2021 EP0313 PLANNING MATTERS - COUNTDOWN RESOURCES

Plan for success planning matters radio bay and into another edition of planning matters radio. I am glad day money that I am in your financial future folks in life we trade our time for money by making that trade would seem that money is the more of the two, but it is not.

We tried to trade just enough of our time can afford to live the life that she that's what it's all about is figuring out how to do your time effectively use money effectively to be able to support the values that are important to you that were to be talking about today on planning matters radio. I am Peter Rochon and the founder I am an advisor for which on planning Rochon planning is my last name.

You can find us online@richonplanning.com and we got a lot to talk about. So let's get right into it. First talk about the optimized retirement plan that we offer to put together for our clients and listeners to this program. If you have concerns.

If you got questions about your financial future.

I think getting this document in your hands would be a big help to you. Now the optimized retirement plan is custom specific is your situation in writing on paper so you can refer back to it. It's a snapshot of where you are today step-by-step instructions on how to achieve the goals that you define and a timeline of action items in order to help you do that it addresses income investments, taxes, healthcare and legacy planning, and it is just part of the service and the resources that we have available at Rochon planning. If you would like to get your customized optimized retirement plan, pick up the phone and give us a call 919-300-5886 919-300-5886 yet friends they have told you about game stop and how much they love game stop. Let me tell you they don't love game stop. They love the fact that they are making money and can't explain why. And it's a recipe for disaster.

A lot of people are dumping a lot of good money into something that they have no understanding of what it is why it's going up.

Now I have nothing against game stop as a company I've got an 11-year-old son enjoys a videogame from time to time we go to game stop occasionally to purchase that game. However, that company lost nearly $1 billion last year and the year before, and its price was significantly below and hedge fund pictures believe that it would be going even lower due to the poor financials of the company so they made bets against and that's when a group of three savvy individuals got together in a public discussion forum and said let's start buying the stock. Now these are not amateur. Average investors.

These were people who had pretty large money and were pretty savvy and knew what they were doing well.

The bandwagon grew and grew as they started purchasing that stock in his new spread, and as it was publicized popularity got in increased and the echo chamber was louder and louder and then all of a sudden good money started pouring in from average people who did not know why they were buying into it, claiming that they understood what was going on and that they loved the stock they don't love the stock. They simply love the fact that they're making money and don't really know why.

Nothing wrong with that. Nothing wrong with making money, but it is a problem that you don't understand why it's going up and that could turn the wrong way. So just a little discussion now.

What should you be doing with your money in retirement. Those questions are answered in your optimized retirement plan defines the process. The process is going through income planning, investment planning, tax planning, healthcare planning and legacy planning. It overviews thoughts from your financial advisor your concerns and goals and potential problems with your plan for your financial future. The income plan covers needs that need to be addressed. What is in good order actionable items and additional notes the investment plan again what needs to be addressed and what's in good order. The tax plan tries to help you optimize your tax liability into the future leverage in money and keep as much of your money as possible.

That's what we hope to do, but we also have concerns the taxes could be going up into the future. The majority of Americans. We have saved our retirement nest egg in tax-deferred accounts. This means that our tax bill has grown along with our account value, and that the amount of taxes that we owe on that account could be subject to change if the government if the Congress if the IRS chooses to change the rules. Could they absolutely they've done it before and they will do it again. Will those changes be in our favor. Probably not.

And so we know what tax laws are today we know what opportunities we have today to control that tax liability. The name of the game in financial planning is to maximize what you have control over and minimize the elements where you can't control, and so tax management specifically is looking forward and say how can I better control the unknown variable of taxes into the future how much I actually have to pay, and there are opportunities to strategically optimize your portfolio to efficiently realize the tax liability. The bill that is there inside of your retirement nest egg and to pay as little as possible. We can run a tax analysis and show you if you default to the IRS's plan under current laws versus if you are proactive and enact your own plan. What's the difference in that bill. What's the difference in that liability. And that's as tax laws stand today's taxes change in the future it could be even more significant.

