Save for the Future… Your Retirement Checklist

September 21, 2016

skd239525sdcDo you believe you are on track and saving enough to retire comfortably? “Only six in 10 boomers report having money saved for retirement, down sharply from prior years when approximately eight in 10 had retirement savings” as reported in a recent IRI report.[i] No matter what age you are now, how can you better prepare and save for the future?

Pointers for the Accumulation Phase

An important action you can take is to determine your retirement needs. This task involves identifying your potential retirement expenses, as well as estimating the amount you might receive from each potential source of retirement income (Social Security, pensions, personal investments, and employment earnings).

Doing this calculation will give you an idea of how much you may need to finance your retirement. Do not be surprised if the numbers add up to be a large sum — after all, this money may need to support you for 20 or 30 years. Fortunately, there are strategies that may help you better leverage your dollars.

As a business owner, you will want to start early and contribute as much as possible to retirement plans to help you to accumulate more money. Why? Because investing in these tax-advantaged accounts means your money will work harder for you. The longer the money sits untouched, the more it can potentially compound. By starting a retirement plan for your business, you may be able to gain the advantage of having higher contribution limits, giving you even greater accumulation. As a bonus, having a retirement plan for your business could be instrumental to attracting and retaining quality employees.

Another important step: determine an appropriate asset allocation — how you divide your money among stocks, bonds, and cash — for your portfolio. This should be based on your financial goals, tolerance for investment risk, and time horizon. Be aware that your asset allocation will need to be adjusted periodically in response to major market moves or life changes.

Once you are nearing retirement, it will also be necessary to design a solid plan for distribution of your assets. Did you know that half of non-retirees are ‘very’ or ‘somewhat’ worried about outliving their savings?[ii]  That is why it’s essential to determine an appropriate annual withdrawal rate. This amount will be based on your overall assets, the estimated length of your retirement, an assumed annual rate of inflation, and how much your investments might earn each year.

Another consideration: After age 70½, you will have to begin making an annual withdrawal from some tax-deferred retirement accounts (known as a required minimum distribution (RMD)). Preparing for this phase ahead of time may help reduce your tax burden — especially if your annual RMD may push you into a higher tax bracket.

Likewise, this is the time to make sure your final wishes are accurately documented and estate strategies are well underway to minimize your heirs’ tax burden. As you can see, planning for the different phases of retirement is a lifelong process.

Retirement Planning Checklist

Are you some years away from retirement or getting close? Refer to one of these two checklists to identify what you should be thinking about. Look to a financial professional and your tax and legal advisors to answer questions you may have about these items and help make sure your retirement plan is on target.

  • Saving for the Future
    • Have you performed a comprehensive retirement income needs calculation?
    • As a business owner, have you established an employer-sponsored retirement plan to optimize your savings and help attract quality staff?
    • Are you contributing enough to potentially reach your financial goal within your desired time frame, by maximizing contributions to tax-advantaged retirement accounts?
    • Is your asset allocation aligned with your retirement goal, risk tolerance, and time horizon?
    • Have you determined if you might benefit from contributing to different types of plans?
    • Do you review your retirement portfolio each year and rebalance your asset allocation if necessary?
  • Nearing Retirement
    • Do you know the payout options available to you (e.g., annuity or lump sum) with your retirement account, and have you reviewed the pros and cons of each option?
    • Have you considered your health insurance options, (i.e., Medicare and various Medigap supplemental plans or employer-sponsored health insurance), out-of-pocket medical expenses, and other related health care costs?
    • Have you contacted Social Security to make sure your benefit statement and relevant personal information are accurate?
    • Should you purchase long-term care insurance? If so, have you investigated which benefits are desirable?
    • Is your asset allocation properly adjusted to reflect your need to begin drawing income from your portfolio soon?
    • Have you determined an appropriate withdrawal rate of your assets to help ensure that your retirement money might last 20, 30, or more years?
    • Have you figured the amount of your annual required minimum distribution (RMD) and developed a strategy to reduce your tax burden once you are required to begin taking RMDs?
    • Have you reviewed all your financial and legal documents to make sure beneficiaries are up-to-date?
    • Are you making effective use of estate planning tools (such as trusts or a gifting strategy) that could reduce your taxable estate and pass along more assets to your heirs while also benefiting you now?

In Summary

  • Planning for retirement is a lifelong process. Determining your retirement needs by identifying your potential retirement expenses and sources of retirement income is an important step.
  • Starting to invest early for retirement and contributing as much as possible to tax-advantaged employer-sponsored retirement plans and IRAs are two ways to leverage your retirement dollars.
  • As a business owner, consider establishing an employer-sponsored retirement plan to optimize your savings and attract quality staff.
  • Determining an appropriate asset allocation — how you divide your money among stocks, bonds, and cash — is a time-tested strategy for helping you pursue your financial goal.
  • It is essential to determine an appropriate annual withdrawal rate of your assets during retirement so you don’t outlive your money.
  • After age 70½, you must begin making an annual required minimum distribution from certain tax-deferred retirement accounts. Preparing for this phase ahead of time may help reduce your tax burden.
  • Developing an appropriate estate plan is the important final stage of crafting an effective retirement plan.

Planning for retirement is a lifelong process. During your working years, determine your retirement needs and an appropriate asset allocation, begin investing as early as possible, and contribute as much as you can afford to tax-advantaged accounts to set the stage for an effective retirement plan.

To learn more, call AXA Association Business Solutions at 1-800-523-1125 to talk to a Retirement Program Specialist about the NSBA Members Retirement Program, or visit us at to learn how you can start saving today.

 * This article was contributed by Linda Lyons, Relationship Manager at AXA, an NSBA corporate partner.


About AXA Equitable

AXA Equitable Life Insurance Company has been helping members of associations plan for an independent retirement for over 45 years.

This article is based on our general understanding of the subject matter and is for informational purposes only. It should not be considered tax, legal or investment advice. You should seek the advice of your own tax, investment and legal professionals regarding your individual circumstances.

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GE-108031 (3/16) (Exp. 3/18)

[i] Boomer Expectations for Retirement 2015 – Fifth Annual Update on the Retirement Preparedness of the Boomer Generation, Insured Retirement Institute (IRI), April 2015

[ii] Wells Fargo/Gallup Investor and Retirement Optimism Index, August 2014