10 Commandments - Planning Matters Radio - 20

Plan to fail to plan for success planning matters radio program. This is which on planning and matters radio. I am here with Jean Jean, founder and advisor Sean handling your investment and retirement planning needs.

Live here in office.

I handle the group health insurance. The supplemental and life insurance, and together we try to help savers and investors make sure that their plan is on track to achieve and secure your goals into the future. Today we got to show me talk about the 10 Commandments of retirement.

This is a list of 10 things that you absolutely need to have addressed in your planning. In order to make sure that your plan does work to help you achieve and accomplish your goals. Before we get into that. I do want to address a little bit of the elephant in the room Amber which is the fact we see a lot of market volatility here in 2018. I totally agree. And as we go through these commandments, Peter, I just want to let everyone know that I'm the voice of the people. So when you say things like market volatility, what you exactly mean by that the market has been up and we we've heard that the market always goes up and a lot of us count and rely on the market going up for our financial progress, but it doesn't always go up.

There are times, like several times this year we lost a significant value in the market between October and the end of November.

The market indices actually fell more than 10%. So we had $100,000 invested in the S&P, for example, one of the major market indices, then it the end of November. We might've only had 90,000 left and when people say why I want to take risk in order to get better returns or rewards. A lot of times they focus only on the returns or the rewards and they forget that risk means the possibility of having less money than you started with not a lot of people would feel comfortable having their hundred thousand turning 90,000 investors handling the volatility in their investment portfolio will it really depends on how well they are allocated, how good of the handle they have on their portfolio if they are allocated correctly. Meaning, in line with their risk tolerance, and only taking appropriate and necessary risk than temporary fluctuations in the market might not affect their day-to-day lifestyle.

In fact, it is fundamentally an opportunity for workers who are still earning a paycheck and that paycheck covers their bills and their standard of living, and they're making contributions to their retirement savings and a plan like a 401(k) downturns in the market actually present us with an opportunity is called dollar cost averaging we get to buy things on sale today for something that we could sell at full price at a later date. So as long as we are appropriately balanced and understand the amount of risk that were taking and only taking that risk, which is necessary or appropriate for our situation, then we shouldn't panic when we see short-term downturns in the market. We should feel like that's par for the course because it's going to happen today, tomorrow and at points in the future. It's going to continue to occur, as long as we are invested as long as the market is the market will have some volatility. What if someone is not sure if they're taking the appropriate amount of risk. Peter will that's why we offer one of the services that we do extends to listeners here on the radio program, which is the opportunity for that complementary portfolio review. If you are uncertain of the amount of risk that you're taking, or if you've seen a lot of gains in your portfolio over the last 10 years and want to make sure that you protect some of that principle or if market volatility does give you any kind of apprehension or nervousness.

That's probably a pretty strong indicator that you do have a large amount of risk in your portfolio and yo to yourself to review that and check it out and we do offer the opportunity to do a risk assessment help you understand the amount of risk that you're taking and gauge whether or not it is appropriate for your time in life and and your risk tolerance and your need for for taking risks of if you like to take advantage of that opportunity. Give a call 919-300-5886.

Again, you can give us a call at Rochon planning 919-300-5886. He can also always go online rich on planning.com Rochon planning.com you will gladly sit down with them and speak with them and map out everything and make it more simple for them to understand is that correct currently at at and do so at your level know whether you are more advanced investor.

If you're just kind starting out and and beginning we will make sure that you understand the terminology that you're comfortable with what were discussing and where you have dollars invested or saved that you understand what's going on. That's what makes it your plan. If you leave your investment advisor's office and and you feel like it was a great conversation I understood. Absolutely none of it. That's not your plan that's their plan so we want you to understand your plan and the fact it is of benefit to us because if you can turn around and you can explain the conversation that we had to your friends or family.

Then they get it and they understand that hey, maybe this is a person that I can relate and talk to so that he did a good job is mutually beneficial for you to understand your plan and not just have it be your financial advisors plan. I actually like the financial world is like overly complicated. A lot of times, to the detriment of the advisor and of the client. You know I 100% agreement that Peter and that's why I am here at the voice for the people.