Trust me it is a significant savings for most people who have seen that optimize tax report. It is something that is really mind boggling the fact that your future tax liability could potentially be as much as your account balance is today with growth over 20 3040 years on a tax-deferred account and then paying the taxes that are required when you take income. That bill could be as much as your current account balance and a lot of times we are able to buy the IRS out of that account for as much as nowhere as little as 25 to 30% of that tax bill that could build into the future. So if you'd like to see that optimize tax report pick up the phone. Give us a call. That is part of your retirement plan. We'd love to show you that in in black-and-white hand read the red is the tax bill that you would owe. We want to make that red number as small as possible. Just like you, we can help you do that, pick up the phone.

Give us a call 919-300-5886 919-300-5886. Now, we put together a series of great reports. The countdown to retirement and these are issues that you need to address in the 5 to 10 years. As you get ready to retire and during and throughout your retirement once you launch once you take off into retirement.

The journey is not over.

Know the challenge of just begun.

And so we need to make sure were addressing specific issues so the first in the series of the countdown to retire is are you ready to retire this 12 questions that you should know the answers to before you prepare to retire.

How long would you be able to generate the income you need.

If your paycheck stopped today. There's been plenty of people who intended to retire at 67 or 65 and then suddenly got word that their company no longer required their services at 60 or had some unexpected event stop their ability to earn income even sooner than that younger than that. If your paycheck stopped today. How would you be able to generate the income that you need to maintain your standard of living to support yourself and your family. Number one question. Have you identified and calculate your retirement income gap. This is a term that a lot of people haven't even ever heard the retirement income gap. This is a specific number. Ladies and gentlemen, this is that retirement number that people talk about that they think about they say will how much do I need to retire but people think about this in terms of a lump sum is $800,000 is a $1.2 million. That's not the way to think about your retirement number the retirement income gap is retirement income gap is your monthly expenses minus your sources of guaranteed income. The income that you do not need to generate from your personal investment portfolio that is your monthly income gap that is the amount that your portfolio will need to generate for you on an ongoing month-to-month year-over-year decade over decade basis into and throughout retirement. Have you identified that number. Have you calculated that number we can go through a process with you and help you understand what that retirement income gap looks like, you know how much you have available in discretionary assets over and above what it's going to take to fill that retirement income gap.

This is the question of am I ready to retire. How much do I need to retire was to have left over, above and beyond what it will take to retire to do all of the things that I dream retirement will be about those of the discretionary assets over and above what it takes to fill the retirement income gap question number four on the are you ready to retire. Only the first in the series of our guys on the countdown to retirement. By the way, you can always get your copy by giving us a call 919-300-5886 going online rich on planning.com or if the if you would like to click the link below the video. You can click you can like subscribe share hit that bill so that you are notified when new additions of planning matters radio are made available each week we come up with this podcasting with this video with different content to make sure that you are thinking about the subjects that you need to address in order to better prepare yourself for retirement for your financial future.

Look, we do a lot of things with our money when you boil it down, there's really only four categories of those things fall into. We pay taxes we pay bills we spend, we can put that that would that we buy groceries we can put that we give to our charities.

We tie that's in the spending category and we save and for those first three things we have to realize that when we do those that dollar is gone to us forever when we pay taxes, pay bills or spend that money, that dollar is gone. All that we have left is number four what we have saved and we have to use number for that savings to reproduce our ability to do those first three things once we retire, paying taxes, paying bills and spending aren't going to go away on the day that you walk away from the paycheck. You have to take what you have saved and reproduce your ability to do those first three things if you want to continue to spend the course we do pay bills we have to and pay taxes will have to do that as well.

We have to have saved an appropriate amount for retirement otherwise are going to be changing our standard of living significantly and and dropping that standard of living.

Social Security was never meant to give you the same standard of living that you had during your working career. Social Security was an insurance against poverty in old age or under the circumstance of disability look look up Social Security and what it is in old age and disability insurance program, and I laughed when people started saying hey the government can't force me to buy insurance yes they can and they been doing that since 1935. Since the advent of Social Security that is a government mandated insurance program to help stave off and prevent poverty among the senior community and if you have a disability and so Social Security was meant to keep us just above the poverty line not provide all of the lifestyle that we had when we were working. So we need to save and we need to save aggressively. Trust me, retirement is expensive.

