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Retirement Income Planning

Retirement Income Planning

We can provide financial planning to help you maintain the lifestyle you desire during retirement.

The start of retirement doesn’t mean the need for financial planning has come to an end. U.S. Bank and U.S. Bancorp Investments, Inc. have experienced professionals that can help clients understand and plan for their retirement income needs.

Put Together a Comprehensive Retirement Income Plan

It isn’t unusual for individuals and couples to spend 20 to 30 years or more in retirement. The big question is whether the assets you have, combined with other sources of income, will be enough to meet your needs throughout your life.

If you are close to entering retirement or have already started, it makes sense to consider your financial needs in this phase of your life.

Understand the assets available to you

Know how much you have saved and where (workplace retirement plans, personal savings, etc.). Also know what other forms of income are available (Social Security or an employer pension).

Review your expenses

Go through your living costs and be realistic about whether the standard of living you expect can be maintained throughout your life.

Create a "cash flow" plan

Once you know your expenses, you can structure a strategy to help fund your living costs. There may be more than one investment strategy to consider. In today’s market, there are opportunities to diversify your portfolio that may help you get the most from your hard-earned retirement savings.

Determine a potentially tax-efficient approach

Taxes can be one of the major expenses you face in retirement. Distributions from workplace plans, traditional IRAs, annuities and Social Security may be subject to taxes. Planning ahead can help you design potentially tax-efficient options for retirement income.

Work to protect your future

Make sure you have a strategy in place to help deal with unforeseen events. You want to be certain that all health care needs are met (note – Medicare may not cover all of the potential expenses you may face). A typical concern for older Americans is to prepare for expenses related to long-term care needs.

Have a plan to address your final wishes

We can work with your legal and accounting professional to help your estate avoid unnecessary issues that may arise.

Revisit your strategy

No matter how well you plan, things can change in your life. You want to monitor your investments, assess how well your income needs are being met, make sure your strategies aimed at protecting your assets are adequate and assess whether your long-range retirement income plan is still on track.

If you are close to entering retirement or have already started, Retirement Income Planning is important. It is beneficial to have a plan that can help you make the most of your finances during retirement.

Making sure your assets last throughout your retirement may be your most important financial goal. Professional guidance may make a difference and give you peace-of-mind. Our knowledgeable financial professionals at U.S. Bank and U.S. Bancorp Investments, Inc. can help you develop a retirement income plan that is appropriate for your circumstances.

  • This is one of the most critical questions you face. Your first priority should be to determine a "sustainable" rate of withdrawal from your personal savings. Too many retirees make the mistake of drawing down their savings too quickly in the early years of retirement. That can result in a significant downgrade in living standards later in retirement or, in the worst case, actually running out of money while they are still alive. Keep in mind that given life expectancies for most retirees, you may want to prepare to stretch your savings over two-to-three decades or more.

  • Contributions to employer plans can only occur if you continue to be employed by the organization and qualify to participate in the plan. If you have separated from service with the employer, you can no longer make contributions to the plan.

    IRA contributions are only allowed to the extent that you have earned income. If you are earning wages while you are retired, you will qualify to make contributions to an IRA. If you have no earned income (investment income such as interest and dividends do not count as earned income), you do not qualify to make IRA contributions.

  • This depends on your circumstances. In many cases, there may be advantages to rolling money from your ex-employer’s plan to your own IRA. The IRA may give you more investment options and more control over your money. When you keep dollars in the employer plan, your investment options could be limited to what the plan offers and, once you no longer work with the employer, you tend to be less in touch with the plan.

    One aspect of your workplace plan that may warrant further examination is company stock. If your plan includes company stock, there may be advantages to using a provision known as "Net Unrealized Appreciation." This may allow you to liquidate stock with more favorable tax treatment. Your financial professional can help you review your options.

  • This is a decision that must be made on an individual basis. Some people seek to retire early and take Social Security as soon as possible. You can first claim retirement benefits at age 62. Some prefer to wait, and take advantage of the fact that the longer they delay first taking Social Security payments, the larger their monthly benefit will be. If you are in good health and anticipate living a long retirement, it may be advantageous to delay Social Security payments as long as possible so you can enjoy larger monthly benefit checks over time. In addition, there are other Social Security strategies that may be advantageous to your unique situation. Your financial professional can help you understand your options.

