When folks come to in see The Retirement Guys, we always ask what their biggest concerns are. Nine times out of ten the top concern is “I don’t want to outlive my money. I want to have enough to live comfortably the rest of my life.” Isn’t that part of what we are all working for? Security, and the idea of not worrying too much about the future in order to have better quality of life today?
When you are in, or approaching, retirement, it becomes a whole new ball game. I (Mark) am a big sports fan, so I tend to relate to concepts from a sports point of view. When you are competing in a sports contest it is vital to understand what the rules are to increase the likelihood of winning the game. Retirement is “a whole new ballgame” in that it comes with a new set of rules and guidelines. The key to success is knowing the new rules working them to your advantage.
That’s why Retirement Guys have created what we call The Retirement Game Plan. What is it? A process that can guide you through retirement planning. A set of steps that can help you understand the new rules, draw your attention to decisions that you should think about, and provide you action steps to have a better chance at a happy and relaxing retirement.
The Retirement Game Plan consists of three main phases:
- Manage Your Money
- Preserve Your Assets
- Efficiently Plan Your Estate
Manage Your Money
Obviously, we all need money to live. If you are no longer earning money, you need to make sure that we have saved enough to live comfortably in retirement. The key here is placing money into different categories based upon time frames, risk tolerance and the current need for income. Using tools like circuit breakers to help limit declines in account values should the stock market drop drastically. It is important that you have enough money and it will be there when you need it. You may want to ask yourself these questions: “Where is my income going to come from? Am I prepared for the next stock market crash? How will this affect my financial security?”
Preserve Your Assets
Now that we have your money placed in various categories, what could severely damage your nest egg? A couple things come to mind and they both relate to health. One is the lack of the understanding of health care costs during retirement. Most people don’t know that Medicare is mandatory and it is not free. In addition to the cost of Medicare, there is the cost of what Medicare does not pay for, like deductibles, co-pays, etc. It can be a rude awakening when you realize how much will come out of your pocket to pay for health care. The second very real possibility, is an unexpected long-term health care crisis. When you are no longer able to care for yourself, who will do it and who will pay for it? If you are paying for it, the possibility of running out of money becomes much more likely and it can happen very quickly if you don’t plan ahead.
Efficiently Plan Your Estate
This is an area that typically benefits someone else. Typically your children or whoever you choose to leave your estate to. If you don’t end up needing all of your money and other assets, the goal is to leave it to your loved ones instead of lawyers or Uncle Sam. But pause for a second and ask yourself this question: If you are married and one of you passes away unexpectedly, how much income will you lose? Typically expenses don’t really go down that much when the first spouse dies. The least amount of lost income is typically the lower of the two Social Security checks. Do the math. If it is $1,000/month, 1,000 times 12 equals $12,000 per year. Now multiply that by how many years you plan to live. It can be a huge chunk of change. We like to plan so the surviving spouse will not lose ANY income. When it comes to passing on your estate later, what kind of plan to do depends on how strong your desire is to maximize what gets passed on. You might need to decide between a will or some kind of trust.
The key is taking action. If you don’t want to outlive your money, take some action steps right away.
If you would like give us a complimentary visit to see how The Retirement Game Plan applies to your unique situation, send us a message HERE.