Lloyd Harbor Financial Planner

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In life, nothing is permanent in this world. Everything that comes will definitely go. That is why it is best to put our best foot forward and save more for the future. The best thing you can start with is a properly thought out retirement plan.

Lloyd Harbor Financial Planner

Some wait to long before they decide to plan for their future. This is not a good idea because we can never tell what lies ahead. So, here’s how and when to start retirement planning:

1. The retirement year

First, decide on what year you would like to retire. It is always best to start something with a goal in hand. This will keep you focused and determined to push it through.

2. Do your homework

The best way to start creating your retirement plan is to consult your employer-sponsored 401(k) or IRA, or any of your retirement schemes and investigate mutual funds to determine what programs may coincide with your target date of retirement. A qualified Lloyd Harbor Financial Planner can steer you in the right direction, and will have the most up-to-date information.

3. Backup Plan

There are many instances where your plan can backfire. So, it is best to have backups. So, when making a retirement plan, you’d better include a backup that will serve as a fallback in case your nest eggs fails or if something else goes wrong. It is best that you do not depend entirely on your funds because sometimes there are circumstances that are beyond our control. Your financial planner can suggest good alternatives.

3. Opt for annuities

When doing retirement planning, you should take note also of the different retirement planning strategies that will surely make your plan work. One good example of a retirement planning strategy is to invest in annuities.

Basically, annuities are adaptable indemnity bonds that are exclusively patterned to pay interest, while at the same time assisting you in accomplishing your long-term saving goals.

These annuities are the long-term items recommended by most insurance companies, though, there are brokers and other financial establishments that provide this kind of service. Your Lloyd Harbor Financial Planner can help you set specific goals with a plan to achieve them.

There are two types of annuities: the immediate and the tax-deferred annuity.

In the immediate annuity, you start your retirement planning by giving a hefty amount of money to the insurance company or financial institution. Your payment scheme will begin immediately after funding the annuity. This type of annuity is usually best for those who are already at least 60 years of age.

On the other hand, the tax-deferred annuities you may choose whether you will pay the retirement amount instantly or make a monthly disbursement until the time you reach your target date.

This is usually appropriate to those who start their retirement planning early, generally those who are 20 years old at the least.

4. Consider Modified Endowment Contracts

Annuities had been heading the limelight for so many years now. Most people would go for annuities, as this is the most popular retirement planning strategy. However, like most plans, it is still vulnerable to problems and crisis. That is why it is best to make an alternative option when doing your retirement planning.

The next best retirement planning strategy is the Modified Endowment Contract or the MEC. This is, basically, one kind of insurance policy.

In reality, MEC is similar to annuity, especially the tax-deferred annuity, in terms of the preliminary premium rates. Though, they differ in terms of tax codes.

With an annuity, the tax code appears to be very unfavorable especially when the benefactor dies while the annuity accumulation stage is in full force. This, in turn, makes the deferred wage taxes on development suddenly become payable.

In contrast, the MEC resolves this problem by providing the benefactor or the beneficiaries with an insurance rider included in the agreement. The insurance rider is made to hand over the full amount to your recipients absolutely free from any taxes.

Moreover, MECs can give you the flexibility of choosing between the variable and fixed account preferences. This, in turn, will make your retirement planning relatively easier.

Whatever retirement planning strategy you choose, the bottom line is that it is really important to save for your retirement as soon as possible. The help of a good Lloyd Harbor Financial Planner will save you a lot of headaches.

As they say, life is suspense; you will never know what it can offer you until the end. So, the best time to do retirement planning is now.