5 Things that you can control with retirement planning today that could grow your nest egg.

#1 You CAN control how much you pay in taxes in retirement.
Explain how taxes could be one of your biggest expenses in retirement. It’s confusing how many different ways you could be taxed on your retirement income. You’ll pay income taxes on your IRA and 401K withdrawals, dividend and pension income, real estate income, etc. Plus, you could get taxed on up to 85% of your social security benefits. You could even end-up paying higher taxes if your combined income from these different sources bumps you into a higher tax bracket.

#2 You CAN control generating income in retirement
With interest rates at record lows, many traditional “go-to” options for fixed income investors are no longer viable today. Warren Buffett recently said that “bonds are not the place to be these days” because of their “pathetic” returns.
But your returns could be even lower if you put your money into a CD. With interest rates still near 0%, you would be losing money when you factor in higher inflation.

#3 You CAN control how much you get from social security
Filing for social security could be one of the biggest financial decisions of your life. And it’s because hundreds of thousands of dollars are at stake. Claiming your benefits is complicated. According to Forbes, “there are 2,728 rules in their handbook. And there are literally hundreds of thousands of rules about those rules.” It’s so confusing that in a recent Mass Mutual survey, only 3% of pre-retirees answered all social security questions correctly. (CNBC).

#4 You CAN control inflation
Inflation is a general increase in prices that robs you of your purchasing power in retirement. And with the economy reopening and people competing to buy things in limited supply, inflation is on the rise.

What’s even more disturbing is that inflation has accelerated every month this year. January: 1.4% February: 1.7% March: 2.6% April: 4.2% May: 5%. Inflation rates are higher today than they’ve been since the 2008 financial crisis. And that could come at a worse time if you’re planning to retire in the next 5 years.


#5 You CAN control your investment risk
Because there’s been a stock market rally ever since the 2008 financial crisis, a market correction could be closer than you think. That’s why having a properly diversified portfolio is critical if you’re within 5 years of retirement. There’s always some risk with stocks. Your asset allocation should mirror your tolerance for risk.