Vail Valley: Retirement can be even better, with proper planning
August 16, 2010
Many Americans are currently enjoying a comfortable retirement. However, resting on one’s laurels once the retirement finish line is crossed just isn’t smart. The realities of today’s ever-changing economy require vigilance.
Tax law changes, new product developments, interest-rate fluctuations and erratic financial markets, not to mention changes in personal or family health and circumstances, are all reasons why retirees cannot afford to have a hands-off approach toward their retirement funds. Retirees must be prepared to make adjustments to maximize their retirement futures. In addition, retirees must generate income while preserving their assets.
Some retirees face the daunting task of analyzing multiple retirement plan statements from a host of employers and/or institutions. Rather than seeing the big picture surrounding their retirement plan, they receive glimpses of small parts of their plan. Determining when to make adjustments, how to generate income while preserving assets and monitoring one’s progress can be overwhelming.
Consolidating multiple retirement plans under one roof can help one simplify one’s life and gain control over qualified plan assets. For example, consolidating IRA and 401(k) assets with one institution may save both time and money. Investors may want to consider a rollover or transfer if:
• They are unhappy with the fees, performance or service provided by their financial organization.
• They want to diversify their portfolio without incurring additional maintenance fees for having multiple IRAs. Doing so may help create the income they need while preserving and extending the life of the assets they already have.
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• They want to simplify and consolidate IRAs to reduce expenses and make them easier to monitor.
• They no longer wish to have continued contact with a former employer.
• Their 401(k) consists of company stock and they are unsure of the company’s future stability.
• The charges or fees to transfer an existing account are not significant.
When consolidating into one IRA, one stays invested with potential growth, can continue to make contributions if eligible, and benefit from tax deferrals. Consolidating retirement assets also makes sense to simplify a financial program for the benefit of a spouse or children in the event of the retiree’s death. By getting it together, a retired couple is more apt to take control of their assets.
Through sound planning and frequent monitoring, retirees can be assured that their money is working hard for them, positioning them for a comfortable retirement. A comfortable retirement is within grasp, but careful planning is necessary – even after retirement. A financial professional can help analyze one’s financial needs and help make retirement even better than planned.
Patricia French is a Certified Financial Planner with Thrivent Financial for Lutherans serving Eagle and Summit counties. She can be reached at 970-926-0251. Thrivent Financial for Lutherans is a Fortune 500 financial services membership organization helping nearly 3 million members achieve their financial goals and give back to their communities. This column was prepared by Thrivent Financial for use by this representative.