20 PLANNING MATTERS - ARE YOU READY & EASTER WEEKEND

We want you to plan for success. Welcome to Planning Matters Radio. And welcome into the program. My name is Peter Rishon, founder and CEO at Rishon Planning.

This is Planning Matters Radio. Richonplanning.com is where you can go online to find more and I encourage, in fact, I ask and request that you go to richonplanning.com and right at the front of the website, before you really even get into anything, there's an opportunity for you to request a copy of my book, Understanding Your Investment Options. I think this is a great resource for anyone to get a good foundation in understanding the different choices that you have for placing your money. Anything from a checking account to a savings account. What's the difference? Why are there two different styles of bank accounts? All the way up to what is the difference between a bond fund versus a bond? What's an ETF versus a mutual fund?

What do you need to know about each in order to make an informed decision? So, thanks for tuning into the program and that's my request to get started. Go to the website richonplanning.com and request a copy of my book, Understanding Your Investment Options. Now, you can also go online, any of your favorite social media platforms and follow us. Just search Rich on Planning.

It's my last name, Richon Planning. Now, today I'm going to talk about a resource that I've put together. In fact, this is one of a series of resources that I have titled, The Countdown to Retirement and the resource that I am going to specifically talk about today is, are you ready to retire? How would you answer these 12 questions? And if you do have answers to these 12 questions, you should be pretty prepared for retirement.

The thing is, when I talk to a lot of people, they don't have great answers to these questions. So, we're going to go through that on today's program. If you would like a copy of this report, it's great to go over on your own time.

It's great to go over with your spouse, with your family, with your loved ones. Heck, if a co-worker is thinking about retiring in the near future, go ahead and give us a call, 919-300-5886. Request a copy of the Are You Ready to Retire report. Hand it to that co-worker.

I am certain they will find value in it and appreciate the fact that you have shared it with them. So, these 12 questions really indicate how prepared you are for retirement and for anyone thinking about making that transition or maybe even already retired. Really kind of essential items that you need to have covered and addressed here. So again, give us a call, 919-300-5886, and request a copy of the Are You Ready to Retire report. I do want to wish everybody a happy Easter weekend.

No, I am not live. No, I'm not working this weekend. This is a pre-recorded program, but give us a call and we'll get back to you as soon as we get back in the office, start of the work week next week and we'll get you anything you want, including if you'd like to sit down and get answers to these 12 questions for your situation. If you would like to actually put that plan together, it's another offer and opportunity that we present is if you would like a customized, individual, also complimentary, no cost, no obligation, plan for your financial future, looking at your savings, your investments, your financial situation, your retirement plan, looking at income, looking at taxes, looking at social security, optimizing all of those things. We do call it the optimized retirement plan and you're welcome to give us a call and request that time and opportunity. By the way, no need to meet in person. We are still cautiously optimistic about containing the virus and the vaccines that are available now.

More and more people are getting them, so we're excited about that, but we can meet in person cautiously or we can meet virtually. No real reason to hesitate, no benefit in procrastination, no cost, no obligation. Pick up the phone, give a call, request the Are You Ready to Retire series of reports. Go to the website richonplanning.com, request my book, Understanding Your Investment Options, or if you would like an individual plan, it's not a thousand pages of financial jargon, it's simple, easy to understand language that you can act on in order to achieve your financial goals.

Give us a call, 919-300-5886, 919-300-5886. Once again, happy Easter weekend everybody, maybe the most important part of this entire program right there. Jumping in here, Are You Ready to Retire? How would you answer these 12 questions? And having your answers to these 12 questions really is going to indicate if you are truly prepared for retirement. Now, lots of people would say, I'm so ready to retire, right?

But that's kind of the mental, emotional side of it. Gosh, I really am ready to retire. I'm tired every day when I get up. I'm sick of my job.

I don't love it or enjoy it like I used to. I'm just ready to retire. But does that mean that you are financially prepared to face the 25, 30, 35 years of unemployment that is to follow? If you have a certain amount in your 401k, your retirement savings accounts, you've hit a number in your head, congratulations. If you are nearing a certain age that you've always sort of mentally earmarked as the age that you will retire, you're getting there. But neither one of those arbitrary numbers, a lump sum or a specific age that you have thought of in your head, neither one of those truly indicates if you are financially prepared for retirement.

And there's a big difference there. Mentally, emotionally, are you ready to retire? Maybe many of us are. And that's not relegated to those that are 59 plus. There could be some 35 year olds out there that just feel like they are ready to retire. But are they financially prepared? Are you financially prepared? That's where you need these answers to these 12 questions to know are you truly prepared? Are you ready to retire? So question number one, without further ado, let's get into the list here. Do you know how long you would be able to generate the income you need if your paycheck stopped today?

