Four Major Steps to Prepare for Retirement
Article Provided By | ANB
“Planning for retirement is like planning for vacation,” says ANB’s Stella Knickerbocker. But this “vacation” can last for decades, so it’s not a decision to make lightly. A Senior Vice President and Trust Officer at ANB who has spent 35 years in retirement planning, Knickerbocker spends each day helping clients prepare for the transition of retirement.
Her retirement planning co-manager, Jason Dettman, an ANB Vice President and fellow Trust Officer, says some clients are retiring earlier than planned. Blame the pandemic, remote work, office closures, and other unexpected outcomes. “Some realized their time could be shorter than expected,” he explains. “They’d been working for 90 percent of their life and now it was time to do what they wanted to do.”
Whether you’re retiring early or on schedule, these five critical steps will help you prepare.
Start saving early.
Obviously, the more you can save for retirement the better, whether through an employer-sponsored 401(k) or another retirement vehicle, like the traditional IRAs and Roth IRAs offered by ANB. “The sooner you start saving, the more time you have for your money to grow,” Dettman says. “If you wait until you’re 50, you’ll just be trying to catch up.”
Look ahead.
Sit down and visualize your retirement so you’ll be able to make sure you have the resources to sustain it. Don’t just consider the right age to retire, but also how you plan to spend those years. Are you going to travel? Will you mostly stay home? Will you pull back from a 40-hour week but still pursue part-time work? “It’s a huge decision, so you need to think in terms of numbers and income,” Knickerbocker says. Don’t wait: Start planning seriously at least five years before you want to retire.
Also consider your potential lifespan. Most Americans will be retired for around 20 years depending on genetics and health factors. “Your family longevity and individual health definitely play into retirement,” she adds.
Choose a trusted advisor.
Retirement planning can be complex. There are tax implications, age restrictions, and Social Security benefits to consider. You’ll want an experienced guide to accompany you on that journey. “A lot of advisors can help you build your assets, but they don’t always help you plan what things look like after you retire,” says Dettman. Some financial advisors make income by pushing products, like insurance policies, with fees and commissions that benefit them.
However, ANB’s wealth management team is legally required to act as a fiduciary. “Instead of operating out of self-interest, we are bound by law to do what’s best for you, the customer,” Knickerbocker explains. “We don’t have conflicts of interest. We’re not trying to sell a product. Our job is to help you meet your goals and consider all the different resources you can use for your retirement.”
See the whole picture.
The bank’s trust and estate management services make ANB particularly qualified to navigate complex financial legacies. “We do full financial planning,” says Dettman, “from managing oil and gas royalties to real estate and farmland. Most other advisors don’t really take care of that. We’ll help you consider which income streams to leverage and how to take assets out from them most efficiently.”
ANB’s wealth management team can even help with the sale or transfer of a business. “We have clients with legacies they want to pass along to the next generation. We help the customers design their whole financial blueprint and assist them in developing it.” adds Knickerbocker.
Prepare emotionally.
There’s more to retirement than not working. According to Knickerbocker and Dettman, it’s tough for some clients to relax after a lifetime of careful time management. This transition can also clash with your relationship to money. “People are used to saving,” Dettman says. “They work and they save. But in retirement, there’s no income coming in and you’re just paying out. I’ve seen clients panic a little. Some people are scared to take money out of their accounts.”
They’re ready to retire, in other words, but not quite ready for the feelings that come with it. “That’s where you find value in a financial relationship manager who can guide you through these things,” he says. “We offer full financial planning.”
Knickerbocker and Dettman love helping ANB customers prepare for and meet their retirement goals. To learn more, visit your nearest branch or anb.com.