Retirement Planning has always been a major focus for Kelley Insurance & Financial – even before it became popular. We are involved in Retirement Planning in two ways, first, we work with businesses and organizations designing and installing Qualified Retirement Plans such as 401 (k), Profit Sharing, and Cash Balance plans. etc. In addition, we do a lot of Retirement Planning with our individual clients. What we have found is there is no one size fits all solutions to retirement planning. Each person’s situation, resources, goals, health, family dynamics, etc. all have to be taken into consideration before appropriate recommendations can be made. We start with asking questions and gathering the facts and information about what you want to do and develop a comprehensive plan and road map to get there. It is never too early or late to plan, of course, the earlier the better but even if you have put off retirement planning you will be better off taking action and doing whatever you still can versus nothing at all. We find is ‘people’s plans do not fail’ – but people fail to plan.
The Retirement Planning process stands on three legs – Social Security, Medicare, and Retirement Income Planning. Of course, the fear for many people is outliving their money – or having surprises while on a fixed income such as extraordinary Long Term Care expenses that have not been properly planned for. After all, our retirement years are supposed to be our ‘Golden Years – the ‘Happily Ever After Years’ we want to enjoy our final years and have the peace of mind to do so. Nothing will keep you awake at night more than the fear of running out of money during your lifetime, never mind leaving anything behind for our loved ones to make their lives a bit easier.
Unfortunately, retirement for Baby Boomers for the most part will not quite look like what their parents experienced. Most people these days do not retire from a job that they had for 30-40 years with a gold watch, a guaranteed cushy Pension, and health insurance paid for the rest of their and their spouse’s lifetime. Most people we work with these days have worked hard all their lives, built up savings and respectable 401 (k) plan balances – but have no idea how long they will live and need a guaranteed income. This is a serious situation that needs to be addressed. Guaranteed Retirement Income Planning is not the same as Retirement Income Guessing! You would not drive across Death Valley without first checking your gas gauge to be sure you have enough gas to get through it. The same applies to retirement planning – you would never want to begin the journey before carefully assessing your situation to be sure you can complete your journey.
We start the process by doing a projected Retirement Budget in order to have a monthly income target to budget for. Once we define the monthly income requirement we can run your numbers by using models and simulation to see how you are doing, and what needs to be changed if we are off course and get back on course again. Generally, retirement income comes from several sources these days since those Pensions are rare – Social Security and private wealth. Social Security is a form of Pension because it pays you a guaranteed monthly income that you can plan on as long as you live. Also like many Pension options, Social Security benefits are also available for a surviving Spouse. So the first task is to get your projected Personal Statement from the Social Security Administration, this can be accomplished online or by calling the Administration and requesting this information. Once we have the information needed we will work with you regarding when to take Social Security and how to optimize your Social Security benefits. Retirement Income planning looks at all your potential sources of income including IRAs, employer retirement plans, income-producing assets such as real estate, after-tax savings, and brokerage accounts in a holistic way in order to determine the most effective way to use your assets and fund your retirement.
Most people have a shortfall of their monthly budget target with Social Security Benefits alone and therefore have to look to their Retirement plan assets to produce additional needed income. In addition at age 70 1/2, the IRS requires us to take Required Minimum Distributions (RMDs) from all of our retirement plan balances. Hopefully, any shortfall of the monthly budget target can be made up with income produced from retirement plan assets. If not other options would need to be reviewed to make up for the shortage, such as savings, brokerage accounts, and other income-producing assets. Once you have achieved or exceeded your target you are on your way to living your happily ever after. The entire process will expose exactly where you are on the road to retirement and provide a clear path as to how to stay on course and make adjustments that would improve your outcome.
We will also inform you about your options under Medicare, how it works and when is the best time for you to enroll. Many of our clients are still working at age 65 these days and need to analyze if staying on their employer’s health plan or enrolling in Medicare is best. Please review the Medicare section of our website for more information on Medicare. Having good health insurance is a hedge against the costs of healthcare care in our later years.
In order to be as certain as possible that our plan is not derailed – you need to take as much risk off the table as possible! These concerns are;
Again, the most important thing in ‘Retirement Planning’ is TIME! You can never replace what time does to compound your retirement plan account balances. You can invest more money, hope for a higher return but time is the magical ingredient to a successful retirement plan. So start a ‘Plan of Action’ NOW and call our office today to see how you are doing and get a no-obligation Retirement Planning check up to see how you are doing!