Now, the wording of all of these questions is pretty specific and important. This one is great to think about for retirement, but it's equally as important no matter where you are in your working career. If your paycheck stopped today, do you know how long you could generate the income that you needed to support your expenses and your standard of living? Everyone needs an emergency account. Three to six months worth of expenses in case your employer, in case your job, in case your paycheck suddenly stops.

Your employer says, hey, we no longer require your services. And then you've got to go out and search for new employment, new means to earn an income, and you need something to float you for a few months. That's really what that emergency account is about. That and unexpected expenses that come up. But three to six months worth of expenses, that is why we have the checking and the savings account. The checking account, again, I explain it in my book, Understanding Your Investment Options. It's more about day-to-day expenses. That's where the transactions happen. But the savings account, that is the in case of emergency. And we want to keep at least three to six months worth of expenses there in case at 30 years old, at 40 years old, at 45 years old, we are laid off or unexpectedly find ourselves out of work. And it's not just laid off.

Slips, trips, accidents, injuries, they happen all the time. And for many of us, that means that we're out of work for a period of time, not earning an income, not working, not having a paycheck. Medical insurance, that covers the doctor's bills. But how do you cover your bills? You need to have thought of this question and your answer to this question no matter where you are at in your working career. But especially if you are thinking that you might walk away from the paycheck intentionally at some point in the future, you need to think about how do you know and do you know how long you would be able to generate the income you need if your paycheck stopped?

If your paycheck stopped today, if your paycheck stopped tomorrow, if your paycheck stopped 10 years from now, do you know how you're going to generate the income? Number two on the list, and now this gets more into specifically planning for that retirement. Have you identified and calculated your retirement income gap?

Now this is a term that not everybody is familiar with. The retirement income gap is a mathematical formula that is going to help you arrive at a conclusion of what that arbitrary number is, that retirement number, the lump sum that you need in order to be able to retire confidently. The retirement income gap, again, is a mathematical equation. And what we do is we start with your expenses. I encourage all of my clients to do what I call the look back budget. Now many clients come in with a budget and that's fantastic. They understand what their expenses are. But a lot of times I find that the budget that people keep is kind of a line item budget of their obligations. That's subsistence living.

This is the bare minimum that they need to survive. Their mortgage payment, their car payment, their electricity bill, their cell phone bill, their cable. All of the things that they need, food is budgeted in, maybe travel is budgeted in.

All of the things that they need in order to have a subsistence standard of living, in order to sustain those expenses. That's in the line item budget. But I encourage even folks who do the line item budget to do what I call the look back budget. Most of our expenses generally come from kind of one central account. That's where we pay the credit card bill at the end of the month if you use a credit card. That's where we pay the mortgage payment. That's where we pay for all of the expenses that we have. And I like my clients to pull those statements from that central account for the last, at least six, up to twelve months and look at how much they have spent. Let's tally it up. Let's keep a track record of twelve months worth of actual spending.

What has gone out? And you don't have to comb through every time you spend money. You have to look at the front cover. There's four numbers. There's beginning balance, credits, debits, and ending balance. The debits is really what we want to look at there. That's how much you've spent. And that's, by the way, that's a net number. So if we're shooting for continuing to maintain that, we've got to also factor in taxes before that, right, if we're planning for retirement. But we take that debit number and we average that out over twelve months. That's your monthly spend rate. That's what it costs to support your average standard of living.

Now it's going to have some fluctuations. Some months will be higher, some months will be lower, but let's get that average. And then let's subtract any sources of guaranteed lifetime income that you do not need to generate from your personal assets.

So what are those? Social security, pensions, those are the two big ones. And a few people might have some additional ones in there, but for most people, it's social security alone.

For a few lucky ones left, they also have a pension in there. And then on a rare occasion, exceptions, people may have a business partnership, some residual income, some rental income, things like that that we can factor in there. But this is not generated by your portfolio.

That's the point. These are sources of income that you can count and rely on in retirement that you do not have to generate from your personal assets, from your retirement accounts, from your investments. You subtract those from your average monthly investing. That is your monthly income gap. That number represents what you will have to generate from your personal investment and retirement accounts.

So this is a mathematical problem, right? We're doing math here, and we're figuring out how much does my portfolio need to generate on a monthly basis. And then we can figure out on an annual basis. And then we can figure out, well, if that's what I need, how much do I actually have to pull? Factoring in taxes, factoring in inflation, and then factoring in over the course of 20, 25, 30 years, what's that represent as far as a cash flow of some lump sum? And now we begin to drill down on what is my retirement number, right?

This is the question that a lot of people have. How much do I need to have to retire? Well, it begins with this math problem about figuring out your retirement income gap.

