What You Need to Know About Retirement Planning

A Guide to Your Retirement Fund Distribution Calculator

When planning your retirement lifestyle, it is essential to understand the costs involved. This includes everything from planning for future healthcare expenses to transitioning into a new continuing care retirement community. By using a retirement fund distribution calculator, you can plan for your retirement efficiently and determine what your next step should be.

Read on to explore the different costs associated with retirement and how to prepare for them.

Are You Ready for Retirement?

If you are considering retirement, you may question whether it is the right choice for your lifestyle. After all, it is a significant life change, and we understand that decisions cannot be made on a whim.

Choosing to downsize and transition into a retirement community does not mean you must leave behind your life of luxurious daily activities and fine dining. Several life plan communities, such as Seafields, feature fine dining options with amazing views, patio lounges for the perfect combination of leisure and fine dining, as well as recreational activities nearby to let you enjoy the outdoors.

These are just a few of the many amenities available in our community. Discover all the exclusive luxury offerings at Seafields here.

Whether you decide to move into a senior living community immediately after retiring or give it a few years, most offer a wide array of hobbies and activities so that you can maintain a similar, if not enhanced, lifestyle filled with relaxation. Additionally, community events and workshops will allow you to brush up on your current interests as well as learn something brand new. Retiring may be the solution if this lifestyle makes sense to you.

Understanding a Retirement Fund Distribution Calculator

When it comes to checking retirement readiness, a retirement fund distribution calculator is one of many tools used to get you started on your journey. There are a few to choose from but most typically help you to consider savings accounts and retirement income, as well as any other expected withdrawals and deposits. 

A Health Savings Account, or HSA for example, is used to save money for qualified medical expenses before taxes are applied. To reduce your overall healthcare costs, you can use them toward deductibles, co-payments, and other costs. In the event of an unexpected medical emergency, this can be very helpful. It is also wise to consider this along with your IRA accounts. 

Retirement Income

When looking at retirement and income, the average retirement income for a retiree is between $24,000 and $26,000 per year. It is important to note that your income can vary greatly according to your age since older retirees earn less. Generally, you should save at least 70% of your income before retirement to compensate for any loss of income during retirement. However, even if you started saving later in life, there is still room for improvement. 

Related: How to Plan for Rising Healthcare Costs in Retirement

Your monthly expenses and savings should be calculated based on your monthly income. The next step is to determine how much of the income will be subject to tax. It is essential that you check your state’s specific tax rate, especially if you live in a high-tax state. For example, South Carolina does not tax social security or retirement plans, and only partially taxes withdrawals from retirement accounts. In addition to having one of the lowest state tax rates in the country, the Palmetto State is one of the most tax-friendly states in the country for retirees.

Retirement Savings

In addition to your HSA and IRA, you should focus on saving a specific amount of money pre-tax each month. Depending on when you start saving, this may vary. As an example, you might want to consider saving one to one and a half times your income for retirement by age 35. If, however, you are 60 years of age, you may want to have between six and eleven times your annual income saved.

Expected Withdrawals and Deposits

When it comes to withdrawals and deposits, it’s important to understand the rules for specific accounts, as well as be prepared for the possible rising costs of healthcare. As a general rule, contributions to retirement accounts may be made pre-tax, such as to a 401(k) or an individual retirement account. Roth IRAs and 401(k)s allow contributions after taxes have been deducted, however, contributions and earnings can be withdrawn tax-free after age 59 and a half upon retirement.

Are You Prepared?

In addition to taking the rising costs of health care into account, you should also consider inflation. Regarding healthcare costs, it is essential to know and understand what kind of costs to expect from future appointments and diagnoses. Keep in mind the location of your retirement as well as your tax rate when calculating the actual cost. The tax regimes in each state differ, which has a significant impact on your social security benefits. 

Related: How to Choose the Right Senior Living Community

Regardless of the circumstances, inflation should always be factored in. Due to the rising costs of healthcare and inflation, it is a good idea to learn about the various factors that can help you save some money for the future. As long as you keep all of these things in mind, you should be well-prepared to begin your retirement journey.

Embark on Your Retirement Journey at Seafields

A comprehensive approach to retirement preparation is essential. As a retiree, worrying about medical expenses and other expenditures should not be one of your concerns. In view of the time-consuming maintenance aspect of aging in place, mortgages, and other monetary requirements, an independent living community can alleviate some stress of homeownership and allow you to pursue your passions.

At Seafields at Kiawah Island, you will find a variety of CCRC advantages to make your transition into retirement as seamless as possible. The Life Plan Community features a resort-style heated pool, bistro-style dining, as well as various wellness and recreational facilities. If this is the lifestyle you wish to pursue, please click the link below. It will be our pleasure to begin your journey with you!