Can I Retire With $1 Million in my 401(K)?

“I am 61 years old with a million dollars in my 401(k). Can I afford to retire?”

We hear questions like this often, and this is one of the first determining factors: it depends on how much you want to spend. It also depends on if you want to continue earning some income through part-time work or if you want to live off of your savings. Both are excellent options, so here are some points we encourage you to ask yourself whether you’re just getting started or if you’re actively planning.

Questions to Ask Before you Retire

How Much Debt do You Have?

Part of retirement planning is determining what your liabilities are. Even if you’re still ten or twenty or thirty years from retirement, debt management is one of the first things you can plan for. Having excessive credit card debt can make it difficult to afford retirement. Working with a financial planner can help determine which payoff strategy will help you achieve your goals faster.

How Much Income do you Want?

There’s a difference between planning for the income you need versus planning for the income you want. Do you want to travel, start your own business, invest in a new hobby, get a vacation home? Whatever your dream may be, we want to help you get the most out of your retirement. You worked hard for it!

What is Your Investment Experience?

Your retirement is an investment. You put years of time and energy into your career to save for retirement, but you won’t necessarily become an investment professional when it’s time to start living off a fixed income. Do you have a recovery plan prepared in the event that you lose some of your investment? If now, we can help with that.

How is Your Health?

Your health is important to consider because you will need to factor in medical expenses. You’ll also need a plan for how to pay regular bills as your health changes. If you already have a plan, have you also considered establishing a trust to help protect your assets in the event that you need to invest in long-term care?

 

Risks to Consider

1. Investment

Maximizing your 401(k) involves learning about how investments grow over time. It also involves knowing how and when the stock market can impact the success of your investments. Do you feel comfortable managing your own investments?

2. Inflation

When thinking about the future, we recommend planning for the value of a dollar to decline. You might be able to retire on $1 million dollars today–but will your savings hold their value? To answer some concerns, we filmed a break-down on Kolr 10’s, Ozarks Live on how inflation can impact your future financial plans.

3. Healthcare Costs

Are you confident that you’ve planned for rising healthcare costs? Healthcare trends can be unpredictable, so we strive to help people prepare for unexpected obligations.

4. Longevity or Mortality Risk

Longevity risk refers to the concern of outliving your retirement savings, either from advanced life expectancy or lack of financial distribution. This is often a challenging aspect of retirement planning.  How long do you plan to live?

5. Public Policy Risk

This refers to the system of laws that are regulated by a government agency. You can’t always plan for unexpected changes in public policy, but you can plan your financial reserves.

 

Get a Professional Opinion

The Resource Center is a local team in Springfield, Missouri. Working with a local team is an excellent option for anyone who enjoys a personable, one-on-one experience and you know everyone by name. Our mission is to help make your experience easier. We strive for success in everything we do and are privileged to have the opportunity to build a stronger community. 

Whether you’ve already begun your retirement planning or are just getting started, we encourage you to schedule a consultation to help determine the best strategy for your family. 

Catch Bruce Porter’s show Dollars & $ense Tuesdays at 3pm on KOLR’s Ozarks Live

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Investing involves risk, including the potential loss of principal. Any references to protection benefits of lifetime income 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. The Resource Center, Inc. is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services are offered only by duly registered individuals through AE Wealth Management, LLC, (AEWM).  AEWM and The Resource Center are not affiliated companies. 01244462 03/22