There's more you need to know
Tuesday, March 31, 2015
7812 Edinger Avenue
Huntington Beach, CA 92647
For an invite, please contact:
Craig Fein, LPL Financial Consultant
CA Insurance License #0E56240
Yours, Mine, and Ours
A Couple's Guide to Retirement Planning
While the reasons for earning two incomes may vary from couple to couple, these families often face a similar financial challenge: participation in separate retirement programs.
As a couple, your combined retirement assets are not just limited to what you may have accumulated in your current employers' retirement plans. You also need to consider any older accounts that are still sitting in former employers' plans, or assets that have been moved to rollover IRAs. After inventorying your various retirement assets, consider some areas where a joint planning effort may help enhance your investment outcome.
Setting a Mutual Goal
Pursuing the goal of retiring together requires a long-term approach. Start by determining how large a combined nest egg you will need. This will depend on how much you have already saved and when you hope to retire, as well as your retirement lifestyle choices -- where you plan to live, whether you plan to maintain more than one residence, and what you plan to do with your time. All of these factors will affect your retirement income needs.
Keep in mind that Americans are living longer and that one or both of you could spend 20 or more years in retirement. Also carefully review the potential financial benefits of delaying retirement. Working for an extra few years could enable you to continue making contributions to your IRA or employer-sponsored retirement plan and delay taking withdrawals.
Asset allocation -- As with any investment portfolio, your retirement accounts should work in unison to pursue a single accumulation goal. Ask yourselves whether your overall asset allocation is appropriate for your combined objectives and risk tolerance. Are the portfolios adequately diversified? Are they overweighted in any one asset class or individual security? Also, consider how your retirement portfolios complement your other assets, such as taxable investment accounts and real estate.
For couples in or near retirement, an equally important part of the planning process is determining when and how to withdraw money from retirement accounts. Consider which accounts (i.e., taxable vs. tax-deferred) to tap first. It may be better to liquidate assets in taxable accounts, allowing assets in IRAs and qualified retirement plans to continue growing tax-deferred. Remember, however, that with few exceptions, the IRS requires individuals to begin withdrawing money from tax-deferred accounts no later than age 70 1/2, at which point you may want to rethink your distribution strategy. For instance, might it make sense to convert a traditional IRA to a Roth IRA to avoid taking distributions altogether? Your tax advisor can help you consider the tax consequences of conversion, as well as the potential benefits of a Roth IRA.
These are just a few of the issues dual-earner couples need to consider when managing their individual retirement plan accounts. Since no two couples' financial situations are alike, the best course of action may be to speak with your financial advisor about devising a coordinated plan for meeting your future financial needs.
Dwight Lee and Craig Fein are LPL Financial Consultants located at NuVision Federal Credit Union. If you have any questions or would like to make an appointment, please call Dwight Lee at 714.375.8227 or Craig Fein at 714.375.8222.
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Representatives are not tax advisors or legal experts. For information regarding specific tax situations, please contact a tax professional. For legal advice, consult an attorney. Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through Kinecta Financial & Insurance Services, a subsidiary of Kinecta Federal Credit Union. CA Insurance License #0E24631. Insurance and investment products: 1) are not NCUSIF insured; 2) are not obligations of or guaranteed by the credit union or any affiliated entities; 3) involve investment risk, including possible loss of value. Kinecta Financial & Insurance Services and Kinecta Federal Credit Union are not affiliated with LPL Financial. Some insurance products available to California residents only.
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NuVision Federal Credit Union
7812 Edinger Avenue
Huntington Beach, CA 92647