And if you'd like some help in sitting down and figuring this out, if you'd like to comb through these numbers, if you'd like to have this list of these 12 questions so you can think about this on your own time, pick up the phone, give us a call. Happy to talk to you, and I'd seriously like to help anyone who is planning for their financial future who is willing to dedicate a little time to it. So I don't have account minimums. I don't require that you have a certain amount to invest to get some guidance, to get direction, to get answers to your questions. What I do request is that you're serious about your planning and your financial future. You've got to take this more seriously than I do in order for you to be successful. But you don't have to become a full-time financial planner in order to have financial success and confidence. You do need to dedicate a little bit of time to it and get a plan put together. So if you'd like this list of the 12 questions to answer to know if you're ready to retire, if you'd like an optimized retirement plan, pick up the phone, give us a call at Rashaan Planning, 919-300-5886.

919-300-5886. Moving on on the list. Do you know how much you have available in discretionary assets above what you will need to generate retirement income? Question number three. Now, again, the wording of this question is important. Do you know how much you have in discretionary assets above what you'll need to generate income? So it requires answering question number two in order to have an answer to question number three. But question number three is what gives us financial security and confidence.

It's not meeting those subsistence items, just a baseline standard of living. It's being able to do that and then knowing that you have extra, additional money sitting on the side. That's your security blanket. That's your spending money. That's your bucket list money.

That's your wild money. That's your enjoyment of life in retirement. We want to identify what we have there to take trips, to buy gifts, to do the extra things, to go out to dinner, buy a nice steak every once in a while, go on date night with our spouse, travel around and do the things that we always envisioned retirement to be about. That's question number three. And, by the way, in answering questions number two and three, we begin to identify what we need to be a little bit more conservative with and what we could be more aggressive with and continue the investment approach and mentality that we always had during our working career when we had the paycheck to support the investment account and the investment risk that we were taking with it. So, again, some questions here that really formulate the basis of your answer to are you ready to retire. Question number four. Do you know if your portfolio is properly diversified to provide enough growth, safety, liquidity, and income? And those are the four basic things that money can do for us.

Right? We think that, oh, money can do a lot except buy love and happiness. Money can't buy love and happiness, but not having money doesn't help in those areas either. But you think that, oh, money can do a lot of different things. Really, it boils down to four things. Growth, safety, liquidity, and income.

And with any one dollar, you have to pick which two are important to you. This is what true diversification is about. When I have a client or a saver or an investor come into the office and I ask them, what do you want your money to do for you?

It's typically one of these four answers. And we hear a lot about diversification. Large cap, small cap, mid cap, domestic, international. I've never had anybody when I asked them that question, what do you want your money to do for you? Well, I need more large cap.

Well, I need more small cap. Well, I need more fixed income in my portfolio. You know, the income component, that I have heard. But it's not about the typical model of diversification that you hear about inside that investment portfolio. Here's what we need diversification for. We need growth, we need safety, we need liquidity, and we need income. So do you know if your portfolio is properly diversified to provide enough of each one of those? Because any one dollar can only do about two of them. But we need all of them. So we've got to segment our portfolio and assign dollars specific jobs and tasks to perform for us in order to have an effective financial foundation.

Question number five. Do you hold annual reviews of your plan to assess if you have met previous goals and to set new goals and benchmarks? A lot of people probably listening to the program, watching the podcast, maybe if you reflect on that question, you don't even recall the last time you've sat down and done a real review and assessment. You don't remember the last time you heard from your financial advisor or the person that you count on for financial guidance. And if that's the case, you owe it to yourself to get a review and to sit down and look at things.

Even on your own time, just sort of saying, where am I at? Getting a snapshot. And then what do I want to achieve and accomplish in the short term, in the intermediate term, in the long term? That is, again, one of the advantages of the optimized retirement plan. This is not a thousand pages of high level financial jargon that is over most people's heads. You don't have to be a financial professional to understand the language in the optimized retirement plan. It is simple, easy to understand language, concise, consolidated steps that you can take. It begins with a snapshot of where you are currently, a discussion of your goals, writing those down, documenting them so we know that we're working to achieve them, and then recommendations on how to achieve them, how to turn those goals into future realities.

Actionable items and recommendations that you can execute on in order to work a timeline toward achieving those goals. And if you would like that optimized retirement plan, no cost, no obligation. Again, all you need to do is pick up the phone and give us a call at Rashan Planning, 919-300-5886, 919-300-5886. That plan, the optimized retirement plan, really will go a long way in answering these twelve questions to know if you're ready to retire.

And again, if you'd like just the list to go over on your own time or my book, Understanding Your Investment Options, you're welcome to call and request those as well. I'll make that offer for the first ten callers on today's program. You can get a copy of the book just by calling. You can also go to our website, richonplanning.com is what it looks like, rashanplanning.com, and anyone can request a copy of the book there. You'll get it digitally in an emailed version right to you.

