Retirement Planning

Our process for Retirement Planning starts with taking inventory of four areas: Budget, Fixed Income, Portfolio Assets, and Legacy Assets in order to generate your Retirement Profile.

Let’s take a look at each:

Budget

This is simply estimating what to expect in retirement. To help clients we start with what their current budget is. We then eliminate those expenses that won’t be around in retirement, for example mortgage payments, college costs, payroll taxes etc. keeping in mind these are different for each client. Then we add in the costs that increase in retirement, for example health care costs. Health care is one of the largest costs in retirement and is growing at about a 6% rate per year. All our retirement plans include a Health Care Cost in Retirement Analysis. If we are using today’s dollars in the estimate, we will then add an inflation assumption up to and through your retirement.

Fixed Income

Once we have an idea of your retirement expenses, we will then match them to the amount of fixed guaranteed income you will receive in retirement. This would include for most people Pensions from employment and Social Security. In some cases, there are other forms of fixed income that could be taken into consideration.

An ideal retirement position would be to have enough fixed guaranteed income to cover all fixed retirement expenses leaving other assets available for the items we want to do in retirement like travel, fund our grandchildren’s education, and donate to charity. This would mean we must maximize the fixed income by reviewing the various Pension options that may be available. The same goes for Social Security,  the most beneficial way to receive it must be evaluated. If you are married which option will maximize both your Social Security benefits and those of your spouse? Believe it or not, this simple decision if not chosen wisely could cost you both several hundred thousand dollars!

Your Retirement Profile includes a Social Security Analysis illustrating the various options based on your situation so you or you and your spouse can make an informed decision.

Portfolio Assets

Your Retirement Profile will include how to best position your investment portfolio. If you do not have enough Fixed Income to cover your fixed expenses, then some or all of your portfolio should be structured to provide income to fund the shortfall. In order to properly allocate the portfolio, we would rely on our Investment Management process. Any amount not needed for income would be managed with its ultimate purpose in mind. Please refer to the Investment Management section of this website for further detail.

Legacy Assets

These are assets that you want to leave behind usually for a specific purpose. Whether it is a simple inheritance, funding for a special needs child or grandchild, charitable cause, or something else proper planning is a must. Some of the more important considerations would be how the assets should be distributed? All at once or over time? What are the tax implications and how can they be minimized? Do you want to control how the assets are used even after you are gone? Just to name a few.

For more information please refer to the Estate Planning & Administration, and Tax Mitigation Strategies of our website.

Retirement Profile

This document will provide you with the confidence for a successful retirement. Whether retirement is 20 years away or around the corner you will have a clear-cut plan of how to enjoy it without worrying about money or running out of it. Your Retirement Profile will incorporate all the information from Budget, Fixed Income, Portfolio Assets, and Legacy Assets and match it to your goals, wants, and needs to provide straightforward direction to keep your retirement on track. Together we will review your Retirement Profile on a regular basis to make any necessary adjustments and keep you in a happy and fulfilling retirement.