The 3 Pillars of Successful Retirement Plans

A Simple Checklist to Kick-Start Your New Work-Free Life

If you’re within 5 years of retirement, you’re in a critical period – if you take action now, you may still be able to make up for past mistakes and have a successful retirement. The decisions you make now will define your retirement lifestyle and your ability to retire successfully. This checklist is designed to highlight your strengths and weaknesses for retirement preparation.

Go through each step of this checklist and take action. As you go, jot down any questions or concerns you may have and send them to me here. If you’re feeling overwhelmed and want some pro guidance, give my office a call to schedule a chat at the number below.

“A dream doesn’t become reality through magic; it takes sweat, determination, and hard work.” —Colin Powell

Pillar #1 – A Holistic Income Strategy of Successful Retirement Plans

I know how much I will need to cover my expenses each month in retirement (~80% of your current monthly budget is a solid estimate).
I have estimates for how much extra I will spend each year on travel, home improvements, gifts, medical care, and other one-off expenses.
I have a clear understanding of the guaranteed income I will receive from sources such as Social Security, pensions, annuities, veteran’s benefits, etc.
I understand that a retired couple could need $300,000+ to cover healthcare expenses after age 65, and my income plan accounts for those expenses.1
My income strategies account for inflation (if I need $100,000 this year, I will need ~$186,000 in 20 years to have the same quality of life at 3% inflation).
I understand all my Social Security options and how to maximize my guaranteed lifetime income.
My spouse and I have coordinated our claiming strategies to help maximize our income.
Our income strategy helps protect a surviving spouse from loss of income.
I have adequate liquid cash on hand for emergencies and unexpected expenses so that I’m not forced to liquidate investments.
A financial professional has looked over my income strategy to identify any problems or mistakes.

Pillar #2 – A Market Readiness Strategy of Successful Retirement Plans

“Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.” —Helen Keller

I have completed a risk questionnaire and understand all the risks I’m taking with my retirement savings.
I understand that my investing strategy will need to change in retirement so I don’t run out of money later in life.
My income strategy includes guaranteed income to help protect my lifestyle from market volatility.
I understand “sequence-of-returns” risk and that withdrawing too much when my portfolio has lost value can have a lasting negative effect on my retirement.
I have run multiple portfolio scenarios with different growth and inflation assumptions and am confident that my withdrawal needs are “safe.”
My income plan is flexible, and I’ve planned for the inevitable ups and downs of the stock market.
A financial professional has reviewed my market plan and assumptions to identify any problems.

Pillar #3 – A Forward-Thinking Tax Strategy of Successful Retirement Plans

“Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.” —Marie Curie

I have reviewed my strategies in light of recent changes in tax legislation to make sure I’m using every opportunity to potentially lower my taxes now and in the future.
I understand how Taxable, Tax-Deferred, and Tax-Free wealth buckets work, and my drawdown strategy helps maximize my after-tax income.
I understand that Medicare and Social Security depend on the future fiscal stability of the U.S.
I understand that the debt held by the U.S. is expected to break historical records by the 2030s (surpass 100% of GDP) and that my future tax rates are likely to increase.2
I am staying abreast of changing tax rules and working with a financial professional to proactively plan for future taxes.

Sources & Disclosures

1 https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs

2 https://thehill.com/policy/finance/541675-debt-to-break-wwii-record-by-2031

Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

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