What to Expect in a Retirement Evaluation

Continue to read to learn about what happens in a Retirement  Evaluation

The During a recent tax preparation appointment (click here to sign up for a tax appointment) my client told me she was turning 62 and had some questions regarding social security.  I answered some basic questions for her regarding collecting benefits while working.  She then opened up about her concerns about her ability to retire at 65 once she got on Medicare.  The stock market had her worried and she wasn’t sure if she was saving enough.  We set a date for a more extensive appointment after tax season for what we call a Retirement Evaluation.
Here’s what you can expect during a retirement evaluation appointment.
The initial appointment is a relaxed conversation where I gather as much information as I can about your situation.  The first thing I will ask is, “What is your desired retirement age?”  Interestingly, most people do not necessarily have a desired age in mind, which is just fine.  Ultimately, my hope is that the income plan I construct for you will empower you to choose to work on your terms.  Another thing I will ask about is your family and beneficiaries.  All too often, I find beneficiary designations to be incomplete which could make wealth transfer more difficult.  Fortunately, it’s an easy fix.  
Building the retirement income plan
Once I have gathered the information I need, I begin to build your retirement income plan.  My goal is to build a long-term plan that is sustainable and built in the most tax-efficient manner possible.  I start by looking at your guaranteed income that we know about such as social security, a pension, and maybe rental income or annuity payments.  We then figure out how much monthly income you are going to need in retirement.  We can really hone that number in by using my expense organizer.  This process will identify if there is an income surplus or deficit/gap.  If there is a deficit, we’ll turn to the retirement assets to generate supplemental income.  It’s rare but sometimes I meet a person who hasn’t saved enough money yet.  In that case I will work the math backwards and determine saving goals so they can retire at a certain age.  
What makes supplemental income sustainable?
We rely on basic mathematics to determine the sustainability of the plan.  What percent withdrawal are we taking and do we have a better than average chance of putting that percentage back in?  It’s also important that we manage stock market risk by diversifying by asset and portfolio management as well as integrating products with guarantees against stock market losses.  Substantial stock market losses while taking income can be a very bad thing.  Running out of money is not an option.
Is the plan tax-efficient?
Here’s where retirement planning becomes challenging.  How do you generate income while minimizing or eliminating taxes?  We have found the Roth IRA to be an amazing tool to achieve that goal.  Click here to watch a short video about Roth IRA Conversions.  Another very important step in this process is reducing stock market risk because we don’t have time on our side like we used to.  Rolling your 401(k) into an IRA can help do that while opening the opportunity for Roth conversions.  Click here to watch a short video about rolling your 401(k) to an IRA.
What’s the next step?
After the initial appointment and construction of the plan, we’ll get together for a second or even third appointment to review everything and put the plan in place.  For some people, accepting the need to make a change is hard.  We have found that a logical and organized game plan from start to finish can alleviate most fears.  Additionally, this is only the beginning and not the end.  My income plan is a living breathing entity that we will consistently review together.
Sign up for a no-cost Retirement Evaluation by clicking this link or calling (480) 428-8005.  You can also click this link if you’re ready for us to do your taxes. 

Written by Marc Montini, licensed fiduciary, financial advisor and proud independent advisor.
Montini & Co Tax Advisory Group

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