If you guys have any questions at all whatsoever. They can give us a call at 919830058869193005886 and again we are here on planning matters radio. I am able Rochon and let's go ahead and get into those 10 Commandments, absolutely yes. So this list. It was featured actually pulled this from a recent market watch article and ended outline the 10 Commandments for retirement and and I took some of these little liberally and gave some twists or my own perspective on what we need to be doing or thinking about as we prepare for or make our way into or through retirement. So that's what this 10 Commandments of retirement is about number one on the list. Amber is playing with the lifestyle in mind and what I mean by this is that so often I see investors worrying about the lump sum that they have or the rate of return on their investments and they're not really thinking about what those dollars are going to provide for them into the future they that are not planning based around what they want to do with their time in retirement and then reverse engineering and thinking will. What is that vacation going to cost what is that extra trip a year was my time and what I envision spending doing with it actually going to cost me because that's much more important than the rate of return that we have made this year. Obviously that is important rate of return is a something that we do need to understand both number one on this list of 10 Commandments of retirement planning is playing with lifestyle in mind, not age or lump sum or or rate of return, but what do you envision doing with your time, but really what you're saying is simply in your rate of return explanation is in the facet on the couch and watch TV yet. I want to go to the Bahamas and I want to spend extra money.

Whether it be now or later.

Then I need to get up and work hard for it now right. We need to have the financial ability to afford the things that we would like to do so II meet a wide dynamic of different people. A variety of different goals for retirement. Some people want to travel every day and make life a vacation after they quit working the some people are are very content living at home living conservatively and frugally in an doing a few things around the house, but mostly just filling their time with reading more volunteer work or for things like that, different goals, depending on what you want your lifestyle to be. That's what we need to plan based around and so many people get caught up. I saw this clever commercial a few years ago what your retirement number and I had this big green number floating over people's heads will it's it's not about a number. It's not about a number that's a lump sum it's not about a number that's an age another group I see I'm to retire at 65 or I'm to retire at 67 will does that lump sum you, you envision orders that age that that you see yourself retiring at truly indicate if you're ready to retire. No, it doesn't planning based around lifestyle will indicate if we are truly ready and prepared to retire or not and the foundation for a lot of people's retirement in America is Social Security number two on this list. Understand Social Security. Not a lot of people do right. There is a lot of different choices and options. Remember Social Security's designed to replace no more than 40% of your working career income. So, less than half of what you've been used to living off of and for most people, not even 40%, especially that the higher income earners-if we've been blessed to be a little bit more affluent earn a higher income, Social Security is going to replace a smaller portion of that working career, income, and so we need to understand Social Security we need understand that there's a complex lifelong decisions that we are making when we go to claim Social Security and and we've all had decisions that that are life impacting lifelong decisions that decision to get the nerve to ask our spouse out on the first day that end up in a happy marriage good lifelong decision rights or that will see we messed up bad lifetime decision. We don't want Social Security to be the bad lifetime decision but it's my understanding a lot of people that speak to Alton, the insurance world when I'm out doing the group benefits is can we or the big question is can we depend on Social Security so they don't try to sugarcoat this a false advertising. They state in two places right on your Social Security statement one on the front cover and then again in bold. When you open it up that by the year 2033 Social Security trust fund will only be able to pay out about $0.77 on the dollar promised benefit. Here's the thing they've made changes to Social Security before and those same changes. I am fairly certain they're willing to make again making it taxable. Extending the retirement age. It used to be 65 now at 67 yeah I wish they would address these sooner rather than later.

Waiting until it's it's a kind of a forced, but I think that what will end up happening is yeah they they probably will only be able to pay $0.70 on the dollar promised benefit both of them pay the full promised benefit to those people who are already in the system counting a lien on where to reduce the benefits is for the younger generation are to tell them hey you know you guys are living longer working to push that retirement age out till 70 or 72, and so they'll balance the equation while maintaining their ability to stay in power because that's no every politician number one job is getting reelected. So they'll kick the can down the road and adjusted the people are worried about valid point. You know you need to be concerned about it, but Social Security does not stand alone.

It's not an island. It doesn't mean everything. It's not in a vacuum. What you're going to depend on in retirement. You need to also plan and save and have a backup plan.

