Creating a retirement plan is like trying a new recipe – with proper ingredient preparation and by following the directions, there’s a good chance you’ll create something that will make you proud. Of course, once you start cooking and gain confidence and experience, you often discover modifications that make a recipe a better fit for you.
The plynty planning app allows you to create variations of a straightforward financial recipe that may have been passed down for generations in your family: start with income, add savings, then decide what optional “ingredients” (annuities, etc.) might suit your own tastes — without giving you heartburn. The recipe below has a longer preparation time for the ingredients, but once they are prepped, the final product takes less time to come together.
Makes: 1-2 retirement plans Prep: 30 mins Planning: 15 mins Confidence per Serving: Well Done
- Income Sources
- Expense Estimates
- Balance and Perspective
1. Prepare a list of your retirement income sources. Make a list of your planned retirement income sources. If you have an online account, have your login information at hand. If you contribute to a 401(k), make sure you know how much both you and your employer currently contribute. If you have investment accounts, check for any advisor fees. Here is a short list of common income sources to use as your starting point:
- Retirement savings (e.g., cash, 401(k), IRA, investment accounts, HSA)
- Government-sponsored benefits (e.g., Social Security payments)
- Employer-sponsored benefits (e.g., pensions)
- Salary (e.g., full-time or part-time retirement job)
- Other (e.g., rental, small business profits, alimony)
2. Prepare a list of your planned retirement expenses. Make a list of your planned retirement expenses. When considering housing expenses, ask yourself: do you plan to pay off your mortgage by retirement; live in your current home or relocate in retirement? Here is a short list of common retirement expenses to use as your starting point:
- Housing expenses (e.g., mortgage/rent, property taxes, insurance, HOA fees, home maintenance/repair, home warranty)
- Essential living expenses (e.g., food, clothing, and utilities)
- Non-essential living expenses (e.g., entertainment, dining out, hobbies, subscriptions, gifts)
3. Use plynty to combine your ingredients. Slowly add your income sources and expenses into plynty and watch it calculate your projected cashflow in retirement. Consider adding in optional ingredients such as an annuity or a reverse mortgage to protect yourself against the risk of outliving your savings or bring in additional income in retirement. It is important to maintain flexibility and make changes to your plan as life circumstances change (such as starting a new job with a new 401(k)).
plynty will hum along in the background to help keep you on track. We recommend checking in every 1-2 months to ensure that the ingredients you’ve chosen for your plan are still the best fit for you. plynty allows you to stay focused on the present while never losing sight of your future. Bon appétit!
If you completed the recipe above, you deserve a treat! Here’s a recipe for several quick 3-minute mug cakes.