Turn your retirement puzzle into a plan

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I recently received a 1,000 piece jigsaw puzzle as a gift that features a lovely Colorado mountain trail disappearing into the blue sky horizon. The puzzle itself instantly brought back childhood memories with my dad. Because he had a lifelong passion for puzzles, I grew up in a house where scattered puzzle pieces covered the dining room table like a cardboard construction area. While my dad always loved the process of putting the pieces together, for a long time I was one to simply admire the picture on the box. The rest always seemed a little too rough to me.

What I feel about the puzzles is how many people are thinking about planning for retirement. Their ideal picture of retirement would look great on a puzzle box, but the process of putting it together seems overwhelming. Of course, one can continue to visualize, but eventually it is necessary to empty all the pieces and make them fit together.

If you are considering taking this important step, you have nothing to fear. Here are six key things to put at the top of your retirement planning pile that can help you enjoy the kind of financial future you envision.

Piece #1: Put your plan in writing

Perhaps the most important piece is your plan. After all, when you put your plan in writing, you have a tangible record of how far you have to go. According to a recent survey, 73% of finance professionals say providing written plans is very important to building trust with their clients, and two out of three consumers find these written plans effective in accommodating their risk preferences, their investment plan and how to fund financial goals.

From monitoring financial benchmarks to managing market declines, a written plan is a record of commitment that will help you stay on track and stay anchored through the ups and downs.

Exhibit 2: Knowing your biological age

The good news is that you may be younger than you think. The bad news is that you may be younger than you think. A growing body of evidence suggests that an individual’s true age can be measured more accurately using telomeres, which are protective caps on both ends of your chromosomes. Your biological age may be 10 to 20 years different from your chronological age, which may affect your retirement planning.

Commercial tests to determine one’s biological age measure telomeres using a blood sample that is compared to samples from other members of the same age group. However, there are also many calculators and questionnaires available online that can provide estimates of biological age based on several factors, including diet and lifestyle.

Longer life expectancies are one of the main factors that have helped transform traditional retirement planning. With today’s longer lifespan, you may need to plan for more years. And more puzzles.

Part 3: Protect your assets

If the thought of running out of money is keeping you up at night, finding reliable sources of retirement income that meet your needs and risk tolerance can help. Many retirees lose sleep due to daily expenses and health care. In a recent study, 87% of respondents said that their biggest retirement fear was a lack of income.

Social Security, a pension, or certain types of annuities can contribute to the guaranteed income component of a well-balanced portfolio. A reliable income can also help you understand how much you can afford to spend and help you feel more comfortable with spending in general. And it can protect you from negative consequences, such as market downturns.

Exhibit #4: Prepare for Health Issues

In a survey of more than 1,000 people between the ages of 50 and 70 with investable assets of at least $200,000, only half of retirees and 36% of pre-retirees said they had a strategy for how to manage healthcare and long-term care expenses in retirement. There are good reasons to have such a plan, as the financial burden of these costs can be significant. Of note, in the same survey, 28% of participants said the COVID-19 pandemic has caused them to re-evaluate how they plan for long-term care.

For those without a healthcare strategy, a good place to start might be to tackle the potential cost of long-term care in the future with insurance coverage. And if health insurance wasn’t already confusing enough, income withdrawals from your assets can affect your health insurance premiums, so work closely with a finance professional and tax expert to manage your distributions. Of course, good health care starts with good self-care, so stay focused on what’s in your control – maintain a healthy diet, exercise more, and limit stress.

Piece #5: Put your income on autopilot

Many of us consider the money we have accumulated to be “untouchable”, when in fact it was designed to be spent in retirement. And while the desire to avoid overspending is admirable in the discipline it shows, it does mean you could miss out on all the fulfillment you deserve in life after leaving the workforce. To help avoid this, one option for spending more comfortably in retirement is automation.

Automation is an effective method of saving and investing to accumulate assets. For example, you can automatically contribute to your 401(k) or other retirement funds. But what about using the power of automation in retirement for distribution? Consider converting some of your assets into a regular income stream and automatically activating a withdrawal plan that can help fuel your retirement, perhaps without worrying about running dry.

Piece n°6: Follow your path with a professional

As important because your plan is the financial professional that will help you execute it and lock all those pieces together. We all have an enigmatic vision of what our retirement might be like, but we can’t just admire that picture without first making an effort. This planning process is what brings the image to life, down to the last missing piece that may have fallen on the floor. It’s time to open the box and sort the pile – assembly is required.

Jackson, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any tax statements contained herein were not designed or written for use and may not be relied upon for the purpose of avoiding US federal, state or local tax penalties. Tax laws are complicated and subject to change. Tax results may depend on the set of facts and circumstances specific to each taxpayer. You should rely on your own independent advisors for any tax, accounting or legal statements made herein. Jackson is the trading name of Jackson Financial, Inc., Jackson National Life Insurance Company (Home Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York (Home Office: Purchase, New York). Jackson National Life Distributors LLC.

Jackson’s National Life

Phil Wright is vice president of marketing communications at Jackson National Life Distributors LLC (JNLD) and an award-winning financial writer. He started with the company in 1994 and focuses on developing and creating marketing business content. He is a Registered Director and Certified Funds Specialist (CFS®).

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