Are you planning your retirement? Focus on these seven key areas

Question: Stephen and Jenn in Springdale: What do you think are the most important financial aspects to consider when planning for retirement?

A: We’re glad you asked this question because most people don’t. In fact, according to a 2020 study by the TransAmerica Center for Retirement Studies, only 18% of current retirees have a retirement plan that is actually written. And 42% don’t have a retirement strategy, period.

What we’ve discovered over the years working with clients from all walks of life in all tri-states is that there are essentially seven major “decision points” that need to be considered when planning for your retirement:

  • Retirement income needs (determining the income you will need to replace when you stop working)
  • Expense and debt management (analyze how to reduce the debt burden before retirement)
  • Tax planning (strategically plan the types of retirement accounts you use as well as the timing of retirement withdrawals and amounts)
  • Investment management (maximizing returns from your investments to create sufficient income to preserve your capital)
  • Risk management (controlling or minimizing the impact of unforeseen events on your money)
  • Estate and estate planning (deciding in advance what will happen to your money and possessions after you leave)
  • Distribution and sources of income (analyze the best sources from which you can derive your income and in what order)

Here’s Allworth’s advice: Preparing for retirement is something most people think about, but many are hesitant to start. In our experience, people who live well through retirement typically do so because they’ve taken the initiative and worked with a trusted financial advisor to create a personalized plan that comprehensively addresses these seven main areas.

Q: Andrew to Ludlow: I owe about $5,000 in taxes this year. I’m thinking of paying this with a credit card to get the rewards. Is there a downside to doing this?

A: First and foremost, if you decide to go this route, we hope that you are a responsible user of your credit card and that you pay all of your credit card bills each month. Otherwise, you’ll end up paying interest charges on that $5,000, which, frankly, would be a pretty dumb move just to get rewards points.

However, give us the benefit of the doubt and assume that you are a responsible credit card user. The only other word of warning we have for you is that the IRS charges an additional fee for paying your tab by credit card. Depending on the payment processor or service provider you choose, these fees can range from 1.87% to 3.93% (and in most cases there is also a minimum dollar amount). So, in your case, you would spend between $94 and $197 more for the luxury of using a credit card. And don’t forget to compare your reward percentage to the fee percentage – if your card offers a lower reward percentage than the fee you pay, it probably doesn’t make sense.

Allworth’s advice is that paying your taxes with a credit card can sometimes be a reasonable option, but only if you pay off your credit card each month and the rewards exceed the transaction fee.

Each week, Amy Wagner and Steve Sprovach of Allworth Financial answer your questions. If you or a friend or family member has a money problem or problem, please feel free to send these questions to [email protected].

The answers are provided for informational purposes only and individuals should consider whether any general recommendation contained in these answers is appropriate for their particular situation based on their investment objectives, financial situation and needs. To the extent a reader has any questions regarding the applicability of any specific matter discussed above to their individual situation, they are encouraged to consult with professional advisor of their choice, including a tax advisor and/or attorney. . Retirement planning services offered by Allworth Financial, an SEC-registered investment adviser. Securities offered by AW Securities, a registered broker/dealer, Member FINRA/SIPC. Call 513-469-7500 or visit

Comments are closed.