Retirement Planning in San Antonio

It's never too early to start planning for your future.

With a population exceeding 1.5 million, San Antonio ranks as the seventh largest city in the United States and second largest in Texas. Retirees can look forward to a full range of activities here, from culture to sports to entertainment. The climate is a mix of humid subtropical in the eastern portion of the city and semi-arid in the west, so you can expect hot long summers and cool to mild winters. The median home cost is $175,400, compared to the U.S. median of $232,200. All in all, San Antonio is a terrific place to retire.

At PAX Financial Group, we work with many locals and out-of-towners on their retirement planning needs. Retirement planning is different in San Antonio than in other areas. There is a different cost of living, different concerns, and different estate planning and tax planning regulations. With 100 years of combined experience in retirement planning, investment management, financial advice and insurance, it’s safe to say we’ve helped hundreds of individuals and families pivot to this next phase in life. 

Below are some important facts you should know about retirement planning and your San Antonio retirement.

Chapter 1

Getting Started

It’s easy to overlook retirement planning when you are in your 20s and early 30s. This is shame, because the sooner you start saving for your retirement, the more you can benefit from long-term growth trends and the compounding of earnings. 

If you are a young parent, saving for retirement and college can be a daunting challenge at this phase in life. Often, parents are too willing to sacrifice their own retirement plans to fund college for their children. However, while the impulse is understandable, it’s probably the wrong answer.

Consider the trade-off: Are you willing to saddle your children with taking care of you in your old age because you didn’t save enough for retirement? Saving for your children’s education is possible, but make sure your own financial future comes first! Discuss your situation, concerns and needs with a financial advisor who can share ways to best juggle these financial goals. 

Retirement planning can be easier on you in the long-run when you start early, so enroll in an employee retirement plan at your earliest opportunity. Your first goal is to contribute enough pre-tax income to earn 100 percent of the matching funds offered by an employer. If you are self-employed or a business owner, consider a Solo 401(k) and fund it up to the employee limit if you can. You can also open a Traditional or Roth IRA for additional retirement savings. In your early years, you have plenty of time to recover from bear markets, so discuss your risk tolerance and asset allocation with a financial advisor who can help you better prepare for a more financially secure future. 

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Chapter 2

Mid-Career

During your mid-career, you may experience sizeable income growth. Therefore, it’s a good time to consider tax-advantaged investments beyond your 401(k) and IRA. It’s important to have adequate insurance coverage at this point in your life, as well as solid retirement plans and a strategy to pay off debt. 

Make sure you’re taking advantage of any employee-matching programs and executive bonus plans. This is also a great time to establish a relationship with a financial advisor you trust. 

Having a long-term relationship with your financial advisor can be a huge benefit to you. Sharing any major life changes with a financial advisor you trust can allow you to modify your plan while keeping your ultimate goals intact. No one wants to suffer from retirement FOMO. If you’re planning to retire in San Antonio, discussing your plans with a San Antonio financial advisor can be an added benefit. 

 

Chapter 3

Pre-Retiree

As you start to near retirement, it’s important to make serious plans about your post-retirement lifestyle. Working with your financial advisor, evaluate all of your assets and liabilities. Will you want to keep your home or perhaps relocate and/or downsize? Do you have valuable assets you no longer use, like a boat or second home? Decide what you want to keep and liquidate the rest. 

Ten or so years before retirement is also a good time to develop your post-retirement budget based on your lifestyle choices. A rule of thumb is that you’ll need 70 percent of your pre-retirement income after you retire, but you may need more – or less. Tally your income sources after you stop working, including Social Security, any pension funds and any income coming from your retirement accounts, annuities and other sources. 

If you haven’t done so yet, this is also a good time to consider long-term-care insurance, and make sure you have the best health insurance you can afford. You’ll likely want to start reducing your portfolio risk by slowly transitioning from stocks to fixed-income securities. Make sure you discuss your plans with a financial advisor who offers full financial services for all your concerns.

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Chapter 4

Retiree

As a retiree, your primary focus is making sure you don’t outlive your income. Hopefully, you’ve taken the right steps to ensure this doesn’t happen. If possible, revisit the age you will start claiming Social Security. The longer you wait, the more lifetime income you’ll receive. 

Withdrawals from your retirement accounts will also become an issue. In 2020, the age at which Required Minimum Distributions (RMDs) from your traditional 401(k) and IRA are required is 72. Once again, the longer you postpone withdrawals, the longer your money can grow tax-deferred. If you have a Roth IRA, there are no RMDs and all withdrawals are tax-deferred, if you follow the rules. 

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Chapter 5

Sharing Your Plans

When you are retired, it’s important to talk with your close family members about important financial subjects, including your net worth, relocation plans, providing for long-term care and your plans for bequeathing your wealth. Your retirement plans can affect your family in many ways. That’s why it’s important for you to communicate your wishes so that your family members understand any adjustments they might need to make to their own plans.

Most people spend a lifetime accumulating their wealth. Your family should understand your assets and liabilities, including any plans you have to redeploy your net worth. You may want to liquidate certain assets, pay down liabilities or take other steps that might impact your family. Do your plans have tax or debt implications that can affect family members? Discuss your concerns and the dream retirement you’re hoping to reach with a financial advisor.

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Chapter 6

What Ifs

It’s wise to stress-test your retirement plans before pivoting into this phase of life so you understand what can happen in different situations. A financial advisor can help you look at three scenarios: Worst-case, best-case and most-likely case. Use these to account for various what-ifs in life, such as a sudden loss of asset value, a major life change or the death of a spouse. Your financial advisor should structure these scenarios with you so that you can hope for the best and prepare for the worst.

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Chapter 7

Special Considerations

Retirement planning is not a one-size-fits-all equation. Everyone has different family structures, different concerns and different goals. 

For example, you or your spouse may have chronic health challenges that will require special planning. Perhaps you have an adult child that has special needs. Do you plan to care for adult children or aging parents? 

There are strategies to prepare for out-of-the-ordinary circumstances. You can set up trusts that specify the care of a special needs beneficiary or that skip your children to bequeath funds to your grandchildren. 

Of course, small business owners have their own set of issues, needs and concerns. 

Once again, a financial advisor can be an invaluable resource to help you handle any of these special considerations.

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Chapter 8

Red Flags

When it comes to retirement planning, it’s also important to watch for red flags. Is your financial advisor making promises that aren’t being delivered? Have you talked with your financial advisor since your initial planning meeting? Have you communicated any recent changes in your life? Any new goals? Have you had a retirement checkup recently?

Not all financial advisors – and not all retirement planning – is the same. If you’re ready for a second opinion, contact PAX Financial Group. With 100 years of combined experience helping people pivot into retirement, we can strategize your options and establish a plan that works for you. It’s never too early to start planning for retirement. The first, and more crucial step, is getting the conversation started. 

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This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.