Aug. 10, 2022

90. Retirement - Starting with the Basics

90. Retirement - Starting with the Basics

So maybe up to this point you thought about retirement from time to time, but never got around to getting serious about it and creating a plan. Where do you begin? What are some of the basic factors and concepts that you need to be familiar with?...


So maybe up to this point you thought about retirement from time to time, but never got around to getting serious about it and creating a plan. Where do you begin? What are some of the basic factors and concepts that you need to be familiar with? That’s the discussion on this episode of CFO at Home with CFP and Founder/CEO of Woodall Wealth Management, James Woodall.

Key Takeaways

  • When getting serious about your retirement:
    • Verify assets that you have - do you have old retirement accounts from other employers or default retirement contributions with your current employer?
    • Take a close look at your spending. Going forward, how much could you contribute monthly to your retirement?
    • Consider small increases to your contributions annually. Some employers will automatically increase your contributions by a percent or so.
    • Consider the timing of when you plan to start to draw Social Security
  • Roth versus Traditional 401k considerations
    • Income -  There are income limits on qualifying to contribute to a Roth 401K
    • Unlike Traditional 401K/IRAs, you or your heirs do not have to take Required Minimum Distributions from a Roth 
    • Growth on a Roth account is tax free as long as they stay invested at least 5 years
  • The 4% Rule
    • Assumes that in retirement you can safely withdrawal 4% of your account balance/year for living expenses and not run out of money in your lifetime
    • A typical retirement consists of:
      • Go-Go Years - Early years of retirement when you’re still very physically active. Can be more expensive due to travel costs, etc. 
      • Slow Go Years - Slowing down, spending more time at home, spending less money
      • No-Go Years - Mostly staying at home. Living expenses decrease (particularly while health is still good)
    • Spending may be > 4% in Go-Go Years, < 4% by No-Go Years
  • Annuities
    • Sold by insurance companies. Provides a guaranteed income because the insurance company assumes the risk of return. In exchange, may provide a lower rate of return than investing on your own
  • Six behaviors to adopt for a successful retirement
    • Have faith in future - understand market cycles
    • Be patient 
    • Be disciplined 
    • Have the right asset allocation
    • Be diversified in your investments
    • Regularly rebalance your investments 

Resources, Ways to contact