by Justin Krane

6 Ingredients That That You Should Consider When Baking Your Retirement Cake

1. Expenses in Retirement – How much will it cost you to live in today’s dollars, in retirement?

a. Break down your expenses in 3 categories : needs, wants, and wishes

2. Roth IRAs – Great way to reduce the amount of taxes you will pay in retirement.

3. Social Security – If you think it will be around when you need it, try to take your benefit at normal retirement age, rather than at the earlier age (for example 62).  You can even discuss with your financial planner what would happen if you delayed taking it until age 70, where the benefit would be greater.

4. Cash Value Life Insurance – Don’t forget that this could be money you could use to live on, or at least fall back on.

5. Sequence Of Returns – If you’re far away from retirement, the sequence of your portfolio returns are not as important.  They play a much bigger role if you’re within 5 years of retirement.

6. Withdrawal Rate – Plan on withdrawing no more than 4.00% from your portfolio per year in retirement.  This is the industry standard, of which models are based on, which basically says there is a lower probability that you will run out of money.

Justin Krane, a Certified Financial Planner, founded Krane Financial Solutions in January 2008. He holds a Bachelor of Arts degree in Finance from University of Colorado, Boulder, graduating in 1994. Prior to founding Krane Financial Solutions, Justin was a Vice President, Investments, and Sales Manager at UBS Financial Services Inc. for 12 years, in Beverly Hills, California. For more information, visit www.kranefinancialsolutions.com.

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