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Every retirement plan is different and requires a customized approach, but there are six main sectors that everyone has to deal with. Breaking retirement down into six digestible pieces helps to make sure every base is covered and allows people to move forward at the pace they are comfortable with. The six sectors are Medicare, Social Security, Income, Risk Tolerance, Tax, and Legacy.

Medicare

SECTOR GOALS

Understand your Medicare options
Learn how to select a Medicare agent
Create YOUR Medicare account
Select your benefits or enrollment dates
Estimate your monthly medical costs

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Social Security

SECTOR GOALS

Understand your Social Security options
Create your online Social Security Account
Decide on a start date
Estimate your monthly paycheck

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Income

SECTOR GOALS

Understand your Income options
Calculate your expenses & income needs
Maximize your income producing assets
Formulate a plan to not outlive your assets

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Risk Tolerance

SECTOR GOALS

Know the positive & negative historical
performance
Decide what percentage of your assets you
want exposed to risk
Evaluate your future purchases for timing,
so your money is available when you need it

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Tax

SECTOR GOALS

Understand tax saving strategies:
- Opportunity zones | Self-directed IRA’s | Tax loss harvesting | RMD preparation | Roth conversions
Create a plan that your CPA’s approves
Estimate your tax savings

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Legacy

SECTOR GOALS

Evaluate your estate
Understand all of your legacy options
Decide on a legacy plan

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Medicare

There are several things you need to do to financially prepare for retirement. You need to sort out your sources of income, your Social Security benefits, and the amount of risk in your portfolio. But before you can make accurate and useful decisions about any of those areas, you need to know what your medical expenses related to Medicare are going to be. We start with this expense because without knowing it, we cannot accurately estimate your income need, determine when to file for Social Security benefits, or balance your portfolio. All those decisions are predicated on what your Medicare plan is going to cost you. Medicare expenses can vary drastically between options, which affects what your monthly costs will be. Once we have a clear picture of what those costs will be, we can start making decisions about your Social Security benefits and income plan.

Social Security

You can think of your income from Social Security, like a pension. It is guaranteed, you don’t need to keep working or investing to receive it, and it will be there for the rest of your life. You have already done all the work to secure this benefit, and it is not your responsibility to maintain it. Knowing the amount of your Social Security benefits also allows us to determine how much of your income needs it doesn’t cover. This number is just as important as the amount of your benefits and will help us make decisions about the following four sectors. By taking the time to maximize your Social Security benefits, you can take pressure off the rest of your assets. Every dollar you get from Social Security is one less dollar you have to generate from your assets in order to fund your lifestyle.

Income

Securing your income is the bread and butter of retirement planning. It is your main goal. We start by estimating your total monthly expenses, including your projected Medicare costs. After adding guaranteed income, like your Social Security benefits, a pension if you have one, and any other sources, we see what the gap between what you have and what you need is. This difference is called the income gap, and it represents the amount of money you need to generate from your own assets. There are several strategies for securing income. It is important to remember that financial products and strategies are not inherently good or bad. They may or may not be relevant or helpful to your situation, however. Determining which ones to use requires understanding your needs and understanding what different products and strategies can offer you. If they help you efficiently achieve your goal, they are worth your consideration.

Risk Tolerance

We focus on risk and timing so you can make the highest return possible without jeopardizing your principal. It is important that you consider risk and timing together, instead of separately. We will elaborate more on this in the program. Once you have created a strategy to provide a sustainable income for the rest of your life, you can take a look at potential growth options for any assets you have left. This is also the part of financial planning that deals with your tolerance for risk. The assets that are not earmarked for income are now free to be invested and aimed at other goals.

Tax

When you have earmarked your money for Medicare costs and income, it is time to maximize the staying power of your assets with a tax strategy. Taxation can affect all aspects of your retirement plan, including your Social Security benefits. Along with market risk, taxation is the next biggest threat to your retirement nest egg. These two threats have the potential to deplete retirement funds the fastest. Tax planning is more than just filing your taxes on time each year. Instead of recording the past, you need to proactively look to the future. When you know what kinds of potential tax liabilities and consequences result tomorrow from your choices today, you can start creating a tax-efficient source of income that maximizes your net income and preserves your assets. You will always need to contend with taxes; if you can reduce your tax burden each year, your plan will be that much stronger. A tax plan has to be a flexible, moving strategy that takes all your other financial positions and decisions into account. Seeking advice throughout your life on your tax plan will ensure that everything is operating as efficiently as possible.

Legacy

Legacy planning helps preserve and extend your assets and your values after you pass away. It also keeps your financial plan operating smoothly and toward a defined goal while you are alive. Your estate plan is part of your legacy plan, which includes all the ways that you prepare for the future of your loved ones and beneficiaries. Among other things, you can focus on maximizing your legacy with an appropriate life insurance plan and transferring it correctly by making the proper beneficiary designations. You can think of your estate plan as part of your overall legacy plan and give it the same thorough consideration and attention it deserves. Everyone’s financial situation is different, and everyone’s retirement will be different as well. These six sectors aren’t meant to be a one-size-fits-all solution for retirement planning. They are starting points that can help you get organized and prepared for the planning ahead. Your needs, goals and timeline are all unique to you, and your plan should reflect that uniqueness.