Here's a math problem for you and don't worry, I'll give you the answer.

I'll do it real quick on my calculator. What is to times 3×7×10×52×20 that is 436,800.

Now what does that represent will that's the cost of food potentially over 20 years in retirement to people eating three meals a day, seven days a week at $10 a meal 52 weeks a year for 20 years is $436,800.

That's not to scare anybody but that's one of the smaller costs in retirement. When you look at your taxes when you look at the potential cost of healthcare. When you look at inflation. These are all things that we need to worry about the we need to consider ahead of time that we need to plan and prepare for and that's why you need to understand all of the issues that are addressed in the countdown to retirement. Just a few other items that are in that countdown to retirement report series of reports the 2021 retirement guide and again this covers some very important topics that you need to have addressed the financial retirement planning guide and checklist it. It talks about have you evaluated your current effective tax rate. Have you increased your income need by the effective tax rate to calculate your gross income needed in retirement.

You deduct your tax rate from your personal lump sum savings to calculate the approximate amount that you will need to keep in retirement. You will need to have for your living expenses.

Again, this is calculated into that income gap that I was talking about before another report. The 50 401(k) mistakes, lots of people participate in 401(k)s and they are a good thing to have. However, lots of mistakes are made with those 401(k)s anything from not participating, not capturing all the available match. If you have one not starting as soon as you are eligible not maximizing the available matched not utilizing the Roth option. If you have one available.

Not reviewing your statements not rebalancing on an ongoing basis, not understanding your investment choices and options not paying attention to the fees inside the 401(k). Not understanding internal cost not prioritizing with other savings and investment options 401(k)s a great tool but you may have better tools available over and above the match that you are receiving not understanding the internal cost not reviewing the progress or addressing the risk exposure that you have. These are all things that are addressed in the 50 401(k) mistakes is also the 10 steps to prepare for retirement. Define your budget define your guaranteed sources of income to find that income gap strategize on Social Security to maximize that source so that you can minimize the income gap in the stress and strain in the reliance that you have on your personal assets, formulate a written income plan. And this is one of the big steps that we help our clients with at Rochon planning is that we sit down and we give a plan that many have never seen before. Instead of looking at the investment portfolio and projecting out a hypothetical rate of return in the future.

Oh you make 10% only. Only 12% and you'll have $10 million by the time that you retire and pass that on to your children after your your life.

No, that's not the right way to look at this and it's not realistic in today's world. What we need to look at is that income plan. When will you tap into the assets in your 401(k) when you tap into your IRA or your Roth IRA.

How do different investment tools such as bonds versus stocks versus dividends versus Social Security how they taxed in retirement. How can we make sure that we are being as efficient as possible and keeping as much of our money as possible.

We need to formulate that income plan we need to address and understand risk exposure. We need to calculate out for taxes. We need to consolidate like qualified accounts.

Yes, diversity is important, but that does not need mean that you need to have five different IRAs scattered around that becomes harder and harder to track and and keep tabs on and if you leave that behind it could create quite a mess if maybe your spouse or your children don't have all of the intimate details of where your money in your assets in your accounts are. I have seen that I've seen people completely lost in and not knowing where the assets were that were intended to support them and give them financial security. 11 spouse had handled the finances and they did the that the family unit a favor by doing so, but the other person was in the dark and that was no favor. So again the 10 steps to prepare for retirement. It talks about these subjects. It's just part of the larger countdown to retirement series reports. Absolutely something the you should get your hands pick up the phone.

Give us a call and we will get that out to you.

You can also get a copy of my book.

