Fly On Wall Street

Do You Have the Five Pillars of Retirement Planning in Place?

When building a retirement plan, consider implementing a five-pillar approach that includes taxes, investments, income, health care and estate planning.

1. Tax planning

Taxes, in my opinion, are the most significant expense for most retirees who have saved up a lot of money in tax-deferred investments (401(k)s and IRAs) over their working years. It is also the least talked about by financial planners. This is an area of focus our firm does not take lightly. Often, we can find ways to save our clients thousands of dollars by being tax-smart and understanding how the tax code can work for you.

What should you do to help ensure you’ve planned appropriately for taxes?

2. Investment planning

With this pillar, the main question we ask people in or near retirement is, “Are you taking on more risk than you need to?” The majority of the time, the answer is yes. Remember, you are now in a different phase of life and do not have the time to make up for a major market downturn.

What should you do to help ensure you’ve planned your investments adequately?

3. Income planning

You no longer have a paycheck coming when you’re in retirement — you must create your own.

What should you do to help ensure you’ve planned your income and its use wisely?

4. Health care planning

Health care is one of the bigger concerns in retirement, especially considering the increasing cost and increasing need as retirees live longer without necessarily being healthier.

What should you do to help ensure you’ve planned for your unpredictable health care needs and expenses?

5. Estate planning

Having an estate plan is something everyone says they need but not everyone has. I say this often to express the situation for most people we see. Sadly, only 34% of Americans have an estate plan in place, according to a 2023 Caring.com survey. That means 66% die without an estate plan.

What should you do to help ensure you’ve planned for the disposition of your estate when you’re gone?

Do you have all five pillars in place? If not, request a chat with our team at Peak Retirement Planning, Inc., to make sure you are set up for success.

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