retirement planning

The Importance of Retirement Planning

August 10, 2021

If you’ve been giving extra thought to early retirement planning lately and considered socking away extra cash for your eventual retirement, you may have wondered why making Retirement Plans decades in advance is so crucial. Although putting together a detailed plan for your retirement now may seem like overkill, the truth is that retirement planning is necessary in order to reach the finish line when you want to and ensure that you have enough liquidity to cover your monthly expenses. Still not convinced? Take a look at just a few of the reasons behind why retirement planning can be so critical.

It Can Help You Brace and Prepare for the Unexpected

One of the primary reasons retirement planning is absolutely essential is that it can go a long way in helping you prepare for unexpected events on your career-long journey to retirement. Although you may be counting on a stable income to get you all the way to your retirement years, for example, it’s always possible that you could suffer unexpected loss of income, sudden relocations and similar events. Additionally, without enough planning, you could find yourself pushed into early retirement without adequate savings. Early planning helps mitigate these sudden events.

It Can Reduce Stress by Giving You Time To Answer Key Questions

If you’re typically a planner, you already know that having a plan in place helps reduce stress levels greatly. When it comes to retirement, knowing how much money you’ll need to retire and figuring out other key questions early can help you relax and relieve you of common worries. Be sure to work through important questions such as the following in your planning process.

  • Do you have a diverse enough investment portfolio?
  • Would a lump-sum pension be appropriate for your situation?
  • Do you and your family members have life insurance?
  • How much investment earnings should you expect during retirement?
  • Will you be able to save an adequate amount of money by retirement time to cover regular monthly expenses?

You Can Plan Retirement Savings To Benefit Your Taxes

If you’re savvy with your retirement planning, you may be able to take advantage of tax breaks as well. Perhaps surprisingly, planning your retirement could make important contributions to your current budget as well. Ask your financial planner and tax advisor about:

  • Tax-free accounts, such as Health Savings, or HSA, accounts, or Roth IRA accounts
  • Tax-deferred accounts, including social security, 401(k) savings plans and pensions
  • Tax-managed accounts, such as many typical brokerage accounts

If you’ve never given a second thought to your Retirement Plans before, now may be the ideal time to start. Having plans in place for your future retirement as early as possible is the key to eliminating uncertainty, reducing stress, figuring out essential questions and even getting to take advantage of certain built-in tax benefits. Now that you understand the true importance of retirement planning, you can start strategizing for your own retirement right away.

About 1891 Financial Life

At 1891 Financial Life, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. 

Our portfolio is extensive, ranging from various life insurance policies to our MYGA to support your financial needs no matter what stage of life you’re in. For more information, contact us at (855) 804-7424.