Absolutely there is no this is the primary plan.

The primary plan should not be to depend on Social Security there you go right again the voice of the people.

I'll once again, if you are tuning in for the first time or just tuning in, I am Amber Sean this is Peter Rochon we are talking about the 10 Commandments for retirement. We are onto number three on the list, which is retirement planning requires estate planning sure does so my dad's estate plan was.

He planned on bouncing his last check. Right had a conversation with me many years ago. I'm gonna bounce my last check. My response was no problem so long as you make sure it's the last check. You needed to right now because we don't want to bounce that last check and then have 510 more years were we've needed to write more checks so when you plan for your retirement. You're also planning for a legacy and and whether it's for your children or your spouse maybe more importantly for your spouse, you need understand the consequences of the decisions that you are making and their impact after your own lifetime guy is going back to Social Security. Not a lot of people understand that up to half of the Social Security income is going to disappear when their spouse dies. So if you have Social Security and I have Social Security and I pass away first. Most often it's the guys pass away first. You only get to continue receiving the higher of the two Social Security's so if we haven't even Social Security's you have a 50% drop in your income. When I pass away right and and at at the least, it's going to be a one third drop in income because what surviving spouses need for income their expenses. They're not gonna drop in half the nothing to drop by one third. In fact, they might go up because they need to fill their time with something other than spending her time with you right they got find fulfillment and a lot of times not only is that Social Security affected. But what if there's extenuating healthcare expenses for the last couple years. Now you're leaving your spouse with the depleted asset base and decreased income and you depleted your legacy right so when you're making the decisions preparing for retirement, and getting into retirement at 50 at 55 at 60 at 65 understand their implications at 8085 at 90 might be something that you need to be aware of and concern yourself with estate planning is a part of retirement planning and even for those among us that say I don't care about leaving something for my kids, you know that's not a selfish statement. If you've worked hard to save and and and build wealth for yourself and you want to enjoy it.

By all means, just so long as you have a plan that continues to provide for self-sufficiency. You don't ever want to risk becoming dependent so retirement planning does require some amount of estate planning and they need to complement each other so Peter went to the life insurance plan.

To that you attribute I see a lot of people on the day that they retire.

They've paid off their debts.

They got paid off house. The kids are out of the house. They no longer have to replace an income with their job anyway and they built the largest amount of personal wealth that they've ever seen in their life and they say I no longer have a need for life insurance will our needs change and evolve and don't allow that to fool you into thinking that your plan does not need some amount of life insurance because again you know coming spouse and and especially if you do have a spouse that depends upon your income life insurance at different points in our life serves different purposes and may be where when we were younger.

Life insurance purpose was to replace income to take care of children to pay off debts to provide for spouse, towards the end of life.

Life insurance is still very valuable for estate and legacy planning. It's a much better tool to leave behind money than your IRA or your 401(k) life insurance passes tax-free and also Inc. about your family and and if you spend down your money when that leave them with a lasting memory of you right if you left your spouse with that decreased amount income so you know that it's more than money. Number four on our list and this is why we circled around is that planning is about more than money money as has a financial advisor. I can tell you it's important but it's not the most important thing money is a tool to support the values that are important to you and if taking care of your families a value that's important to you know you might want to consider the planning tools that are available and make sure that you got a cohesive plan that provides for the support of your values while you're here, and even after the time that you're gone.

And if you feel like you want to look at life insurance or might be underinsured. We can do a quick comparison and get you quotes and prices from over 50 different companies in under five minutes so it's absolutely something that we do. Once again, I am Amber Sean this is Peter Rochon.

We are on planning matters radio number five on our list, which is an urgent message to group health insurance. We do a lot of supplemental insurance as well for groups and individual life insurance. I strongly strongly recommend that you just listen to those communications from your employer, you never to be financially successful without opening your mail. I promise you'll never be financially successful without opening your mail to see who's trying to tell you that you owe what and to understand the communications that are coming to you those messages are urgent and we get a day luge of messages in a million text messages a day. A thousand emails and an hour and 50 pieces of junk mail in our mailbox all by the time we get home. Right so it's easy to just get overwhelmed by that amount of communication, but Medicare, Social Security your personal advisor your employer, especially around the time that you're about to retire are sending you some pretty important communications that ultimately if you miss deadlines or or miss executing certain things might make or break your financial success.

