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Alpha Wealth Management & Planning, LLC

Helpful Halloween Tips for those Close to Retirement

The markets have been pretty 'spooky' lately. It leaves us wondering whether we'll end the day with a trick or a treat.

Now is a great time of year to look back, and forward, to set goals and track your progress. Here are some tips that may help investors bring in all sorts of financial treats this Halloween. 

1. Reassess Your Risk Tolerance

We’ve all been through a major trauma in 2020 and 2022, and that included watching our retirement savings swoon. That’ll never happen again, right? 

We’ve always faced uncertainty and that’s not going to change. It’s almost inevitable that a recent retiree will have to withstand multiple financial crises during their retirement, which is why it’s so important to prepare for them.

2. Practice Retirement Spending Now

A common guideline you’ll hear is that retirees should be prepared to replace 80% of their income in retirement. Rules of thumb can be useful, but this one is fairly random. It’s better to develop a plan around real spending needs.

3. Understand Your Retirement Income Options

You can start collecting Social Security benefits at age 62. But should you? You can start taking 401(k) distributions penalty-free at age 59 ½. Is that too early? Many people are better served putting off both for as long as possible. But by age 72, most savers have to start making required minimum distributions (RMDs). How will these strategies impact your taxes? Have a tax plan!!!

4. Prepare a Health Insurance Strategy

Americans are eligible to enroll in Medicare at age 65—there can even be penalties for failing to enroll on time. Make a plan to sign up in the months leading up to your 65th birthday, giving the coverage time to kick in. Contribute to an HSA plan if you are eligible. 

5. Deal with Your Debt

The best time to pay off debt is while you’re still working. If you plan to retire within the next 12 months—or even if retirement is a more remote possibility—prioritize eliminating those credit card balances, student and car loans. Review your mortgage(s).

Have a fun and safe Halloween!!!