2016 Year in Review + Retirement Tips - 92

Joe Anderson, CFP® and Alan Clopine, CPA summarize the highs and lows of 2016 in YMYW podcast episode 92, then talk about how to automate and increase your retirement savings, how to create a retirement lifestyle game plan, and steps to take if you plan on moving in retirement.  Original publish date December 31, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.

01:30 “This year, if you take away any lesson from this [past] year in 2016 when it comes to your investments…is that it’s very difficult for you to time the market.”

04:52 “That’s what investors need to do – they need to look at the long-term and not worry about the day-to-day, month-to-month, quarter-to-quarter because if you have the right investment allocation for you, then let that work.”

11:23 “Evaluate your Social Security claiming strategies because we know that you can start collecting as early as 62 but there are downsides there – your full retirement age, for most of you, is 66 unless you’re born after 1953 and you can take it as late as age 70. Start thinking about Social Security before you even get there because that’s potentially going to be a big chunk of income for you.”

15:20 “Evaluate your savings. If you have $500,000 in savings, you probably should plan not to take any more than about 4% per year. This is a rule of thumb – it’s called the 4% rule… and doesn’t work in all cases…in fact, if you retire younger than 66, you probably don’t want to take 4% because you’re probably going to run out of money sooner.”

22:35 “Pay yourself first – by that, you’re saving first before you’re spending, and the best way to do that is if you have a 401(k) or 403(b) at your work because it comes right out of your paycheck and you never miss it. Not all of you have 401(k)s, so in that case you’ll have to open your own savings account.”

26:06 “Understand tax ramifications. This one is missed a lot because you may not even realize this but all the money that you’ve saved into your 401(k) or your 403(b) or in many cases your IRAs – [when] that money comes out it’s taxed at ordinary income rates which is the same rates you’re used to paying right now.”

33:03 “Get serious about relocation plans. If you plan to move when you retire, find out how much you’ll actually net for your house and how much it will cost to move to your new location.”

34:30 “In some cases it may make sense to refinance your loan – do that while you’re working because you need the income to qualify.”