New Year Financial strategies to reach financial goals with frequently asked questions

Planning for retirement is one of the most important financial steps you can take. While the details vary for every individual, the fundamentals remain the same. A well-crafted retirement plan provides clarity and confidence as you move into the next stage of life. Why Retirement Planning Matters Retirement is not just about leaving work behind. It’s about creating the financial freedom to live the life you want, on your terms. Without a retirement plan, you risk outliving your savings, paying more taxes than necessary, or feeling uncertain about your future. A strong retirement strategy gives you control. It helps you understand where you are today, where you want to be, and the steps needed to get there. Step One: Know Your Retirement Goals The foundation of any retirement planning process begins with your goals. Ask yourself: When do I want to retire? Where do I want to live? What kind of lifestyle do I want to maintain? Some people picture a quiet life close to home. Others see retirement as a time for travel and new experiences. Your answers will determine how much income you need each year and how long your retirement savings must last. Step Two: Understand Your Retirement Expenses Expenses don’t disappear in retirement. In fact, we see many people spend more during their retirement years. Separating your expenses into fixed and discretionary categories is the first step. Fixed expenses include housing, food, insurance, and healthcare. Discretionary expenses include vacations, entertainment, shopping, etc Understanding your retirement budget early helps you plan with greater confidence. Step Three: Take Stock of Your Retirement Income Sources Retirement income typically comes from several places. Social Security, employer pensions, personal savings, and investment accounts. The key is to understand how these sources work together. Social Security benefits depend on your work history and when you choose to start claiming. Pensions, if available, may provide predictable income. Savings and investments—including 401(k)s, IRAs, and taxable accounts—fill the gap between what guaranteed sources provide and what you actually need. Step Four: Build a Retirement Savings Strategy Your retirement savings strategy should balance growth with preservation. As you get closer to retirement, the focus often shifts from aggressive growth to protecting what you’ve built. A diversified portfolio can provide growth while managing risk. The right allocation depends on your timeline, comfort level with market volatility, and income needs. If you’re still in your 50s or early 60s, maximizing contributions to your 401(k) or IRA can boost your retirement savings. Catch-up contributions can be especially valuable in the years leading up to retirement. Step Five: Plan for Taxes in Retirement Taxes are often overlooked in retirement planning, yet they play a significant role in your plan. Withdrawals from traditional IRAs and 401(k)s are generally taxed as ordinary income. Roth accounts, on the other hand, can provide tax-free income if conditions are met. Strategic planning around when and how to take distributions can reduce your tax burden over time. A tax-efficient withdrawal strategy can help extend the life of your retirement savings. Step Six: Prepare for Healthcare Costs in Retirement Healthcare can be one of the largest expenses in retirement. Medicare provides a foundation, but it doesn’t cover everything. You may need supplemental insurance to help with deductibles, copayments, and prescription costs. Long-term care is another factor to consider. Many retirees underestimate the cost of extended care, whether at home or in a facility. Exploring long-term care insurance or other strategies can protect your assets and provide peace of mind. Step Seven: Protect Your Estate Estate planning ensures that your assets are distributed according to your wishes and that your loved ones are cared for. At a minimum, review your will, power of attorney, and healthcare directives. If your estate is larger or more complex, trusts and other strategies may help streamline the transfer of wealth. Estate planning is not just about money—it’s about making decisions now that protect your family later. Step Eight: Revisit and Adjust Your Retirement Plan Retirement planning is not a one-time event. Life changes, markets fluctuate, and tax laws evolve. Regularly reviewing and updating your retirement plan ensures it stays aligned with your goals. Many people find value in working with a financial advisor during these reviews. An advisor can provide perspective, identify blind spots, and recommend adjustments based on your current situation. The Value of Working With a Financial Advisor While the basics of retirement planning are straightforward, the details can quickly become complex. Social Security timing, tax-efficient withdrawal strategies, and investment allocation are just a few areas where professional guidance can make a difference. Working with a retirement advisor gives you a partner who can help you navigate uncertainty and create a financial plan designed for your life. Final Thoughts The basics of retirement planning begin with knowing your goals, understanding your expenses, and building a strategy for savings, income, taxes, and healthcare. Estate planning and regular reviews keep your plan strong as circumstances change. Retirement is not just about reaching a financial finish line. It’s about creating a future that reflects your values and gives you confidence. FAQs (Frequently Asked Questions)  This is overwhelming, where do I start? · The best place to start is to determine your current income and how much you typically spend annually. What is your net monthly income? Do you typically spend all of your net income or save a portion? If you save a portion, how much and then how much do you have left to spend? This is an easy way to back into your annual expenses. How much do you charge for a retirement plan? · We charge either a flat fee for a retirement plan or an annual fee based on assets under management, which includes retirement planning. How do you know if I am on track for retirement? · We use our financial planning modeling software and use Monte Carlo Analysis and withdrawal rate analysis to determine if someone has a successful plan. And no, Monte Carlo Analysis doesn’t mean taking your investments to Vegas. Are you taking new clients and what is the first step to explore working with you? · Yes, we are taking new clients! Feel free to email Amy at amy.kelly@prudential.com and she will schedule a complimentary discovery meeting with you.