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10 Steps to Financial Success

If you are approaching retirement or are already retired, the financial decisions you make now may be even more critical than those made when your working years were still ahead.

The ongoing guidance of a Legend Group financial advisor can mean the difference between achieving your lifestyle goals and falling short. Your Legend Advisor can guide you through the following steps in the retirement income planning process, and help you make the most of your retirement income resources.
10 Steps to Financial Success:
1. Calculate Your Retirement Needs (learn more)
Retirement experts estimate that you will want to have between 70% and 80% of your pre-retirement income to support a comparable lifestyle.1 This means that if your final annual salary was $60,000, you’ll want to generate about $40,000 the first year. But keep in mind, this amount may increase each year as the cost of living rises due to inflation. Over the course of a 25 year retirement, you may require more than $1,000,000 in total income to maintain your standard of living.
The following factors may influence your income needs in retirement:
  • lifestyle choices
  • lifespan
  • withdrawal rate
  • inflation
  • rising health and long-term care costs
  • taxes
  • estate objectives
  • market volatility
  • investment performance
Your Legend Advisor can work with you to evaluate your retirement income needs and help you understand the factors that can influence them.
1Outlook. A Publication of the South Dakota Retirement System. Number 3, November, 2001, p.1.

Legend Equities Corporation and its affiliates do not provide tax or estate planning information or advice.
2. Identify Your Income Sources (learn more)
Understanding the sources of your retirement income is important in developing an accurate picture of your financial situation. You'll want to determine what each source is worth, and how your entire pool of assets can best be tapped to meet your income and estate goals.
Your resources may include:
Your Legend Advisor can provide you with a worksheet to assist you in determining your sources of retirement income, and help you devise an income generation strategy.

Legend Equities Corporation and its affiliates do not provide estate planning, legal or tax information or advice.
3. Determine Your Expenses (learn more)
It's also wise to review all your anticipated expenses to get a clear idea of what your retirement will actually cost. As you work to design your budget, consider how your lifestyle might change over the next 25 to 30 years.

Once you are retired, you may find that some of your expenses will decrease:
  • work-related expenses
  • home mortgage expenses
  • financial support to children
  • certain daily expenses (due to senior citizen discounts)
While other expenses may increase:
  • health care costs
  • travel and leisure
  • utility bills and home maintenance
  • expenses associated with a second home
  • financial support to an elderly parent
Your Legend Advisor can provide you with a worksheet to help you estimate your expenses during retirement.
4. Consider Your Estate Goals (learn more)
Some people seek to maximize the size of their estates, or to gift assets to family, friends, charities or causes. Others plan to spend all their assets during their lifetimes. Your estate objectives and the resulting tax implications will shape your financial strategy throughout retirement.

Consider the following elements of a well-crafted estate plan:
  • tactics for minimizing estate taxes
  • wills and trusts
  • beneficiary designations
  • powers of attorney and health care proxies
  • account access rights
  • transfer on death registrations
  • keeping legal documents up-to-date
  • legacy planning with a stretch IRA
  • gifting assets/college savings plans
  • life insurance for final expenses
Your Legend Advisor can help you define your estate goals and understand how they may influence your financial strategy.
Legend Equities Corporation and its affiliates do not provide estate planning, tax, or legal information or advice.
5. Review Your Insurance Needs (learn more)
Once you retire, you’ll want to review all your insurance policies to ensure that your coverage is appropriate for your new lifestyle. Often your insurance needs will change as you age. For instance, your life insurance policy may need to be updated, and health and long-term care insurance may be necessary to bridge the gaps in Medicare coverage and free up retirement savings for other goals.

