I had the pleasure of having dinner with an old friend who retired 1 ½ years ago.
He answered my question when I asked him, “what advice should I be offering my clients who are approaching retirement, based on your year and a half retirement experience?”
He kindly offered the following words of wisdom:
1.) IRA’s & 401K Money – He told me that he has a lot of qualified money (IRA’s, 401K, etc.) and if he had to do it again, he would have placed the money in Roth's or Roth lookalike plans. He’s now paying quarterly tax installments because of the high taxable income he’s receiving. He’s receiving plenty of money, but so is the IRS. The lesson...move to Roth’s or Roth lookalikes where the retirement money is non-taxable!
2.) Retire Later - In other words stay active, stay employed and stay productive. Maybe this means you can defer social security to an older age & receive a larger benefit. It will keep your mind sharp and you will exercise without evening knowing you’re doing it (and get you get paid).
3.) Do small things daily that increase your longevity prognosis and start that as early as you can! Perhaps no alcohol, no salt, more exercise daily. If you start small, the results will compound and probably increase your time on this earth.
4.) Do not rely on term insurance to take care of your family. Buy some amount of whole life or something similar, so your family will be taken care of. Include the free Long Term Care lookalike benefits that are on these contracts and protect against a LTC situation. Remember, it’s easier to qualify if you’re younger and healthy!
It was a very enjoyable dinner!