Understanding your investment options. The most important book you'll read this year and important is is scratched through a boring. It's not a page turner. I'll admit it will be the first to admit, it is not something that you're going to be riveted to read the next chapter, but it gives you a basic understanding any reader of this book should be able to have a pretty well-informed conversation about all of the different investment options that are out there. Everything from ETF's to mutual funds, what types of different bonds are there government bonds, corporate bonds, municipal bonds, mortgage-backed security bars white. Why did they fail and cause the great recession, gold, silver, crypto currencies, all of those are discussed in the book the different types of annuities and life insurance. If you are interested in those. There are a lot of different choices and options.

There you should understand that some are more complicated. Some have risk, some don't. Some are very straight forward, plain and dry where you get a set interest rate for a set period of years and then you walk away with your money. That's actually pretty attractive to many sabers and investors today because they pay a higher rate than most bank products. If you get a similar term for time length, duration, CD verse, a fixed annuity. Often times the fixed annuity is paying 345 times the interest rate as the CD of a similar time duration a three year CD right now. Maybe paying 1% you may be able to find a three year fixed annuity right now paying 2 1/2 to 3%.

It's worth exploring.

It's worth understanding all of your investment options.

There is not an evil option that is always wrong, always bad all the time, nor is there a best option that is always right in every situation. That's why you need to understand your investment options and why lay out a quick explanation of what each one is its benefits, its disadvantages, the type of risks you are exposing yourself to in each said choice so that you can have a better understanding if you would like the book understanding your investment options if you like the countdown to retirement, pick up the phone. Give us call 919-300-5886 919-300-5886 be happy to get that out to you back to the first of the reports in the countdown to retirement.

Are you ready to retire.

Have you formulated a plan to use Social Security to maximize income and protect your personal assets. Social Security is a tool. Ladies and German should you take it 62 should you take it at 70. Those are part of the two schools of thought should you wait till full retirement age, and then claimant will based on your situation. Maybe that is appropriate. But here's the thing, Social Security should be used as a tool to protect your personal assets. None of those answers are universally always right for everybody situation is going to be different. Your situation is very different than your neighbor situation and your brother situation and your sister situation in your parent situation the way that you use Social Security is unique and individual to you and by the way, the folks down at the Social Security Administration office. They don't provide advice on that their job is to file the paperwork on the day that you show up not tell you if that's the best day to show up because they are not advisors. They do not know the rest of your financial situation. They don't want to take on the liability of providing advice. So if you like advice on how to properly utilize how to maximize how to be efficient with your Social Security seek some competent, qualified professional advice.

The Social Security report and analysis is something that we do for our clients every day for Sean planning, and it has literally made a swing a difference in several hundreds of thousands of dollars over lifetimes.

That's money that you either are going to get from the Social Security ministration office from the Social Security administration system or you're going to have to generate that from your personal portfolio from your assets. I know which side I would rather get it from. I am entitled to that.

They call it an entitlement. People say well I don't like the terminology entitlement. No, I am entitled to that because I paid into that system and I want to get as much of my money back out as possible. Plus some rate of return. Now, in order to do that. I gotta make well thought through and informed decisions gotta maximize the strategy on how I'm claiming and collecting Social Security. If you like to see that the optimal strategies for your situation that we can't tell anybody what the best strategy is. Unless you can tell us the day that you're going to take a limousine to heaven. Nobody has been able to tell us that yet.

I don't think anybody should be able to tell us that we can tell you the optimal strategies.

The likely strategies that will produce the most income for you over your lifetime and here's the important part how to use it to protect your personal nest egg is much as possible. Now why would we want to do that well because Social Security is not a liquid asset you can't reach in and pull out more Social Security. If you have an emergency come up.

Social Security is not a legacy tool. It does not pass on to next generation. Your personal assets do those things. That's why we want to protect your personal assets as much as possible. Social Security is the tool to do that, but you've got to take time to educate yourself to maximize Social Security.

Do you know how you would cover the cost of medical and or long-term care expenses should you or your spouse require care. That's a big one.

Another one of our reports in the countdown to retirement is the three largest expenses in retirement and how to plan to control number one are largest known expenses, taxes, number two, the largest potential expense is healthcare now another statistic from the Department of Health and Human Services is the amount that seniors will likely pay for healthcare.

