Washington State Department of Retirement Systems (DRS) has some great resources to learn about the differences between Plan 2 and Plan 3.

We think it is essential to understand the differences, but to make a choice requires you to look at the rest of your financial life.

Social security is a significant income source in many financial plans. There are many issues to consider before filing to claim social security benefits on a spouse or ex-spouse. We have a flowchart to help you understand your options.

We get this question so often we wrote a blog post about three ways to help your kids buy a house. It looks at gifting the down, entering into a lease-purchase plan, or underwriting their mortgage. There a lot more ways to help when you understand their situation, but these are a couple of great options to start.

This can be a tough question. We analyze the survivor options as well as how the two pensions interact. Sometimes it may be advisable for spouses with dissimilar pensions to select different options. An expert can help you understand your situation and be comfortable with your ultimate decision.

There are some general rules of thumb for spending. Add up all of your investment and retirement assets and multiply by a percentage to set your spending budget. This percentage is your draw rate.

There have been many studies looking into what would be a safe draw rate. The oldest and most commonly quoted rate is 4%. For example, if you have $1,000,000 in retirement assets, the rule of thumb states you would be safe as long as you didn't spend more than $40,000 per year.

Many other factors affect the safety of this withdrawal. We use relatively sophisticated software to stress test portfolios. Through the use of Monte-Carlo simulations, we can help understand the effect of inflation, allocation, the sequence of withdrawals, etc.

Included below are links to several papers discussing the factors affecting a safe withdrawal rate.

• Determining Withdrawal Rates Using Historical Data
• Asset Valuations and Safe Portfolio Withdrawal Rates
• Optimal Withdrawal Strategy for Retirement-Income Portfolios
• Is Time Segmentation a Superior Strategy?

Collecting social security is a big decision. If you collect your retirement benefit as soon as it is available, you could be getting as low as 70% of your Full Retirement Benefit. If you wait even longer than your full retirement benefit, your social security will grow at approximately 8% per year, collecting deferred retirement credits. This delay could be worth hundreds of thousands of dollars of your life expectancy. Many people make this decision too quickly. We think a full analysis should be done to determine your optimal age to collect your social security. In many cases, one or both members of a couple should delay all the way to age 70.

As with many of these questions, the answer is complicated. It depends on the purpose of the insurance. Our rule of thumb for working members of a family tying to insure their income is 10X salary. Your situation may be very different and we encourage you to sit down with an advisor or insurance professional to understand the options.

We would direct you back up to the question, Is my money going to last? The most common rule of thumb is 4% of assets, but that only tells part of the picture. Looking at your full financial picture can help understand the risks to your spending plan. Sometimes people get so hung up on their spending rate that they discount the other resources and work longer than needed.

With historically low interest rates, this question is more relevant than ever. Paying off your mortgage may be a worthy financial goal, but it is not required before retirement. If you would like to discuss the impact of paying off your mortgage compared to making payments, we would encourage you to do a retirement cash flow review.