Podcasts Business Retirement Starts Today Do's and Don'ts for Your 7-Figure Retirement [Rebroadcast]

Do's and Don'ts for Your 7-Figure Retirement [Rebroadcast]

Published: Nov. 21, 2022, 2:03 p.m.

Do you wish that there was a list of what to do and what not to do in your retirement? I recently discovered an article from MorningStar.com written by Sheryl Rowling titled\xa08 Financial Do's and Don'ts for the 7-Figure Retirement, and I thought it would be perfect to share with my listeners. You'll learn several tips that you should consider when planning your retirement.

After we analyze the article\u2019s do\u2019s and don\u2019ts, we\u2019ll\xa0turn to\xa0Debbie\u2019s question about taking Social Security early in order to protect beneficiaries.\xa0

Outline of This Episode
  • [1:42] 8 Financial Do's and Don'ts for the 7-Figure Retirement
  • [4:11] Boredom is a 4 letter word in retirement
  • [6:25] Don\u2019t take Social Security too late
  • [10:19] Don\u2019t write checks to charity
  • [12:07] Consult a financial professional
  • [13:45] Should Debbie take Social Security early?
8 Financial tips for a successful retirement

Don\u2019t retire too early.\xa0Retiring too early can be detrimental to both your psyche and your savings. If you have to retire early or sooner than expected, make sure that you retire to something rather than away from something. Creating a purpose in retirement can ensure that you don\u2019t get bored. Boredom is a four-letter word in retirement.\xa0

For every year that you retire early, you have one less year of savings and one more year of spending. Do the math to learn what that could mean for your portfolio.

Do watch your taxable income level.\xa0This may sound odd, but it often makes sense to pay more taxes now in order to pay significantly less later. Retirement is one time in your life when you have control over the taxes you pay. Implementing careful tax planning strategies can save you over the course of your retirement.

Don\u2019t take Social Security too early or too late.\xa0When to take Social Security is a complex question, and the answers vary depending on the individual. It\u2019s usually best to wait until full retirement age to start taking benefits and it\u2019s often even better to delay until age 70 especially if you\u2019re married. Listen in to hear what I usually recommend to my clients.

Do consider Roth conversions.\xa0If you have the opportunity to convert your IRA to a Roth you should even\xa0though\xa0you must pay tax on the amount converted. Remember that since these are after-tax dollars, the income they provide is never taxed.

Do consider retirement stages and safe withdrawal rates when determining your budget.\xa0Spending more in the early years of retirement makes sense as long as you consider several factors. You\u2019ll need to ensure that you have a safety net in place and that you have a plan to reduce your spending over time or whenever the market becomes uncooperative.

Don\u2019t lock yourself into financial commitments or expensive payments.\xa0Long-term expenses like leasing a luxury car can lock you into financial commitments that you can\u2019t free yourself from. Becoming the Bank of Mom and Dad can not only ruin your kids\u2019 chances of financial independence, but it can also ruin your relationship and your own financial security in retirement.\xa0

Don\u2019t write checks to charity.\xa0Instead of writing checks to charity, consider contributing appreciated stocks. This way of charitable giving can save you more in taxes. One way to utilize this strategy is by creating a donor-advised fund (DAF) which could be likened to a charitable IRA.

Do consult a financial professional. Obviously, I agree with this tip. Consider consulting a CPA as well as a financial advisor so that you can ensure that you are considering every angle in your retirement plan.

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