Retired educators cannot live on Social Security checks alone - at least not in the lifestyle you have become accustomed to, according to our recent webcast seminar.
Planning, says financial advisor Tia Lee, is critical for protecting quality of life in the years beyond the classroom.
"You should have a road map for the future," says Lee, Director of Wealth Planning for Spectrum Management Group, a wealth management firm in Indianapolis. "You should have a spending plan that includes fixed, irregular and variable expenses compared to your income, discretionary income and savings."
During the online seminar presented by the Indiana Retired Teachers Association and Spectrum, Lee demonstrated how to define financial independence, explored the sources of retirement income and explained how retired educators should take ownership of your cash flow planning before and during retirement years.
"An ounce of planning is worth a pound of sleepless nights," says Lee, a Certified Financial Planner™ and a Certified Trust and Financial Advisor.
According to the Social Security Administration, 9 out of 10 retirees have income other than Social Security benefits. Most Indiana teachers have pensions, retirement accounts, Social Security, savings and other income such as part-time employment, business income or rental properties.
Planning how to draw from those income resources is important before deciding when you are going to retire.
Read our in-depth guide: Retirement Guide for Indiana Teachers
Lee says the plan should developed based upon several factors, including:
- When other sources of income pay out.
- The impact of inflation on investments.
- Options for pension benefit payouts.
- When you want to retire.
- Realistic expectations of investment returns.
- Tax implications of withdrawing money from certain types of accounts.
- The fluctuations and volatility of the stock market.
The webcast was the first of several to be hosted by IRTA. Upcoming retirement planning webcasts will be announced on IRTA's website, retiredteachers.org, and on our Facebook, Twitter and LinkedIn pages.