PEORIA MAGAZINE December 2022

C O M M E N T A R Y

EVERYONE NEEDS A RETIREMENT INCOME ROADMAP

BY DARYL DAGIT

W hatdoesretirementmean to you? Do you dream of traveling, taking on a new hobby, spending time with the grandchildren or starting a business? No matter your goals, you will need a plan to support the retirement lifestyle you envision while reducing the risk that you will outlive your savings. WHEN DO YOU WISH TO RETIRE? Establishing a target age is im portant because when you retire will significantly affect howmuch you need to save, as it determines how long your money needs to last.

Important considerations: • The longer youdelay retirement, the longer youcanbuildup tax-deferred funds in your IRAs and employer sponsored plans like 401(k)s. • Accrue benefits in a traditional pension plan if you have one. • Medicare generally doesn't start until you're 65. How will you cover the cost of health insurance? Will you be covered under your employ er’s plan? If so, what is your cost? • Reduced Social Security retirement benefits for early election. You can begin your benefits at age 62, but you stand to take a 25% to 30% reduction in benefits. You can in crease your benefits every year you wait up to age 70.

• Can you work part-time during retirement? You will have less of a need to use your savings, allowing them to grow. Plus, you may be eligible for health insurance with the employer. HOW LONG WILL RETIREMENT LAST? None of us knowhow longwemay live, but look at your family tree to estimate your longevity. Statistically, women generally live longer than men. The last thing you want to do is run out of money before running out of time. See life expectancies in the accompanying table below from Michael Kitces.

94 DECEMBER 2022 PEORIA MAGAZINE