"Sean" is 60, and he wants to retire by the end of this year. His wife, "Mary," is also 60, and she wants to retire in two-to-three years. Maybe. Sean has an IRA worth $1,000,000 and a health savings account with $5,000 in it. Mary has a 401(k) worth $800,000, an IRA worth $700,000, and company stock worth $100,000. They also have cash savings of about $600,000. They want to be able to spend $120,000 per year in retirement.
When you hit your 60s, you're going to pass some milestones on your financial plan that might make you feel a little ... Well ... old. Once you're past age 59 1/2, you can start taking withdrawals from your retirement accounts without a penalty.
When our leaders in Washington passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act in 2019, it marked a major change in retirement planning. In a sense, the government was codifying advice that many financial advisors -- including my team at Keen Wealth -- had been giving for years. The next generation of retirees is going to live longer, with more active lives than any before it. Very few younger workers are going to stay at the same company for decades and earn generous pensions. Very few older workers will automatically retire at 65. And for most folks, Social Security alone will not fund a safe, secure, and rewarding retirement.
We often caution folks against treating their retirement accounts like a windfall. But how should you manage an ACTUAL windfall, such as a large inheritance, a bonus or buyout from your employer, profit from selling a business, or winning the lottery?
We're only a few days into 2023, but the stats tell us that plenty of folks are already struggling with their New Year's resolutions. In 2019, Strava, a social network for athletes, determined that 80% of people who made New Year's resolutions abandoned them by the second week of January. A 2021 CBS News poll found that 4% of individuals who make resolutions actually accomplish everything; 8% meet most of their goals; 16% meet some.
In 2022, we regularly addressed two connected topics that caused some worry for retirement-age seniors this year: the up-and-down economy, and how its fluctuations were affecting retirement planning. Not surprisingly, our Top 5 Podcasts and Blogs all touched on one or both of those topics.