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What Goes into a Retirement Plan?

Posted by Michael Kane on Apr 29, 2016 1:57:02 PM
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retirement-planWould you begin a flight without first having a plan? Your retirement is a lot like a flight- you know the mechanics it takes to fly the plane, but without a set plan, you may find yourself along a different path than you anticipated.

To make sure you can accomplish all of your retirement goals, it’s important to create a written plan.  You may want to include:

All Sources of Income

You need to take into account how much income you will have, what sources will proved the income and if they might change for any reason, inflation, survivor benefits, etc. Your income sources may include some or all of the following:

  • Lump sum from your 401(k) or other defined benefit/contribution plan
  • Social Security benefits
  • An airline or PBGC pension
  • Spouse’s Social Security benefits
  • Spouse’s pension
  • Military pension
  • Annuities
  • Stock dividends
  • Other sources, such as a rental property or an inheritance


Determine all of the expenses you will have during your retirement. The expenses you should include are:

Debt – While it is most beneficial to have your debt paid off before retirement, if you are unable to, be sure to include your debt repayment schedule along with any interest. This can include mortgages, auto loans, student loans, credit cards, etc.

Living Expenses – This will include your rent, utilities, car payments, insurance, groceries and any other expenses that will occur on a regular basis.

Health Insurance – Prior to your Medicare eligibility you’ll need to maintain health care coverage either through your airline or a privately funded plan. 

Taxes  Take into account any income or property tax payments that need to be made over the course of your retirement.

Emergency Expenses – Set money aside for any major emergencies that can occur such as large medical or home expenses.  A good rule of thumb is to have 3 to 6 months of living expenses put aside.

Travel – Although you may have the benefit of free airfare during your retirement, there are other expenses you should consider if you’re planning to travel frequently, such as gas, meals, lodging, and attractions you plan to visit.

Long-Term Care – Address the inevitable issue of aging in your plan.  If you become unable to care for yourself, who will be your primary caregiver or where would you like to live?  Will you have enough saved to take care of your financial needs or will it fall to your loved ones? Planning ahead for this potential expense is a way to ensure you can afford the care you need if and when the time comes.

An Estate Plan

It is important to include your estate plan in your retirement planning.  An estate plan will make sure your assets are passed down according to your wishes.  You also gain the satisfaction of knowing that your financial affairs are in order, so you won't hand down a costly administrative nightmare to your loved ones.

Have a Plan

Retirement planning is a key piece of a comprehensive investment and financial plan.  Having a plan in place can help you avoid running out of money during retirement.

For help creating and evaluating your financial plan throughout your career, schedule a complimentary 15 minute consultation with Retirement Advisors of America.

Request a Consultation




Disclaimer: This blog is intended for informational purposes only and should not be construed as individual investment advice. Actual recommendations are provided by Retirement Advisors of America following consultation and are custom-tailored to each investor’s unique needs and circumstances. The information contained herein is from sources believed to be accurate and reliable. However, Retirement Advisors of America accepts no legal responsibility for any errors or omissions. Investments in stocks, bonds, and mutual funds may increase or decrease in value. Past performance is no guarantee of future results. Any of the charts and graphs included in this blog are not recommendations for the purchase and sale of any security. 

Topics: Financial Planning