social security to an aggressive investment portfolio, and everything in between, you can choose what’s best for you. The options that are right for you depend on what you want in retirement, how long you have until retirement, and how much you can afford to save towards your goals.

Planning Options to Meet Your Retirement Goals

To meet your retirement goals, you need to know your options for planning. There are countless ways to plan for your retirement. These are some of the most common options. Each involves a different way to save, different tax implications, and have different impacts on your finances now and in retirement.

Social Security

Throughout your working life, one thing is certain. Every time you get a paycheck, you pay taxes. One of the taxes that is paid through your paycheck is the Federal Insurance Contributions Act, better known as FICA. Typically, you and your employer each pay a portion of this tax. Working, and paying FICA, for 10 years can qualify you for social security.

To receive social security income (SSI) in retirement, you have to meet additional requirements beyond the number of years you contributed through FICA. Age is an important factor not just for when you can draw social security, but how much money you get. For full retirement benefits, you must retire between 66 and 67, depending on the year you were born. Early retirement can be taken starting at 62, but your monthly benefit is reduced by a percentage for each year you’ve retired early. Delaying your retirement until 70 can also increase your monthly SSI benefit.

PERS

When you work for a public entity, such as a city, municipality, or school, you don’t pay FICA taxes. Instead, you and your employer pay PERS, also known as Public Employee Retirement System. PERS is a state-run retirement program for public or government employees. PERS eligibility and retirement income amount are based on the number of years you worked in the public sector and your age when you retire.

IRA

Another popular option for retirement income is an individual retirement arrangement (IRA). Depending on your retirement goals and the amount you are able to save, an IRA can be a tax-wise way to build your retirement. There are two primary types of IRA accounts, Roth and traditional. Each has it’s own tax advantages and contribution limits.

• Contributions to a traditional IRA are tax deductible. When you file your taxes each year, you can deduct the amount you contributed to your IRA in that year. The contributions earn interest each year. Once you retire, you pay taxes on withdrawals since your contributions were tax deductions.
• Contributions to a Roth IRA cannot be deducted from your taxes. However, when you take withdrawals in retirement, you do not pay taxes since you already did.

Whether you have a traditional IRA or a Roth IRA, there are limits to how much money you can contribute in a given year. These amounts are set by the federal government each year and are higher once you turn 50.

Employer Sponsored Retirement Account

If you work for an employer outside of the public sector, such as for a nonprofit or private company, they may offer you a retirement plan similar to PERS. This type of retirement account is most often a 401(k). However, some employers may offer a comparable alternative, like a 403(b). Often, you contribute to these accounts directly from your paycheck. Many employers even offer a match, contributing a set amount of money to your retirement account based on how much you contribute.

General Investment Accounts

The retirement planning options discussed above are great ways to plan for retirement. But, depending on your retirement goals, you may want to consider additional ways you can save. Beyond general retirement-specific accounts, money in general investment accounts can help fund your retirement goals. You can choose how aggressive you would like your investments strategy to be, influencing the amount of money your investments could earn. Unlike retirement accounts, regular investment accounts can easily be used at any time before or after you retire. Unlike some retirement account options, there are no contribution limits for general investment accounts.

Assets

Having money in retirement accounts that can be withdrawn is in important part of planning for your retirement goals. However, there are other things to consider to get the full picture of your financial situation in retirement. As you’re planning for your retirement goals, don’t forget to consider any other assets, such as your home. If necessary, you can leverage your home as collateral, sell it for cash, rent it for extra income, or use it to qualify for a senior living community.

Estate Planning Retirement Goals

While it’s important to plan for your retirement goals, it’s also important to plan for how your assets should be protected. When planning your retirement, think about planning your estate, too. Estate planning lets you decide what happens to your assets, including your retirement, if something happens to you. Your estate plan may be a will that outlines who will receive your retirement assets if something happens to you. Depending on the assets you have, and how you want to protect them, you may also consider a trust as part of your estate plan.

Considerations for Setting Your Retirement Goals

Think about how you want to spend your retirement. Aside from how much you can afford to save for your retirement, this is one of the most important factors in setting your retirement goals. These are some of the things you should consider when setting your goals.

Maintaining Your Lifestyle

Your retirement goals may be to live your life exactly like you are today. Just minus working. If this is the case, it can be easy to get an idea of what your retirement income should be. You can review your current expenses and make some predictions about your future expenses to estimate what your retirement income needs to be. There are some formulas that can help you determine how much money you need to save for the annual income you think you may need. When you plan your retirement goals, always consult a professional.

Traveling and Having Fun

For many, retirement is a chance to fulfill a travel bucket list. Of course, this doesn’t come without expense. If traveling in retirement is your dream, consider the costs. Think about where you want to travel, international or domestic, how you want to travel, and how often you want to travel. After, you can estimate what a trip might cost. If you know every year you want to take an international trip, a cruise, and a couple domestic trips, you can estimate what your annual travel may cost. That amount would be in addition to your regular, ongoing expenses and can help you know what your dream retirement may cost.

Senior Living

You may want to live retirement with no maintenance, less stress, and peace of mind about the future. That’s exactly what senior living can provide, plus an engaged social life and plenty of fun. Senior living communities can be expensive and should be part of your retirement goals. Some communities may also have financial requirements. Even if you don’t think senior living will be for you, it doesn’t hurt to make it part of your plans. Then, if you eventually decide you want or need senior living you’ll be financially prepared for it.

Achieving Your Retirement Goals at The Ohio Masonic Communities

At The Ohio Masonic Communities, we want you to live the retirement of your dreams. We’re here to help you reach your retirement goals and live life on your terms. Hear directly from a financial planning expert and author to learn more about how you can meet your retirement goals and live your best life.

 

At The Ohio Masonic Communities, we want you to live your best life in retirement and achieve your retirement goals. If you want to learn more about senior living or the resources we have available, we’d love to hear from you.  Give us a call at 1 (877) 881-1623 or contact us here. We have three senior living communities across the state of Ohio – Browning Masonic Community in Waterville, Ohio, Springfield Masonic Community in Springfield, Ohio, and Western Reserve Masonic Community in Medina, Ohio.