Emerald’s Education Series: Retirement Planning the Emerald Way

Emerald’s Education Series: Retirement Planning the Emerald Way

Retirement planning is an essential part of any financial plan. Emerald works with clients to create plans based on individual needs and family situations. Client goals vary from person to person, and enjoying retirement looks unique for every person. In this portion of Emerald’s Summer Series, we will look at the future of retirement planning, what essentials are necessary for planning, and the steps you can take now to work towards your ultimate retirement plan.  

The future of retirement planning 

Throughout Americans working careers, they have been paying into Social Security. Many people depend on this government-sponsored retirement program as an integral part of their retirement income. However, that was not what it was initially created for; therefore, those benefits look thinner than they did in the past[i]. As a result, most in the financial industry would not encourage clients to rely solely on Social Security for their primary source of income in retirement. Instead, somebody can view Social Security as one of many retirement buckets to pull from in the golden years of life.  

The essentials for planning ahead  

It is commonplace for companies to offer 401(k) plans to their employees as a retirement benefit, some even contributing to those accounts on the companies’ behalf as an additional incentive for employees. This valuable tool teaches you to live on less than you make, a skill that translates well in later years when earning power may be less. In addition, the contributions to a 401(k) are made on a pre-tax basis, which reduces your taxable income in the year you deferred the income. But remember, when it comes time to make withdrawals, you’ll be taxed on those monies at your current tax bracket.   

Deferred Compensation Plans (DCP), Restricted Stock Units (RSUs), a Roth 401(k) or a pension plan are additional benefits that Emerald is well-versed in helping clients navigate for retirement purposes. If you receive these types of benefits, Emerald skillfully helps you utilize them to their maximum potential while also considering your other retirement tools.  

Steps to take now for proactive retirement planning 

Step 1: Maximize your executive compensation benefits.  

Emerald understands the life of busy executives, so we take away some of the heavy lifting and help you plan, use, and maximize these benefits. At Emerald, we are big on the purpose behind a decision. So, when you receive DCP or RSUs, we help you develop a plan to address paying off specific debt, set aside money for taxes, buy that second home, plan for retirement, or donate to a charity. But one of the biggest perks of working with Emerald is knowing how to put benefits to your best use.  

If you are starting out in the workplace and have the option to participate in a retirement plan, we highly recommend that you do so. Beginning healthy savings habits early is essential to long-term success, especially regarding retirement. You may have a few questions about this topic, and Emerald is a valuable resource to tap into; call anytime.  

Step 2: Open an IRA if you don’t have one.  

As mentioned earlier, it’s probably not wise to think Social Security will be enough to live on, so being realistic includes other forms of retirement planning/saving. Emerald encourages those with W2 income to open an IRA, including their children and grandchildren, as soon as possible. The gift of compound interest over time gains more ground the earlier you start. There are rules around the type of IRA you choose and contribution levels, so be sure to work with Emerald to select the one most suited to your situation.   

*In case you missed it, we shared a blog about what you can do to recession-proof your retirement savings at any age. Now is an excellent time to revisit this helpful article.  

Step 3: Take an honest and yearly look at your retirement accounts.  

As an Emerald client, you can view your retirement accounts in one place – eMoney. This platform is available through our Client Login page of the website. Many clients are utilizing this resource already, but if you are not, reach out to us to receive your login link. Once you sign on, it will take just a few minutes to connect your relevant accounts in eMoney and see them all in one place. If you would like further help to make the most of this helpful tool, please don’t hesitate to schedule a time with us.  

You may have changed jobs and lost track of an old 401(k) plan started with a previous employer. Finding and consolidating these accounts now will be helpful in years to come so you know what accounts you have and how much is in each account. There are also plans from the Secure 2.0 Act to create a service to help Americans track down lost plans to increase retirement savings. We will keep you informed of the progression of this possible service.  

So let’s review the steps we suggest taking to plan for your retirement proactively:  

• Maximize your compensation benefits. 
• Open an IRA if you don’t have one.  
• Take an honest and yearly look at your retirement accounts.  

Working with Emerald to create the right plan for you is a financial power move. Don’t hesitate to reach out if you want to discuss your retirement plan or learn more about leveraging Emerald’s offering.