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  • Writer's pictureMichael Urch

Financial Planning for Retirement: Steps, Plans, and Rules

Updated: Mar 22

Financial Planning for Retirement: Steps, Plans, and Rules


Financial planning for retirement is crucial for anyone who wants a successful retirement or work-optional lifestyle.



Financial Planning for Retirement



As a CERTIFIED FINANCIAL PLANNER,™ Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning. He prides himself on being a professional advisor who puts planning before products.


Tips on Essential Financial Planning for Retirement


Surprisingly, some people spend more time planning their annual vacation than they spend planning their retirement. We want to make sure that our clients have a plan in place and that they are confident that they will be able to retire knowing they will not run out of money.



Financial Planning Topics Covered:




How to Plan for Retirement 


There are two essential financial summaries to put together at the beginning of retirement planning. 


1) A net worth statement. This is a summary of all of the things you own (assets) and all of the money you owe (liabilities). It is a snapshot of your financial resources available for retirement.


2) A cash flow statement or budget. This is a summary of the annual income you expect to receive in retirement from social security and other sources, as well as your annual retirement expenses. (+)


Generally, you will have more expenses than income in retirement. You will then want to work with an advisor to create a plan to replace the rest of your income stream using the assets from your balance sheet.


How to Plan for Retirement 


How to Save for Retirement


It is important to regularly set-aside money for retirement.


The most common way to do this is by contributing to a 401(k) plan or 403(b) plan. IRAs and Roth IRAs can also be used as well as contributing to brokerage accounts. HSA’s are becoming a more common form of retirement savings as well. A general rule of thumb is to contribute 10% of your personal income to retirement, but we like to customize savings plans for our clients based on their specific situation. Schedule a 15-minute call if you want to talk to an advisor about personalized retirement savings strategies. (+)



Top 5 Retirement Planning Tips to Maximize Your Employment Benefits


  1. Contribute enough to get the employer match on your retirement accounts.

  2. Consider contributing to a Roth 401(k)/403(b) if you expect to have your income increase in the future.

  3. Evaluate whether you should choose a health insurance plan that allows you to contribute to an HSA. If yes, maximize your HSA for retirement

  4. Review your benefits packet for any deferred compensation benefits and make sure you are utilizing them.

  5. Make sure that you are utilizing all tax benefits (health insurance is pre-tax, FSA and dependent FSA accounts, etc.)


Retirement Planning Tip


How to Invest for Retirement


Equities (stocks) are an asset class that has historically beaten inflation for the long-term.


The longer someone’s time-frame for investing and the further that they are from retirement, the more they should allocate to stocks. As retirement approaches, it may make sense to add more bonds to your overall allocation. These are the general rules of thumb, but it would be best to discuss your specifics with an advisor. (+)



Why Diversification Is Important


Risk cannot be eliminated when investing.


However, investment risks can be reduced through diversification. By having exposure to multiple companies and asset classes, our clients are able to have more confidence that if any one company or sector of the economy performs poorly, other investments in the portfolio can help sustain the investments.



Why You Need to Know Your Risk Profile


Knowing your risk profile is critical.


One of the most disastrous scenarios possible would be for someone to make a poor investment choice and sell out of their investments during the first market downturn in retirement.


It is extremely important to understand the level of risk that you are comfortable with and then to create an investment policy statement that guides portfolio decisions.



Working with a Fiduciary Financial Advisor


Is your financial advisor held to a legal standard of acting in your best interest in managing your investments and providing financial planning advice?


A registered investment advisor must manage investments as a fiduciary, and a CERTIFIED FINANCIAL PLANNER™ professional must give advice while acting as a fiduciary. We recommend working with a fiduciary whenever possible.



Working with a Fiduciary Financial Advisor

Your retirement plan should reflect your goals and vision for your life.

Tax Planning and Retirement


One of the largest expenses in retirement is taxes.


Why not work with an advisor that can help you avoid tipping the IRS? Roth conversion strategies, RMD strategies, charitable giving strategies, gain/loss realization strategies – all these and more should be on the table for discussion every year in retirement.



Estate Planning and Retirement


Are you planning to leave an inheritance?


Or do you want to plan on spending as much as possible while you are living? Should you have trusts in place to help manage your assets in the event that you are incapacitated? As with all financial planning topics, everything is related and it is important to think about your estate plan while putting your retirement plan together.



Estate Planning and Retirement

Common Questions about Financial Planning for Retirement:


How do I prepare my finances before retiring?


Create a budget based on your spending today.

Then imagine yourself as being retired. Based on what you are spending right now, how much do you want to be spending in retirement? Finding out the right number here is important. With it in mind, you can work with an advisor to see whether it is achievable.

What is the safest place to put my retirement money?


Asset allocation in retirement is extremely important.

You have to balance different risks. One of the risks is market risk. This is the risk of stocks decreasing in value due to market volatility. Inflation is another significant risk. If you are only considering market risk, it may seem “safer” to have all of your money in treasury bonds, but it is important to not forget the long-term risk of inflation, which stocks are well suited to overcome.

What are most retirement plans missing?


The one thing that I see as most impactful in a retirement plan is a sense of purpose.

It is important to go beyond the numbers and the money that makes retirement possible and ask: what is this money for? Retirement can be more than simply “not working.” I recommend sitting down with a blank page of paper and asking: “what is going to give me a sense of purpose in retirement.”



Work with a Financial Advisor Online or In Person


If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial. 360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 




About the Author

Michael Urch

Michael Urch is a Senior Wealth Manager at 360 Financial. Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning.


Prior to joining 360, he spent nine years honing his skills first at a Fortune 100 Financial Services Company and then at independent, planning-centric firms.


He graduated magna cum laude from Bethel University with a BA in economics and finance, as well as a minor in mathematics.


Michael lives in Golden Valley, Minnesota with his wife, Bri and their three children. When he is not working, he enjoys exploring parks and reading books as a family, hiking, and playing guitar. Schedule a Call with Michael Urch, Senior Wealth Manager


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Schedule a Call

At 360 Financial, our clients come first. You deserve personalized attention. You’ll be happier and more confident in your financial future when you have an advisor who always puts your needs and best interest first. Schedule a 15-minute introductory call with a 360 financial advisor to see how we can help with your retirement, succession, tax, and estate planning.


Financial Planning in Minnesota


If you need financial planning assistance and a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial. 360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch.


This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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