What should I do to plan for retirement?

With the stock market poised to break new records this year, it is reasonable to say that the money lost in many portfolios in the last recession have been recovered. With that, it is prudent to rethink how retirement income will be realized from investment accounts. After all, financial planning is an important aspect of estate planning, so the following tips can help in managing your estate.

Delay taking Social Security retirement benefits – Depending on your income, chances are that you will be eligible for $20,000 of annual benefits when you hit age 65. However, if you delay retirement until age 70, you will likely realize an additional $8,300 each year. This could be beneficial for those who believe that they will reach the average life expectancy for 65 year olds, and will help in managing ongoing costs.

Cover fixed costs with fixed income – When you add up your essential costs (i.e. mortgage, rent, utilities, groceries) try to make sure that they are covered by fixed retirement benefits. If you can do this, chances are that you will be in good shape. If not, an immediate fixed annuity may provide you with the appropriate income to meet your obligations.

Build a cash cushion – Retirement is about rewarding oneself for decades of hard work, so building a cash cushion should also be a goal so that you can do the things you dreamed of as you spent your days building a legacy. Taking four percent of your overall portfolio during your first year of retirement may enable you to do this, with gradual increases to compensate for inflation.

The preceding is not legal advice or tax advice. For individual questions, contact an estate planning attorney.