How to Plan for Retirement

Will you be ready?

Retiring comfortably may not seem attainable for everyone, but with planning and preparation, enjoying the retirement you deserve is possible.

Where to start

When making important choices for your retirement, you should take a few factors into consideration:

• Age and health
• Dependents or other financial considerations
• Possible income sources

All are critical, but understanding your sources of retirement income and when you'll need them is essential. To help, be sure to use Banzai's Retirement Calculator.

Pension Plans vs 401(k) Plans

If your organization provides a traditional pension, you generally have two income choices: an annuity or a lump sum distribution. Annuities provide monthly income for life and the lump sum is a one-time distribution. Both amounts are decided by your employer, who uses a number of factors including age, salary at the time of retirement and years of service to the organization.

Defined Contribution Plans, like 401(k) plans, are more common and are dependent on how much you’ve contributed over time and how those investments have performed. You do have more options than with a traditional pension, such as leaving the money in the plan, rolling over to an IRA or taking out a lump sum payment.

With either income source, you will need to determine when you will need to begin utilizing those funds and whether you can put them to work. If you don’t need to tap into reserves on day one of retirement, it may be best to transfer to an IRA or similar vehicle.

Timing is everything

When planning your retirement, it's important to keep a few key ages in mind.

Age 55 - This is the common early retirement age and it's often possible to start withdrawing from workplace retirement plans.

Age 59 1/2 - You can start withdrawing money from IRAs and other tax-deferred savings plans without paying a 10% penalty.

Age 65 - The traditional retirement age and when full benefits are available for most pensions. Medicare also begins.

Age 66/67 - Social Security benefits start.

Retire in stages

For many people, a gradual retirement plan is an attractive option. This could look like reducing the number of days in your workweek or hours in your workday. Doing so, you'll be able to make your money stretch further and longer. There may be challenges to keep in mind, so be sure to talk with your employer well in advance if you want to pursue this option.

Prepare a written financial plan

Planning for retirement can at first seem daunting, which is why it's important to have a professional working in your best interest. Atlantic Union Bank's Wealth Management team will work with you to determine your goals and design a roadmap to help you achieve them. To learn more, please visit atlanticunionbank.com/wealth.