Yes, You Can Retire – It’s all about Planning
Retirement planning can be one of the most stressful concerns for most Americans. Recent studies show that the average American has just over $100,000 in retirement savings while many rely solely on Social Security. It doesn’t need to be that way. We can help you establish reasonable goals and expectations for your retirement years.
Some of the most common questions that persist in people’s minds are:
- Will I have enough monthly income to meet my monthly expenses?
- How do I pay for emergencies or other unplanned expenses?
- Will my retirement nest egg last throughout my lifetime?
- How do I fund Long-Term Care?
- What will my tax situation be?
Whether you have a $100,000 or multi-million dollar portfolio, we can help answer these questions with a personalized written plan. With an action plan that you can execute yourself or with our assistance (see Investment Management Services) you will be much better prepared with realistic goals and a strategy. The result is a peace of mind that you have a written Plan in place.
Pre-55 age group
If you are in this age group, you are in the accumulation phase of retirement planning. We can help you answer the above questions by running various scenarios and projections. We’ll look at potential retirement expenses and potential income from Social Security, pensions, retirement funds, and any other assets you may have.
This is a great service to look at different retirement ages, spending levels, portfolio returns, etc. and project your probability of success in each of the scenarios. We factor in life expectancy, risk tolerance, and inflation.
55+ age group
This is often called the de-accumulation phase of retirement planning. This is time to get serious about retirement planning with realistic goals, expectations and make any final adjustments needed to make your retirement plan a reality. We use the same scenario-based analysis, but with emphasis on the de-accumulation of assets.
Often overlooked is the most effective tax strategy for the spend-down of your assets in your retirement years. It makes a difference on what assets you spend first to minimize your tax liability. We can help you make the most tax-effective use of your retirement assets.
I personally feel so passionate about the de-accumulation phase of retirement planning, that I authored a publication entitled Engineering Your Retirement Plan. Written primarily for the technical-minded individual and focused on the 55+ age group, the primary theme is the de-accumulation stage of retirement planning.
Basically, the paper proposes our 3-prong strategy for retirement planning:
- Income Planning (to meet monthly expenses)
- Emergency short-term Planning
- Long-term Planning (for LTC and legacy planning)
The downloadable PDF is a deep dive for those that are interested in this topic. Also check out our publication on “Successful Aging” which is much less technical and focuses on the ‘soft’ aspects of retirement planning, many of which are non-financial. Simply click on the images below.
Complimentary Retirement Planning Resources
“Engineering Your Retirement Plan” is a very detailed guide to developing a solid retirement plan. Designed for the engineer or technically-minded individual or do-it-yourselfer. (55 +)
“Successful Aging” workbook for you and your spouse to work on together to help you determine your Retirement “Readiness.” (55 +)
Each of the above publications is available to you as complimentary “deeper dive” educational information. Continue reading below for a summary of the main areas we perform in our retirement planning service.
Retirement Planning for Income
Cash Flow Requirements
The first part of retirement planning includes an estimate of your monthly cash flow requirements necessary to meet the lifestyle you would like to have. We’ll analyze your current monthly spending plan and discuss any adjustments you foresee for your retirement needs including fixed expenses, discretionary spending, travel, and healthcare requirements. We’ll discuss debt pay-off scenarios and how that may impact your cash flow and long-term nest egg.
We will also analyze your expected income available from the various sources available to you such as Social Security, Pensions, or other fixed income sources.
For many people, Social Security is the major and sometimes the only component of their retirement plan. It may also be the only benefit you have that is a Lifetime Benefit. So getting it right is very important! Maximizing your Social Security benefit can make the difference between living fairly well or not.
Social Security planning areas we can help you with include:
- Claiming strategies to maximize your Social Security benefit
- Spousal benefits
- How benefits are taxed
- How divorce or widowhood affect your benefit
- How working or pension income affects your benefit
- How to apply for your Social Security benefit
If you are fortunate enough to have a pension, we can help you analyze the plethora of claiming options available to you. Such options have a life-long effect and are critical to your income planning for you and your spouse. Just one example is the Joint and Survivorship benefit may have multiple options and each option may have a ‘revert-to’ clause. We will help you sort through all of the nuances and determine the best claiming option for you.
Emergencies and Unplanned Expenses (short-term planning)
Inevitably, an emergency will arise or that unplanned vacation will just be too enticing to pass up. For these types of expenses, a second “bucket” of funds should be an integral part of your retirement plan. Unlike your income “bucket”, these funds can be invested with a short-term strategy, providing some liquidity for easy access.
These retirement assets may reside in an IRA, 401(k), or brokerage account. The difficulty is to know the most tax-efficient withdrawal strategy. That is something we can help you with!
Retirement Planning for the Long-Term
Claiming Medicare is no longer linked to claiming Social Security as it has its own claiming strategy and timing. If you don’t apply in a timely matter, a 10% penalty will be added to your yearly Part B premiums – forever! We can help you with your claiming strategy and any gap insurance requirements you may have. It is not wise to assume that one Medicare plan that is good for your neighbor is good for you. I have seen one spouse with a Medicare plus Gap plan as the best plan for her while her husband’s best option was a Medicare Advantage plan. It takes an expert to sort through the various options to determine what is best in your specific situation.
With the soaring cost of nursing home care now averaging well over $90,000 per year in Michigan, Long-Term Care (LTC) is a critical component of retirement planning and your risk management plan. We’ll help you determine if you can self-fund or if LTC insurance is a viable option. Some life insurance policies can also be a useful hybrid strategy.
Personalized Retirement Planning
If you are like most people, you have worked hard for the money you have and you want the best retirement that you can afford. Our job is to navigate the complexity of retirement planning for you, show you various retirement scenarios, and make recommendations so you can have the best lifestyle possible.
You will receive a written Plan with the various scenarios, recommendations, and an action plan for the implementation of the Plan. Similar to our financial planning services, your final Plan is available to you in a high-quality binder and also in electronic format for easy online access.
Give us a call for a complimentary “Get Acquainted” meeting. Or if you are ready to get started, check out our Financial Planning Process page and you can start gathering together your documentation.
Valuable Social Security Resources
- Social Security Retirement Planner – Estimate your benefits, apply for benefits and a host of other information
- Social Security Reform – Read up on various proposals to keep Social Security solvent
- Working While on Social Security – How Working Affects Your Benefits
To schedule your no obligation consultation Contact Us today.