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Where do you see yourself when you picture your dream retirement? Lounging on the beach? Playing golf with new neighbors in a gated community? Taking a quick walk from your condo to watch your grandkids play soccer? Moving abroad for an authentic international experience? Enjoying the hustle and bustle of big city living? Let’s examine some of the pros and cons of relocating in retirement, including potential effects on your financial planning.
It's clear from our latest batch of listener questions that the Keen on Retirement audience has been paying attention to how recent legislation is affecting retirement planning. But today's episode should also clarify just how challenging it can be for folks to find the answers they need when so many details keep changing. My team at Keen Wealth doesn't just dig into the fine print: we understand how to apply these rules to individual financial scenarios and create appropriate outcomes for folks in retirement.
"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.
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?
One reason we advise our clients not to overreact to election results is that the plans candidates propose on the campaign trail often look very different once they've worked through the U.S. lawmaking process. President Biden's agenda has struggled with that very reality in recent weeks. As Congress continues to debate and negotiate the Build Back Better Plan, perhaps the central topic of discussion has been balancing ambitious spending with changes to tax codes that would be necessary to pay for that spending.
President Biden and Congress continue to float some pretty significant tax proposals, including last week’s package focused on corporate tax rates. On today’s show, we dig into items aimed at individuals, particularly some potential changes that could affect retirees this time next year.