Consider the following:
Your Legend Advisor can help you review your insurance needs as a component of your overall retirement investment and income plan.
6. Gain Control of Your Assets (learn more)
If you've participated in an employer-sponsored retirement plan, generally you will have three alternatives for the money you've accumulated:
  • keep the assets in your employer's plan
  • request a lump sum payment1
  • transfer the assets directly to a rollover IRA or other qualified retirement account
The Benefits of Consolidation
If you have retirement plan assets in several different accounts, rolling these funds into a single account can make sense. Rollover IRAs are a possible consolidation vehicle because they allow you to combine money from employer-sponsored plans as well as other existing IRAs. You may also be able to consolidate employer plan assets of the same type into a single account. Combining your retirement plan assets can:
  • reduce costs and paperwork
  • help you manage your savings more efficiently
Your Legend Advisor can provide you with a worksheet to help you estimate your expenses during retirement.
1Distributions from a traditional retirement account are subject to ordinary income taxes in the year distributed. Distributions prior to age 59½ may incur an additional 10% penalty.
7. Minimize Taxes (learn more)
Taxes can erode your annual investment returns and subsequently, your income. By designing and utilizing tax-efficient strategies, you may be able to keep more of what you own.

Consider the following:
  • implementing tax-efficient investment and income strategies
  • withdrawing from taxable accounts first
  • prolonging the tax-deferred status of retirement assets
  • the tax implications of working in retirement estate tax issues
Your Legend Advisor can provide you with a worksheet to help you estimate your expenses during retirement.
Distributions from a traditional retirement account are subject to ordinary income taxes in the year distributed. Distributions prior to age 59½ may incur an additional 10% penalty.

Legend Equities Corporation and its affiliates do not provide estate planning, tax, or legal information or advice.
8. Determine Your Profile as an Investor (learn more)
Your Legend Advisor will work with you to develop an understanding of your profile as an investor. Once completed, this profile can serve as the basis for creating and maintaining a suitable investment strategy.

Your Advisor can help you assess your:
  • investment objectives
  • time horizon
  • income needs
  • risk tolerance
  • personal financial situation
Contact your Legend Advisor for assistance in determining your financial objectives, expectations and tolerance for risk.
9. Create an Investment Plan (learn more)
Keeping your assets working for you throughout retirement can be a major factor in your ultimate success.

Your investment plan should provide:
  • income to meet living expenses
  • growth to hedge against inflation
  • strategies to reduce risk and preserve wealth
Investment Options
While some retirees choose conservative fixed income investments to minimize market risk, this strategy is not ideal for everyone because it may not provide long-term growth potential or a hedge against the impact of inflation and taxes on income. Historically, equities have been utilized in an effort to outpace inflation and increase wealth. Of course, past performance is not indicative of future results. Many retirees find that including both fixed income securities and equities in a diversified1 portfolio reflecting their goals and risk tolerance may be a more suitable option.

Your investments may include:
  • cash equivalents
  • bonds
  • stocks
  • mutual funds
  • annuities
Managing Risk
Reducing risk is often essential to investment success. While risk is a natural part of the investing journey that cannot be eliminated, several techniques can be employed to manage risk:
Your Legend Advisor can help you evaluate and select the investment options that may be best suited to your needs and suggest strategies for managing risk.
1Diversification does not assure a profit or protect against market loss.
10. Develop a Retirement Income Plan (learn more)
During retirement, the consistency of a regular paycheck in a specific amount is replaced by an income stream that is generated from various sources. Your distribution strategy should satisfy specific financial needs, such as:
  • providing an income throughout your retirement years
  • providing for the income needs of a spouse
  • maintaining the tax-deferred status of your retirement savings as long as possible
  • minimizing taxes and avoiding penalties
  • leaving a legacy
Distribution Options1
Several payout options are available for your retirement funds:
  • annuitization (a variable annuity, or a fixed annuity that provides set payments for life)
  • periodic or systematic withdrawals with amounts and frequencies based on your retirement income needs
  • partial distributions (including the option to distribute to a money market account with check writing privileges)
Your Withdrawal Strategy
The method you use to turn your assets into retirement income will depend on a variety of factors including your age, your goals and how your funds are invested. In devising a suitable withdrawal strategy, consider the following:
Your Legend Advisor can help you complete a worksheet to see if your retirement income may be adequate to meet your expenses. In addition, he or she can work with you to create, implement and maintain an investment and income strategy designed to reflect your needs.
Distributions from a traditional retirement account are subject to ordinary income taxes in the year distributed. Distributions prior to age 59½ may incur an additional 10% penalty.

Legend Equities Corporation and its affiliates do not provide estate planning, legal or tax information or advice.
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