Skip to main content

 530 242-6155  david.chapple@lpl.com
  •  
  •  

Book a Meeting Client Login

  • Home
  • About
  • Process
  • Products and Solutions 
    • Manage
    • Invest
    • Insure
    • Retirement Planning
  • Resources 
    • Market Insight
    • Weekly Market Commentary
    • Economic Commentary
    • Bond Market Perspectives
    • Video Library
    • LPL Financial Research
    • LPL Research: Who We Are
    • Calculator Library
  • Blog
  • Contact

    You are here

  1. Home
  2. Products and Solutions
  3. Retirement Planning

Retirement Planning

Retirement Planning

Retirement planning today has taken on many new dimensions that never had to be considered by earlier generations.  For one, people are living longer. A person who turns 65 today could be expected to live as many as 20 years, or more, in retirement as compared to a retiree in 1950 who lived,  on average, an additional 15 years.  Longer life spans have created a number of new issues that need to be taken into consideration when planning for retirement.

Lifetime Income Need

There actually is a lifetime after retirement and the need to be able to provide for a steady stream of income that cannot be outlived is more important than ever.  With the prospect of paying for retirement needs for as many as 20 years, retirees need to be concerned with maintaining their cost-of-living.

Health Care Needs

Longer life spans can also translate into more health issues that arise in the process of aging.  The federal government provides a safety net in the form of Medicare, however, it may not provide the coverage needed especially in chronic illness cases.  Planning for long-term care, in the event of a serious disability or chronic illness, is becoming a key element of retirement plans today.

Estate Preservation

Planning for the transfer of assets at death is a key element of retirement planning especially if there are survivors who are dependent upon the assets for their financial security.  Planning for estate transfer can be as simple as drafting a will/trust with your legal advisor, which is essential to ensure that assets are transferred according to the wishes of the decedent. Larger estates may be confronted with settlement costs and sizable death taxes which could force liquidation if the proper planning is not done.

Paying for Retirement

Retirees who have prepared for their retirement usually rely upon three main sources of income: Social Security, individual or employer-sponsored qualified retirement plans, and their own savings or investments.  A sound retirement plan will emphasize qualified plans and personal savings as the primary sources with Social Security as a safety net for steady income.

Social Security

Social Security was established in the 1930’s as a safety net for people who, after paying into the system from their earnings, could rely upon a steady stream of income for the rest of their lives.  The age of retirement, when the income benefit starts was, originally, age 65 which was referred to as the “full retirement age”.  Now, for a person born after 1937, the full retirement age is being increased gradually until it reaches age 67 for all people born in 1960 and beyond.  The amount paid in benefits is based upon the earnings of an individual while working.  If a person wanted to continue to work and delay receiving benefits, they could do so build up a larger benefit.  Conversely, early retirement benefits are available, at a reduced level, as early as age 62.

Employer-Sponsored Qualified Plans

Most employer-sponsored plans today are established as “defined contribution” plans whereby an employee contributes a percentage of his earnings into an account that will accumulate until retirement.  As a qualified plan, the contributions are deductible from the employee’s current income.  The amount of income received at retirement is based on the total amount of contributions, the returns earned, and the employee’s retirement time horizon.  As in all qualified plans, withdrawals made prior to age 59 ½ may be subject to a penalty of 10% on top of ordinary taxes that are due.

Depending on the size and type of the organization, they may offer a 401(k) Plan, a 457 Plan, a Savings Incentive Match Plan for Employees (SIMPLE IRA), a Simplified Employee Pension Plan (SEP IRA) or, in the case of a non-profit organization, a 403(b) plan.

Traditional and Roth IRAs

Individual Retirement Accounts (IRA) are tax qualified retirement plans that were established as way for individuals to save for retirement with the benefit of tax favored treatment. The traditional IRA allows for contributions to be made on a tax deductible basis and to accumulate without current taxation of earnings inside the account.  Distributions from a traditional IRA are taxable.  A Roth IRA is different in that the contributions are not tax deductible, however, the earnings growth is tax deferred. To qualify for tax-free and penalty-free withdrawals of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum).  Depending on state law, Roth IRA distributions may be subject to state taxes. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

Distributions from traditional IRAs and traditional employer-sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching 59 ½ , may be subject to an additional 10% federal tax penalty.

For more information on retirement income needs and income sources, please contact us today.

Book a Complimentary Consultation

Tell a Friend

Looking to learn more?

Get in touch today

Contact Us

Additional info

  • Sitemap
  • Legal, privacy, copyright and trademark information

Contact info

  •   2400 Washington Ave Suite 300, Redding, CA 96001
  •   530 242-6155
  •   david.chapple@lpl.com

Contact us

Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA & SIPC.

California is my state of domicile and principal place of business. CA Insurance #0E14201.

The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: AK, AZ, CA, FL, HI, IA, ID, MI, MO, MT, OR, PA, TX, VA, WA

Representative can be appointed in any state upon payment of registration fee.

© 2023 David Chapple Financial Services. All rights reserved.

Website Design For Financial Services Professionals