Do we need to make sure that were paying attention to those urgent messages executing things by the deadlines they need to be executed by number six on the list.

First things first, prioritize your priority. Again, this is a tough one sometimes because people have multiple financial priorities. Hey I want my kid through college and I want to save for retirement right that's a big one. Okay I get it I'm a parent we are parents we got a great kid that we die would and I know you would do just about anything for, but at a certain point in time, doing the best thing for him is making sure that he's financially independent. At some point time and then making sure that were never dependent on him right. I mean we liked his diapers as a kid I don't ever want him wife not happen. I never want him wiping my guy and volunteering such a nice yeah sure call called and asked they want to take on the unpaid, three, four month vacation come back like you died exactly see how that works out so we need to prioritize priorities and by this and and that example the big one of saving for college versus saving for my own retirement colleges about preparing for a time where going out to the workforce and hopefully earning more money and therefore they give loans for that retirement is about planning for a time that we don't intend to ever work again and will never earn another dollar hopefully and because of that they don't give loans out for that. You mean if you got paid off house, you can ask for some of that money through a reverse mortgage, but that's about the closest thing to a loan for retirement. There is, and so let's make sure to prioritize priorities if both of those are goals and we can accomplish both of them fantastic, but we need to understand that order of operations like in math class.

What do we need to do first, second, last, to make sure that were taken care of. First things first.

I know one of the biggest misconceptions is: I'm too old to plan for retirement or I'm too young to plan for retirement would you say that Peter never too old. Never too young. You know, if you wanted shade in your yard. The best time to have planted the tree within 30 years ago right. But if you didn't plant one.

Then the best time would be today.

So if you started a long time ago. Or if you're young and you want to get the ball rolling.

Fantastic. But just because you haven't done it till now doesn't mean it's a lost cause.

You've only lost that because if you continue to have that realization, and then do nothing about it though, let's not for Creston leaders. Procrastination is the is the biggest enemy of progress. It is not preparation was be a little bit more proactive, and the government actually gives you some opportunity to do that. Number seven on our list, charge up, save as much as possible.

As soon as possible as early as possible. But if you have not, or if you feel behind after the age of 50, the government lets you charge up your savings they actually what you do what's called catch up contribution. So if you are maxing out your IRA or your 401(k) and then you turn 50 years old. Guess what you got the opportunity to put even more in those accounts and I think that if you feel behind her. You want to make sure that you're not falling behind you should take advantage of every opportunity possible to save as much as possible when you know people say save 10% pay yourself first will add up 10% over 30 year career at the end of 30 years you got three years of income save for yourself. Not a lot of money is not enough and end. Fantastic market returns over that time.

Maybe you double that were quadruple that okay now we got 12 years of income statement and still not enough. We've got to learn that we need to take advantage of each and every opportunity to start and to expand on the amount that we are saving for retirement. This is planning matters radio.

I am Amber Sean for your insurance needs and my husband Peter Rochon, founder and investment advisor here at Rochon planning.

If you would like that free complimentary review pick up the phone and give us a call at 91983005886 and that brings us to number eight on the last tax planning yet so I see a lot of people doing what I call the gross planning mistake. What I mean by that the gross planning mistake is that they are planning for retirement based off of gross numbers are right.

So when you earn a paycheck. Your pay rate is your gross income before you get your money Uncle Sam takes a bite and what you actually bring home is your net income so let's say that every week you worked and your gross pay was $1000 but what you're bringing home your net income was only $750 right you budgeted your lifestyle off of $750 per paycheck. That's what you have designed your spending off of what I see is people of saved this nest egg for retirement is 500,000 some million dollars and they say want to live off of 40,000 or 50,000 a year that's not what you to be taken out of your portfolio. The gross and the net are going to be different. If you have deferred and delayed paying taxes. Most people have put their money into this 401(k) because we've been told were going to save on taxes. While I can crunch the numbers on that one and debunk that myth for you. And even if you believe what they told you is true and that you will be dropping tax brackets in retirement. I can show you were.

