Three Things To Take Into Account When Planning Your Own Retirement

Hiring a financial advisor may not be the best fit for everyone. However, when you’re planning your retirement on your own, there are several things you should take into consideration to ensure that you’re not missing out on key savings to see you through your golden years.

Tax Planning

While you may feel like you have the investment side well handled, you may be neglecting the tax planning that comes along with planning for your retirement. Tax rules often change and it can be difficult to understand tax code, let alone keep up with the constant changes. Taxes also make up a big expense during retirement, and there’s an opportunity in planning to save money here that many people going the DIY route often miss out on due to a lack of knowledge. If you don’t have an in depth understanding of tax law yourself, and you don’t have the time to learn, this may be an area where you want to skip the DIY and get the help of an accountant or tax professional.

Social Security

Understanding the ins and outs of Social Security is a complicated task for anyone, especially someone that is planning to DIY their retirement. Social Security has complex rules and understanding when and how to take your own Social Security, and then balance the rest of your retirement based upon that choice, is a complex decision when you’re doing this on your own. This becomes even more complex if you’re married and one spouse were to pass away, because then you’re dealing with surviving spousal benefits and the complexities that surround that scenario.

Your Time

Another thing worth noting when you’re planning your own retirement is how much time you invest in the planning process. Planning your own retirement can turn into a full time job if you let it, between picking and following your investments, to learning and understanding upcoming tax laws and strategies. You’ll need to weigh the benefits of hiring professionals to handle some of those tasks for you, just as you do for other things in your life where you delegate to professionals – such as hiring someone else to fix something in your home or your vehicle. While you may be perfectly capable and even enjoy fixing your car, it may be better to hire someone else to do it as we get older so that you can spend your precious time doing what you really enjoy – but that’s up to you to prioritize.