F I N A N C I A L S E R V I C E S , L L C
CONGRESS EXPLORES CHANGES TO THE 401(k)
You’ve probably heard all the talk about how Social Security is going to run out of money. Some reports say the program will dry up by 2034, but that’s not necessarily the case. The reserves may start to get smaller, but the program will remain in place. People planning on incorporating Social Security into their retirement plan will get their benefits, though it may be less than they expect. To potentially help compensate, Congress is exploring the possibility of expanding 401(k) retirement plans. Part of that plan includes giving investors more opportunity to utilize annuities as part of their 401(k). Additionally, investors would know just how much annuity income their 401(k) could support. Congress is also looking into making it easier for small businesses to help their employees open a 401(k). As part of this plan, small businesses would be able set up automatic enrollment for their employees, and those employees would be able to save at a rate of more than 10 percent of their annual income. Of course, nothing is set in stone just yet. But this possible future of the 401(k) is important to us all when it comes to our retirements. Congress is looking at options in order to give more people the dollars they need to retire successfully. There is still a large portion of the population that isn’t properly prepared for retirement, and they won’t have the income flow they need once they stop working.
To make sure you don’t run out of money in retirement, there are two things you need to consider: Critical Income Need: This is the money you need in order to pay ordinary recurring bills. This includes housing costs, food, gas, and so on. These are the expenses that, for the most part, are going to be there month to month. This is one area of your income you want to remain stable. Lifestyle Wants: Once you stabilize your critical income need, you can turn to your overall lifestyle goals. This is more related to the investment risk you are willing to take on, particularly as you save for retirement. This is the opportunity to make your dollars grow into additional income you can use to fulfill your goals in retirement.
These are topics you need to discuss with your financial advisor or retirement planner. You don’t want to be left playing catch-up with your retirement plan. After all, that’s exactly what Congress is trying to prevent as they decide what changes, if any, to make to 401(k) plans. Here at Mattson Financial, we’ve had this kind of planning in place since the very beginning. We understand what it takes to not only get to retirement, but to get through retirement. We want to make sure you have the money you need to enjoy the retirement you’ve envisioned for yourself. –Gary Mattson
And, as we all know, retirement is about income flow.
Published by The Newsletter Pro • www.thenewsletterpro.com
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