That's not actually going to be a saving so I encourage you to re-examine that principle that we've all been taught to save under but when you're thinking about how much you're going to be able to live off of and depend on in retirement. Don't forget to factor in taxation as if you got 200,000 say for yourself and you want to live off of $40,000 a year.

You actually can have to take out $50,000 a year that's going to plead that nest a little faster. Don't make that gross planning mistake in and unfortunately a lot of people don't think about the debt that they owe to Uncle Sam.

Right inside that IRA and number nine on the list. A lot of people don't think about the health care expenses either. Amber, can you explain those to us from a retirement aspect sure will. I mean we we think about Medicare right is going to cover the cost of care throughout retirement. It has been estimated that a healthy couple that reach age 65 will spend over $450,000 over the course of their retirement lifetime just on routine care and Medicare premiums alone. That doesn't even include what could potentially be a five to $10,000 a month cost of long-term care coverage so healthcare planning is is critical to me is vitally important making good decisions with your Medicare, understanding how to protect that that the options available for long-term care protection and there are a whole lot of them. We don't want to ever become dependent on the family as we talk about. We don't want to ever become dependent on the government. Even people who are very affluent well off.

Have a good deal of money sometimes tell me hey I'm self-insured. Well, you know that for like a percentage of what you have there 1% per year, which are going to get in growth.

You can actually protect the rest of that nest egg that's giving you that level financial confidence like there's there's a lot of options for how to handle this question. People take the old ostrich approach. They… Their head in the sand the same way with the rising healthcare costs in the individual market or the group market right. Guess what with your head buried in the sand. Your backside still exposed. I mean, you're not doing anything to protect yourself. So rather than that. Lift your head to pound sand, look ahead on address the issue and decide on how you can approach this question and you know what, there's probably a reasonable way to do that again. You are listening to planning matters radio.

I am able Rochon on Peter Rochon and we are talking about the 10 Commandments of retirement and were rounding out our list here. Number 10 Amber withdrawal planning now. I've seen literally thousands of different people, situations throughout the years. I would say the vast majority of savers and investors do not have a written plan for retirement income do not understand how to piece together Social Security, pensions and withdrawals from their personal retirement accounts their investments their IRAs and 401(k)s their bank accounts or brokerage account to your list and so many accounts there. Peter, you know, though, that the pieces of the puzzle when they're in a box and scattered might not make a lot of sense. It takes time to take all those jagged edges pieces out and create a picture that makes sense.

That's why need an advisor right look. A lot of people are moving into retirement with a jumble box of pieces have never put the pieces of the puzzle together to see what that picture in retirement is going to look like before I make that leap and say I'm never going back to work again take this job and put it wherever you want make sure I understand what the picture thereafter is going to look like and that's why Rochon planning one of the biggest things that we offers a complimentary review, including the retirement planning strategy session and will put in writing that retirement income plan piecing all those pieces together showing you where there could be problems.

What the missing piece in your puzzle and you didn't know until after you quit your job.

We don't know what you don't know right and if you've never taken the time to put that puzzle together know it. It's just no. 49 pieces in the box when there should be 50 so it's not that you necessarily would need an advisor. However, getting a second opinion getting a second set of eyes on what you believe to be the best possible thing for you and/or your family could be a great idea.

Correct the fear of the unknown Israel. And what we don't know can hurt us and that's why I encourage everybody to address these things to take a look at the amount of risk that you're taking the amount you are paying in fees how to maximize available sources of lifetime income like Social Security and pensions and how to translate and transition a lump sum that you saved into the rest of your foundation for retirement. We put that type of plan in writing for you. We do it on a complimentary basis. If you'd like to take advantage all you need to do is pick up the phone. Give us call 919-300-5886 in a number 919-300-5886. I've always enjoyed being here on the radio talk about how important this process and the planning is, I'm glad to have my wife Amber Rochon with me. I am Peter Rochon enjoyed the time as well. Look forward to hearing from you soon. 919, 300-5886 or talking with you again this week you're on planning matters radio planning matters radio