Income Risk Fees Costs Taxes

November 2014: Back to the Basics

In Back to the Basics, Estate Planning, Income Planning, Investment Management, Long Term Care, November 2014, Social Security by Adam Cufr

Back to the Basics – Are You Following a Proven Recipe For Your Retirement?

This article of Adam’s appeared locally in the Suburban Press On November 15th.
We thought you might enjoy reading it here in The Steward.

With the holidays approaching, you may be planning to bring to life some of your favorite family recipes. Maybe it’s the pie your grandmother lovingly prepared each Thanksgiving or the side dish that is the perfect complement to your family’s Christmas meal. Can you imagine the disappointment if you neglected an ingredient or mis-calculated the baking time, only to end up with something that only resembled the item you so looked forward to?

As the year comes to a close, many people will reflect on the time that has passed and also look ahead to future days. This can be a great opportunity to review your financial and retirement plans. Just like a family food recipe requires all the correct ingredients to delight, a retirement plan without all of the essential elements can leave you with an experience that isn’t quite what you’d hoped for. Retirement planning, like cooking, requires adherence to a time-tested recipe. Cutting corners just doesn’t satisfy.

As you consider your retirement and the financial wellness of the family that you may be surrounded by this season, ask yourself whether you’re doing all that you can to ensure you’re including all the right ingredients.

Although I don’t have enough space to cover all of the necessary ingredients, here are some to consider in your successful retirement recipe:

If you’re currently employed, are you making the best use of your income to maximize debt reduction and retirement savings options? Are you fully benefitting from any company matching contributions in a company-sponsored retirement plan?
If you’re retired or nearing retirement, are you absolutely confident that you know how to convert your nest egg into a retirement income that you will not outlive? Have you considered the effects of inflation, taxes, and medical costs in your retirement income plan?

Risk and Fees:
Are you aware of the various risks you’re taking in the investment accounts you may have? For example, did you know that rising interest rates may have a damaging effect on the bond funds in your retirement plan, the very funds that you have always considered to be your “safe” investments?
Do you know how much you’re paying in hidden costs and fees for the investments you own? Excess fees contribute directly to less money for your retirement, yet alarmingly few people have even a clue of what they’re paying.

If you retire in a 25% tax bracket, Uncle Sam effectively owns 25% of your life savings. Have you considered forward-looking tax strategies that may allow you to take back more of what you’ve saved for your future and your family’s future?

Medical and Nursing Costs:
Even the best-funded retirement plans are at risk if a long-term medical need arises. Have you considered how you will pay for an average year of a nursing home stay in Ohio, approximately $73,000 and rising?

It is extremely rare for a financial do-it-yourselfer or a family that is receiving little attention from their financial advisor to have fully-considered all of these and a dozen other critical questions. In fact, it is overwhelmingly common for many ingredients to have been neglected entirely in the retirement recipes we see regularly.

As the holidays approach, consider how you might make this the year that you take control of your financial future and follow a proven recipe for a successful retirement and a lasting legacy. If not now, when? If not you, then who?