Construction Retirement Planning

Retirement Planning Challenges in Construction

Retirement planning is pretty straightforward in most industries: you contribute to a 401k, your employer might match those contributions, and over time, the money grows. When you retire, you start withdrawing funds to cover your living expenses. But for those in construction, the path isn’t always so clear-cut. Income in construction can be unpredictable. Work can be seasonal, weather delays can mess with project timelines, and some months you might earn more than expected, while others can be slower. This inconsistency can make it tough to save regularly for retirement.

Then there’s the physical side of the job. Operating heavy machinery, working on scaffolding, or performing manual labor—each of these physically demanding tasks in construction places significant strain on your body over time, affecting everything from your joints to your overall endurance. As you get older, it might become harder to keep up with the physical demands, making a solid financial plan even more important for your future.

If you’re self-employed or run your own construction business, you also don’t have access to employer-sponsored plans like 401ks or pensions. That means you will need to take the initiative in setting up your own retirement savings, which can feel a bit overwhelming if you are not sure where to start. These unique challenges call for a more personalized approach to retirement planning, and we at Cooper Norman can help.

Retirement Solutions for Construction Professionals

At Cooper Norman, we have worked with construction professionals for years, helping them navigate the complex world of retirement planning. We understand that no two construction careers are the same, and we tailor our advice to meet your specific needs, goals, and financial situation.

Seasonal Income and How to Make It Work for You

If your construction work is subject to seasonal income fluctuations, you may wonder how you can continue saving consistently for retirement. You might have periods of time where you are working long hours and earning well, but during the off-season, income can slow down. This is where planning becomes crucial. We can help you set up a strategy that allows you to save during the busy months when income is higher, so you can continue contributing to your retirement savings even during slower periods. 

Building a cushion for off-seasons is a strategy that might aid in helping even out the income fluctuations you may be experiencing. By setting aside extra savings during busier months, you can smooth out the financial gaps during slower months. Cooper Norman can help you calculate how much you should save each month to ensure you maintain your retirement contributions year-round.

Tax-Efficient Retirement Accounts

When you are self-employed, taxes can be a significant consideration. The good news is that retirement accounts can help you reduce your tax burden while saving for the future. There are various retirement accounts available, such as:

• Traditional IRAs: Contributions to a traditional IRA may be tax-deductible, helping reduce your taxable income in the year you contribute. This can be especially beneficial if you find yourself in a higher tax bracket.
• Roth IRAs: While contributions to Roth IRAs are made with after-tax dollars, the benefit is that the withdrawals are tax-free in retirement. This is a great option if you are looking for long-term tax savings.
• Tax-Deferred Accounts: Retirement accounts like Solo 401ks or SEP IRAs allow your contributions to grow tax-deferred, meaning you won’t owe taxes on the money you contribute until you withdraw it in retirement.

The Transition into Retirement

If you’re looking to retire fully or gradually transition to part-time work, it is important to plan for a smooth shift. As a construction professional, your income will likely change as you step back from the physically demanding work. We offer a few different ways to help you develop a strategy to ensure you have a reliable income stream in retirement. This typically includes:

• Social Security Planning: We will help you understand when it makes sense to start claiming Social Security benefits to maximize your lifetime income.
• Investment Strategy: We will develop a plan to draw from your retirement accounts in a tax-efficient way, so you can ensure a steady stream of income when you no longer have the same earning power from working in construction.
• Gradual Retirement Plans: If you plan to scale back your hours, we will help create a gradual transition that ensures you’re financially prepared.

About Cooper Norman

We understand that retirement planning is not one-size-fits-all, especially in the construction industry. At Cooper Norman, we pride ourselves on offering customized solutions that cater to the unique challenges of your profession. From working on the job site to managing a construction business, we will partner with you to design a retirement plan that fits your unique goals and secures your financial future.

With years of experience in both accounting and retirement planning, we know how to navigate the ups and downs of the construction industry. Our goal is to ensure that, no matter what happens, you will be financially ready for the retirement you deserve. If you are ready to start planning for your future, contact us today. At Cooper Norman, we will help you lay the foundation for a secure, stress-free retirement.