  • Not necessarily. In fact, people who earned modest incomes throughout their working lives and managed to save and accumulate a significant retirement nest egg may find that their income rises in retirement, pushing them into a higher income tax bracket. Taxes can be one of the most significant expenses you face in retirement. Among the tax concerns you need to be aware of in retirement are:

    • Some portion of your Social Security benefits may be subject to tax.
    • Most or all withdrawals from a workplace retirement plan will be taxed at ordinary income tax rates.
    • Withdrawals from a Traditional IRA that do not represent the portion attributable to your investment may be subject to tax at ordinary income tax rates. The same may be true of annuity payouts.
    • Earnings in taxable accounts will continue to be subject to current taxes.
    • You will not pay FICA (Social Security and Medicare) taxes on any investment income.

    The other concern is that tax laws are subject to change, and you can’t be certain what tax rates will apply in the future. Be sure to consult with your tax advisor for more information.

  • Distributions from workplace plans are required to begin by the year in which you turn age 70-1/2. With IRAs, the rules vary depending on the type of IRA you have. In a traditional IRA (earnings grow tax deferred but are taxed upon withdrawal), distributions are required to begin in the year you reach age 70-1/2, although the first required minimum distribution can be delayed until the April following the year that the person reaches the age of 70-1/2. Minimum distributions are required every year thereafter based on a distribution formula established by the Internal Revenue Service. If you have dollars in a Roth IRA, they can continue to be held indefinitely with no required withdrawals.

  • Every American becomes eligible to participate in the Medicare program on their 65th birthday. Medicare provides a certain degree of protection, but does not cover all medical costs in retirement. Most people purchase some form of Medicare Supplement insurance (or Medigap policies), for an additional premium, to cover other out-of-pocket expenses. Others may have access to a retiree medical plan through their former employer to help cover additional medical expenses.

    One issue to keep in mind is that if you retire prior to age 65, and want health care coverage, you may need to purchase an individual policy if a retiree plan is not available from your employer. Health care coverage may be expensive for older individuals.

Find What's Right For You

IRAs & Retirement

Insurance

More Investment Products

The right investment tools may play a critical role in working toward your retirement goals. Compare the potential tax advantages of Individual Retirement Accounts.

U.S. Bancorp Investments can help you determine the types of insurance that may be appropriate for you.

We offer investment products and services to help you work toward your goals and simplify your financial life.

Investment products and financial services are provided through U.S. Bank and/or its affiliate, U.S. Bancorp Investments.

Investment products are:

Not a Deposit Not FDIC Insured May Lose Value Not Bank Guaranteed Not insured by any Federal Government Agency

U.S. Bank, U.S. Bancorp Investments, Inc., and their representatives do not provide tax or legal advice. Each individual's tax and financial situation is unique. Individuals should consult their tax and/or legal advisor for advice and information concerning their particular situation. Non-qualified withdrawals are subject to all applicable federal and state income taxes, and may be subject to a 10% federal penalty. Please consult your tax advisor or legal counsel for advice and information concerning your particular situation.

This material is based on data obtained from sources we consider to be reliable. It is not guaranteed as to accuracy and does not purport to be complete. This information is not intended to be used as the primary basis of investment decisions. Because of individual client requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. It is not a representation by us or an offer or the solicitation of an offer to sell or buy any security.

For U.S. Bank:

U.S. Bank is not responsible for and does not guarantee the products, services or performance of affiliates.

For U.S. Bancorp Investments, Inc.:

Investment products and services are available through U.S. Bancorp Investments, Inc., member FINRA and SIPC, an investment adviser and a brokerage subsidiary of U.S. Bancorp and affiliate of U.S. Bank.

Insurance products including annuities are available through U.S. Bancorp Insurance Services, LLC, and U.S. Bancorp Investments, Inc.; in Montana, U.S. Bancorp Insurance Services of Montana, Inc.; and in Wyoming, U.S. Bancorp Insurance & Investments, Inc. All are licensed insurance agencies and subsidiaries of U.S. Bancorp and affiliates of U.S. Bank. Policies are underwritten by unaffiliated insurance companies and may not be available in all states. CA Insurance License # OE24641.

The Financial Industry Regulatory Authority (FINRA) Rule 2267 provides for BrokerCheck to allow investors to learn about the professional background, business practices, and conduct of FINRA member firms or their brokers. To request such information, contact FINRA toll-free at 1.800.289.9999 or via www.finra.org. An investor brochure describing BrokerCheck is also available through FINRA.

Get Started

Invest with an Advisor

Work with a dedicated advisor. For people with $100,000 or more to invest.

Call to Invest

Talk to a Financial Consultant at U.S. Bancorp Investments. For people with $1,000 - $100,000 to invest.

Invest on Your Own

Set up a self-directed online brokerage account or IRA account with U.S. Bancorp Investments.

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