Retirement Planning

H.P. Financial Services

Retirement Planning

• What is retirement planning?

• What is the right age to start the planning?

• What is the right age to retire? Who decides it?

Fundamentals

• Goals

• Start date

• How much to save?

• How long to save for?

• How to invest wisely?

• Understanding tax implications

Good News & Bad News

• Bad News:– Our retirement life will be equally long as our working

life– Our parents are living longer (“Sandwich Generation”)– Child expenses are going up (i.e., College tuition)– It is a special time in the history of the US– Growing government deficit is leading to higher taxes– Social security is in jeopardy

Too Much Financial Noise!

• News about:– State of the economy– Real estate markets– Future trends– Etc.

• Media Sources:– TV– Internet– Magazines / Newspapers– Etc.

Good News…

• Tighter government regulations (following the recent financial crisis)

• Banks and insurance companies are becoming more innovative, competitive, and progressive

• Consumers have more options

• The public is learning its lesson

H.P. Financial’sRetirement Solution

• Plan early, Start early• Pay yourself first• Be consistent• Understand the drag on your resources• Understand the tax impact on your retirement

income• Understand various investment options as well

as investment fallacies• Develop good savings habits

The Time Value of Money

Which option would you pick?

1. Invest $16,000 and have $1,035,160 after 39 years

2. Invest $78,000 and have $883,185 after 39 years

Understanding the US Tax System

• The IRS taxes every type of income, growth, investment, and transfer

• The IRS allows only two of the following three:– Tax Deduction (i.e., IRA, 401k, etc.)– Tax Deferral– Tax-free Withdrawal (i.e., Roth IRA, Life

Insurance, etc.)

H.P. Financial’sSmart Money Investment Order

• Free Money – 401k Matching

• Tax-free Money – Roth IRA, Life Insurance

• Tax-deferred Money – IRA, 401k

• Taxable Money – CD’s, Mutual Funds

H.P. Financial’sSmart Investment Advice

• Never go backwards

• Ensure for a guaranteed income during retirement

• Do not outlive your retirement money

For a free consultation:

harshadshah@sbcglobal.net

408.422.9007