Prepare for the Future with Retirement Planning

 In Financial Planning

If you’re wondering how to plan for retirement or whether you’ll have enough money in retirement, you’re not alone.

According to the National Institute on Retirement Security, 55% of Americans are concerned about achieving financial security in retirement.1 Common concerns include the risk of outliving one’s retirement savings or whether Social Security and other income sources will keep up with inflation. Others worry about the potential impact of medical expenses.2 

Perhaps the best way to ease your anxiety about the future is to start planning for retirement now. At The Resource Center, our financial advisors can help you assess how much you’re likely to need in retirement and develop retirement income strategies for meeting your goals. You’ll want a retirement plan that lets you monitor progress toward your goals and gives you the flexibility to adjust as your needs change. You’ll also want to consider potential sources of retirement income that may be available to you.

Planning Your Retirement Income Strategy

One popular approach to retirement planning is known as the “bucket strategy.” This means dividing your assets into three categories, or buckets, based on how soon you’ll need them:3  

  • The first bucket is for funds to cover short-term expenses such as housing, food, utilities and clothing, as well as your emergency fund. Checking and savings accounts are a good place to keep your money within easy reach.3
  • The second bucket is for money you’re likely to need within 3 to 10 years. For this category, many people opt for conservative investments like bonds or certificates of deposit (CDs).3
  • The third bucket would be for funds you’re not likely to need for a decade or longer. This is where many people choose to invest in more aggressive options like stocks.3 

It’s also a good idea to adjust your portfolio as you get closer to retirement and after major life events. Earlier in your career, your primary focus may be building wealth. Later in life, generating short-term income may become a bigger priority.4 

Assess Your Likely Expenses

Think about how much it costs to maintain your current lifestyle. What may change when you retire? What is likely to stay the same? 

Start with basic necessities like housing, utilities, food, clothing, transportation and insurance. Make sure you’re bringing in enough income each month to cover these costs. Don’t forget about discretionary expenses like travel and entertainment.5

Take a look at your current and potential health expenses. Will you have enough to cover medications, managing chronic conditions, surgery or other costs? Will you be prepared if you should need long-term or skilled nursing care?4 

Watch Out for Taxes

Pay attention to your tax bracket each year, and consider the different types of taxes which may affect you when planning for retirement. These may include income, capital gains, Medicare surtaxes and Social Security taxes.6 If tax laws change, you may need to reassess your retirement income strategies to minimize your liability.

Keep in mind that the retirement accounts you have will also affect your tax situation. If you have a tax-deferred account such as a traditional IRA or 401(k), you’ll pay taxes on the money you withdraw starting at age 72. If you have a Roth IRA, you’ll pay no taxes on withdrawals. One potential strategy is to plan a Roth conversion during a lower-income year to minimize tax implications.3   

Sources of Retirement Income

Start by identifying predictable sources of income in retirement to cover necessities such as food and housing. Examples of predictable sources include Social Security payments, IRA or 401(k) distributions or lifetime annuities. You may turn to additional options, such as working part-time or renting a spare bedroom, for extra funds to cover discretionary expenses like travel and entertainment.4 Having diverse retirement income sources will help mitigate the effects of any unexpected costs and risks. 

Withdrawal Strategy

If you have a defined contribution plan such as a 401(k), you must begin taking required minimum distributions (RMDs) by April 1 after you turn 72, or after you retire, whichever is later. If you have an IRA, you must begin RMDs by April 1 after you turn 72. You may withdraw more than the required RMD, but may not apply that amount to future years’ RMDs.

For other types of investment accounts, you’ll need to decide what percent of assets to withdraw starting with your first year of retirement. A traditional rule of thumb is to take 4% the first year, and then adjust that amount by inflation in subsequent years. It’s important to remember, however, that everyone’s situation is unique. You’ll want to consider a number of factors including how much you need to live on, how many sources of income you have and whether you’ve experienced any significant life changes.3  

Social Security

You may begin claiming Social Security benefits as early as age 62. However, you aren’t entitled to full benefits until you reach full retirement age, which varies from 66 to 67 depending on the year you were born. If you delay taking benefits until age 70, your benefit will increase even more.

If you start taking benefits at age 62, you’ll only receive about 70% of what you would have gotten by waiting until 67. If you delay until age 70, you may receive as much as 124% of your scheduled benefit at age 67.3  


If you’re concerned that you may outlive your retirement savings, you can purchase annuities to guarantee monthly income for life.3 There are different types of annuities available depending on your needs. Immediate annuities, as the name implies, allow you to begin receiving payments within one time period after your initial purchase. Earnings accumulate on a tax-deferred basis, and you only pay tax on income earned from your investments.

Deferred annuities begin paying you at a later time in the future, depending on the terms of your contract. As with immediate annuities, earnings from deferred annuities can grow tax-deferred and you are only taxed on income earned.

Part-Time Employment

It’s estimated that about 1 in 5 retirees continue working in some capacity after finishing their full-time careers. Part-time work offers a chance to bring in extra income. Some also find it’s a great way to stay active and engaged in the community. Another option is to pursue self-employment such as consulting or freelance writing.7 

By planning ahead and considering all of your options, you can take control of your future and look forward to a retirement you can enjoy. When you’re ready to plan for retirement, come see us at The Resource Center. Our financial advisors are here to answer your questions, help you define your goals and map out a retirement strategy for achieving them. 

Contact The Resource Center online or call us at 417-882-1800.


Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. Investing involves risk, including the potential loss of principal. Any references to protection benefits, safety, security, lifetime income, etc generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including (but not limited to) a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA. It is generally preferable that you have funds to pay the taxes due upon conversion from funds outside of your IRA. If you elect to take a distribution from your IRA to pay the conversion taxes, please keep in mind the potential consequences, such as an assessment of product surrender charges or additional IRS penalties for premature distributions. The Resource Center, Inc. is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and The Resource Center, Inc. are not affiliated companies. 1012087-8/21










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