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.
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
SECTOR GOALS
- Understand your Social Security options
- Create your online Social Security Account
- Decide on a start date
- Estimate your monthly paycheck
SECTOR GOALS
- Understand your Income options
- Calculate your expenses & income needs
- Maximize your income producing assets
- Formulate a plan to not outlive your assets
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
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
SECTOR GOALS
- Evaluate your estate
- Understand all of your legacy options
- Decide on a legacy plan
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.
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.
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.
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.
Closing
This entire program was designed to create a superior user experience for consumers, which we do by introducing a revolutionary idea: to educate and empower the consumer, so that they not only understand their current financial situation, but also understand ways to improve it. We can now do this through our digital-assisted educational program called Sector Planning.
We have created the optimum framework that allows consumers to learn from the comfort of their own home. This educational program is not only ENDORSED by the Senior Benefits Foundation, but it was also in FORBES Magazine. If you would like to read the article, you can do so here: Forbes Sector Planning Workshop. You will find is that this entire program is Pro-Consumer, which puts both our educational counselors and consumer on the same side of the table working together to help you design your bulletproof retirement plan.
Our goal is for this program to be the MOST ENLIGHTENING Educational program ever created, which is where you come in. After completing this course, PLEASE send us your comments as to where we fell short. We are continuously working on improvements to the Sector Planning Educational Workshop through your feedback as we strive to be the best educational program available to consumers.