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Retirement is an ultimate reality that happens to all working professionals at the age of 66. Retirement planning encompasses determining income goals and decisions to achieve these goals before retirement. The process involves sizing up expenses, identifying income sources, and creating a saving plan, and managing assets. Since retirement planning is a lifelong process, individuals can start the process at any point in life but work effectively when factored into a financial plan from the beginning. In retirement planning, individuals estimate future cash flow to determine whether the retirement income goal can be achieved. An Effective retirement plan allows individuals to retain their financial stability and independence after their work lives. Every person’s retirement plan is unique because it varies depending on how they want to spend their life after retirement.
Employer-sponsored retirement plans are offered to employees at relatively low cost or no cost. These plans include 401(k), 403(b), pension, and simple plans. The 401(k) retirement plan is the most common employer-sponsored plan. Employees are responsible for contributing to this plan. The 401(k) also allows employees to select which investments their money goes to and control the account during retirement. The 403(b) plan is designated for non-profit organizations such as churches, public schools, and hospitals. Employees fund the 403(b) plans, and contributions are subject to tax deductions. In a simple retirement plan, employees make tax-deductible contributions while the employers match them up to 3 percent of their salary. The pension plan applies to individuals who have served in pensionable offices before retiring. It guarantees the retiree a certain amount of money every month for the rest of their life.
Arrowroot Family Office understands that creating a comprehensive retirement plan is a challenge for many people. As a result, Arrowroot Family Office focuses on helping individuals fulfill the years of their lives and achieve financial independence in their retirement. Arrowroot Family Office uses different retirement plans to help individuals depending on their situation. IRAs, 457(b)s 401(k)s, and 403(k)s are some of the investment plans that individuals can use to build their retirement savings. The financial advisors at Arrowroot Family Office have different strategies to help individuals maximize retirement savings and ensure they live a comfortable life after retirement. Below are the ways financial advisors at Arrowroot Family Office help clients in creating a retirement plan.
Tax planning: With a personal savings account like the 401(k) or the IRA; it can be difficult to determine which one is highly affected by taxes. The financial advisors at Arrowroot Family Office help clients decide when to withdraw from various accounts, which may not be useful based on their personal circumstances. The advisors evaluate the client’s situation and make tax predictions to offer an idea of what to expect. Then a retirement withdrawal strategy that gives the client the most benefits in retirement is prepared.
Investment management: Liquidation of assets and properties is often viewed as a great source of income through retirement. Arrowroot Family Office provides investment management services to help clients build a diversified portfolio. It is important to consult financial advisors in managing investments to ensure the withdrawal rate leaves enough income to use during retirement. Financial advisors help clients to withdraw a sufficient amount of income at the right time and avoid liquidating assets when they do not need income.
Social security: 89 percent of US workers are covered by social security. Since this number is very high, there are higher chances that many people do not fully benefit from social security due to poor planning. Financial advisors at Arrowroot Family Office help clients in optimizing the retirement plan to ensure they benefit from social security. The social security fund may not be sufficient for some individuals after retirement. Therefore, Arrowroot Family Office analyses every client’s situation based on the age, years they have worked, and their personal goals.