Over the course of their retirement in just Medicare premiums alone. This can be upwards of $200,000 for an individual $400,000 for a married couple.

When you add in the cost of routine care, medical, dental, vision, and then if you have any type of extended-stay hospital stay true medical needs. Or, especially, long-term care, nursing care needs those excess expenses are extensive they can be another 6000, 8000, $12,000 a month and if you are a married couple that is in addition to the regular expenses of the healthy spouse that is still living a life in providing that care and so we need to carefully plan for this.

This is the question. This is the issue.

This is the expense that has bankrupted retirement many many times and changed the quality of life for the person in need of care, and maybe more importantly for the caretaker of the person that has provided that care the person that most often is actually if you look at at at those statistics and numbers is the daughter or the daughter-in-law is the most frequent caregiver in a family unit is the person who is most often providing care when she will be eight like to be able to provide them some compensation for taking time out of their busy lives to provide that care if needed, you can plan for that.

You can set that in place you can you can make arrangements to be able to not only afford the care if you needed to compensate your loved ones for providing the care if they are willing to step in and do that.

This is all part of planning and again. It's part of the optimized retirement plan is a snapshot of where you are today. It is a discussion of definition of an end put in writing of the goals that you have for your financial future. We put that in writing so we can make sure that we remember them and are working toward those and then it is step-by-step instructions on how to work to achieve those goals.

Now this is not a thousand pages of financial jargon and charts that you don't understand like what's going on with the game stop stock. This is simple, easy to understand language. This is concise, consolidated it addresses the issues that are important.

It addresses your investments, your income, your taxes, your healthcare and your legacy is about 6 to 7 pages and it goes over all of those and then their subsequent reports like the countdown to retirement like the optimized tax report. Like the Social Security report and analysis.

They are back up documents to the optimized retirement plan and certainly we can look at those unique individual plans and and discuss those as well.

But if you would like that snapshot you can refer back to. That's the one document that you need that optimized retirement plan. All the other documents are supportive to that if you like to get that put together something we love to hear from you.

Would love to talk to you. Would love to help you get that plan so that you feel more confident about your financial future have to take the first step, pick up the phone. Give us a call 919-300-5886 919-300-5886.

You can visit online rich on planning.com right on the front page of the website, there is the opportunity for you to give us your information and receive a copy of my book, you can get a physical copy in your hands or you get the digital addition, if you'd like. Understanding your investment options. Just go to Rich on planning.com or Sean planning.com and request that you will have the chance to do that before you enter the site or you can click the links around the video down in the description below the video. All of the resources that I've talked about today, there's links to them and you can go there and download those. Just click the link below in the description and of course as always, be sure to like subscribe share. If you have the opportunity you felt this information was valuable hit that bell so you're notified when the next edition of planning matters radio is is released.

We release these on a weekly basis and we'd love for you to stay in tune because were talk about different important topics about your financial future. Each and every week. Again, I am Peter Rochon and the founder of Rochon planning I'm an investment, financial retirement planner and looking forward hearing from you, helping you out.

Anyway, we can made up of a bunch of offers today about different reports about different resources to get your plan together so that you can address the important topics that you need to have thought about thought through and dressed to achieve your goals and your financial future and would love to get those in your hands. The optimized retirement plan, the optimized tax plan. The Social Security report and analysis the countdown to retirement.

The book understanding your investment options.

These are all resources that we have available to help you in your planning and would love to get them to you pick up the phone gives call 919-300-5886. Talk you planning matters with planning matters radio the content of this radio show is provided for informational is not a solicitation or recommendation of any investment strategy you are encouraged to think investment tax or legal advice from an independent professional advisor. Any investment and/or investment strategies mentioned involve risk and possible loss of principal binary services offered through virtual capital management, a registered investment advisor. Fiduciary duty extends only to investment advisory advice but does not extend to other activities such as insurance or broker-dealer services advisory clients are charged a quarterly fever as a commandment belligerent product pay a commission which may result in a conflict of interest regarding compensation