The COVID pandemic created a prolonged period of economic uncertainty that has left an indelible mark on individuals and businesses across the globe. While it is natural to become anxious and question whether you are fully prepared for the current period and any challenges that may arise in the future, you should focus your attention on the parts of your financial plan that you can control. Following are five critical steps to consider as your planned retirement date draws closer, whether today, next year or a decade from now.
Set a budget. No matter how large your nest egg, it is critical you have a full understanding of all your sources of income (i.e., retirement plans, mutual funds), your recurring fixed expenses (i.e., mortgage, utilities, insurance premiums) and the required (and rising) costs of health insurance, medical bills and long-term care you can expect to pay as you get older.
Pay down debt. The more money you owe, the more difficult it will be to ride out market downturns and maintain a sustainable cash flow in retirement. Start by paying down debt with the highest interest rates, such as credit card debt and personal loans. Depending on your unique circumstances, you may also be able to negotiate a more favorable payment plan for outstanding medical bills and potentially refinance your mortgage when rates are low.
Time Social Security benefits. Generally, the longer you delay claiming Social Security benefits, the higher your monthly payout will be. If you wait to claim Social Security at age 70, your benefits will increase by 8 percent annually. Therefore, if you start taking Social Security at age 62, the amount you receive will reduce the amount you are entitled to when you reach the full retirement age of 67. Your financial advisor can run the numbers to help you determine the best age to start claiming benefits based on your age, marital status, and whether you are still working and earning wages.
Keep an eye on tax efficiency. Taxes on income and capital gains can put a significant dent in your cash flow during your retirement years. By working with a fiduciary financial advisor and a CPA, you can implement sound strategies that maximize tax efficiency and help you increase the amount of money you and your named beneficiaries take home after taxes.
Plan for your longer-term health care needs. It is unfortunate that the older we get, the more likely our health and physical well-being will deteriorate, and we will require some assistance to manage everyday activities. With the rising costs of healthcare and assisted living, it makes sense to consider a long-term care insurance policy to help ensure you receive the care you want in your golden years.
About the Author: Brendan T. Hayes is a financial planner with Provenance Wealth Advisors (PWA), an Independent Registered Investment advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs and a registered representative with PWA Securities, LLC (PWAS). He can be reached in the firm’s West Palm Beach, Fla., office at (561) 361-2001 or info@provwealth.com.
Provenance Wealth Advisors, 200 E. Las Olas Blvd., Nineteenth Floor, Ft. Lauderdale, FL 33301Â (954) 712-8888.
Brendan T. Hayes is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC.
 This material is being provided for information purposes only and is not a complete description or a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the preceding material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
 Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult your financial advisor about your individual situation.
 Long-term care insurance policies have exclusions and/or limitations. The cost and availability of long-term care insurance depend on factors such as age, health and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with purchasing long-term care insurance. Guarantees are based on the claims-paying ability of the insurance company.
To learn more about Provenance Wealth Advisors financial planning services click here or contact us at info@provwealth.com
Posted on March 7, 2024