Retirement Income Planning

Are you sure you won’t outlive your income in retirement? No two careers follow the same trajectory. Following that, no two retirements are quite the same, either. Everyone will have different goals, needs, and strategies.

We take the time to listen to your needs and formulate a plan to take you from the accumulation phase of your life to the distribution phase. According to one study, 43% of people in America aren’t afraid of being bored, unable to travel, or dying in retirement—their #1 fear is outliving their money.¹ That number jumps to 60% when you look at Baby Boomers. These fears, according to the data, are justified: People in their 50s have only saved an average of $117,000 for retirement. Experts say a “healthy” retirement savings account would have something like six times a person’s current salary.¹ This disparity, to say the least, is striking.

Whatever your plan, and whatever your retirement goals, our firm could help you put together a retirement income plan. We’re ready to listen; we’re ready to lend our experience.

¹ Catey Hill, “Older People Fear This More than Death,” MarketWatch, accessed July 24, 2019, https://www.marketwatch.com/story/older-people-fear-this-more-than-death-2016-07-18.

Long-Term Care

Are you prepared for every eventuality? Not everyone has savings to cover the cost of nursing-home care, home-health care, or personal or adult care for people ages 65 and up. Some people fear facing a debilitating or chronic condition in retirement that depletes their savings and affects their legacy plans for their family.

One option these people might have is “long-term care” insurance. Such policies offer more flexibility and options than public state or federal programs in the U.S.¹ People who have long-term care insurance, sometimes known as LTC insurance, have options when it comes to covering the high cost of this kind of facilities.

Nursing facilities charge, on average, $150 to $300 a day, or $80,000 a year.¹ Three visits per week from custodial or home care visits can run more than $90,000 a year.¹ Many LTC policies offer a dollar-per-day arrangement for time spent in a nursing facility (or for in-home visits). Professionals often suggest shopping for LTC insurance between the ages of 45 and 55. This is a strategy to attempt to defray those costs in retirement.

There may be tax deductible elements, business deductions, or other benefits to having LTC insurance as part of your comprehensive retirement income plan. You might not have to rely on your children for money, for example.

¹ Julia Kagan, “Long-Term Care (LTC) Insurance,” Investopedia, accessed March 9, 2020, https://www.investopedia.com/terms/l/ltcinsurance.asp.

Insurance Strategies

Are you protecting the things that matter most to you? Insurance is a term people often use but not one they always understand. For customers, insurance companies offer a contract (known as a policy) whereby an individual or corporation receives a promise of reimbursement against possible losses in exchange for a premium. Insurance companies pool risk this way; that means that, in the event an insurance company has to pay out a claim, the company is still bringing in revenue.¹

There are several types of insurance. Some of them—like life insurance—are straightforward. Yet, even in life insurance, there are many things to consider, like term vs. whole life. Other types of insurance, such as fixed indexed annuity contracts, might require even more explanation. You can buy insurance for your car, home, boat, or business. You can also buy insurance for things like needing long-term care in retirement, liability insurance for your business, disability insurance for your profession, Medicare gap coverage, Medicare Advantage, Part D and supplemental policies.

People often talk about insurance as “protection,” but it’s really a form of risk mitigation. It ensures that, no matter what twists and turns come with life, clients don’t face their risks flat-footed. Nothing can protect you from risk. However, with a thoughtful, proactive, and detailed insurance plan (as part of a comprehensive financial plan), you may find yourself with more options than you would have had without insurance

¹ “Insurance: The Complete Guide,” Investopedia, accessed February 27, 2020, https://www.investopedia.com/insurance-4427716.

Pension Maximization Strategies

You’ve been saving for retirement—now what? If you don’t already know them, you might want to look into the differences between a defined-contribution plan—such as a 401(k)—and a defined-benefit pension plan. Defined benefit Pensions are rarer these days, but they do still exist. If you have a defined benefit pension, you need to understand how it works, and what the rules are as it relates to your retirement income plan.

A defined-benefit pension plan, which we’ll call “pensions” from here forward, provides a specified payment amount. They are also employer-sponsored, which means the employer, not the employee, is responsible for the investment risks associated with the plan. For a defined-contribution plan, the employee is responsible.¹

Because pensions are guaranteed by the employer, they require a complex administration, including insurance and actuarial projections; this has made them almost completely obsolete as employers move toward defined-contribution plans like 401(k)s.¹

Beyond these distinctions, defined benefit plans also have different ways that employees can receive their payments in retirement. There could be lump-sum payments or payments available over time. There is the U.S. federal government, which insures defined-benefit pensions; there are tax considerations and much more.

¹ Lawrence Pines, “Understanding the Rules for Defined-Benefit Pension Plans,” Investopedia, accessed March 9, 2020, https://www.investopedia.com/articles/credit-loans-mortgages/090816/understanding-rules-defined-benefit-pension-plans.asp