You can download it digitally. But if you'd like the physical copy for the first ten callers to the program, I'll mail you out a physical copy of Understanding Your Investment Options, 919-300-5886, the number to call, 919-300-5886. Or again, the list, go over it on your own, go over it with your spouse, with your loved ones, with your family. If you've got a coworker who's mentioning, hey, I'm retiring in the near future, request a copy of this list and hand it to them. They will thank you. They will appreciate it. So, it's a great resource to just get you thinking and you really do need to have answers to all twelve of these questions in order to make that big transition, make that leap and jump into retirement with confidence.

919-300-5886. Almost halfway through here, question number six. Have you formulated a plan for how to use Social Security to maximize income and protect personal assets? We can't really have a conversation about retirement without talking about Social Security, right? Social Security is an important part. But a lot of people have kind of a set paradigm and thought on when and how they're going to claim and collect Social Security.

And there's sort of two schools of thought in the financial world that people are being told and taught is one, hey, the building's on fire. You better run out and get it as soon as you can. The day you turn 62, get it while the getting's good. And then the other school of thought is wait all the way until 70 to maximize your benefit and get the most you can. Neither one of those, neither one of those is universally correct. It's all on a case by case basis.

It's very individual. But listen again to the wording of this question, how it's phrased. Have you formulated a plan for how to use Social Security to maximize income and protect your personal assets? That's what Social Security is really for. In fact, Social Security was intended originally to prevent poverty among the senior population.

It is an anti-poverty insurance. And I laughed when people said, oh, the government can't force us to buy insurance several years ago as the Affordable Care Act and Obamacare was rolling out. Oh, the government can't force us to buy insurance.

Yes they can. They've been doing it since 1935 with Social Security. That's exactly what Social Security is. It's a form of long-term anti-poverty, anti-disability and elderly care insurance. And it was meant to simply keep you at a subsistence level slightly above the poverty line. It's not meant to cover everything in retirement. However, about 40% of the American population, it is their only form of retirement income.

We need to do a little bit better job. But for many of us, it's not the only thing. But what we want to use Social Security for is to protect our personal assets as much as possible. So maybe running out and getting it at 62 is the right thing.

There's some big gotchas there if you do. You're going to lock in a permanently lower benefit for life. If you're claiming and collecting before your full retirement age, somewhere between, nowadays it's like 66 to 67, very few people whose full retirement age, it used to be 65, but that age group, they phased it up to a higher age and that age group pretty much these days has already begun claiming and collecting. But if you work and you're earning an income and then go to collect Social Security before that full retirement age, the government deems you as double dipping and they will penalize you.

So there are some things to know if you're going to rush out and get it. And the folks down at the Social Security Administration Office, they're not there to provide guidance or advice or education. They do not know the rest of your financial situation, therefore they are not taking on the liability of providing you recommendations and guidance on how to claim and collect. Their job is to file the paperwork for you on the day that you show up or request your benefit, not tell you if that's the best day to request your benefit. And so part of the optimized retirement plan is a Social Security report and analysis showing you some different strategies and some ways to optimize your benefit. The difference in a poor decision on timing Social Security versus a well thought through decision can be 50, 100, 150, sometimes several hundreds of thousands of dollars over the lifetimes of an individual or especially a couple. And so you really need to think this one through and ultimately the impacts of your decision on when and how you begin to claim and collect Social Security will be felt toward the end of your life or even after your own lifetime will be felt and will affect your spouse if you were to predecease them.

So this is something really we are short sighted a lot of times with our decisions but it is well worth the time and investment, again, sometimes several hundreds of thousands of dollars difference in when you choose to claim and collect. And that's money that you either have to have and generate from your personal savings and investments or you get from Social Security and I know which one I'd rather do. They call it an entitlement, right?

And that's sort of, I don't know why people have a problem with that word. I am entitled to Social Security because I paid into Social Security. I am entitled to that money because it's mine and I want it back and I want as much back as I can get and in fact I expect to make some kind of return on investment now whether that's going to happen, pretty questionable.

But I am entitled to that and I want to make the most of it. So a little bit of time dedicated to educating yourself on this important decision, well worth that time and we're happy to do that. Run some numbers, crunch the scenarios for you, give that report and analysis as part of the optimized retirement plan. Give us a call, 919-300-5886. There are 12 questions on this list. Are you ready to retire?

Are you prepared? And if you'd like the full list, give us a call, 919-300-5886. Again, we're happy to email this out to you or send it out to you, get it in your hands.

You can go over it on your own time. I'm not going to have time to get to all 12 of these questions and discuss them in depth on today's program but I do want to hit one more on the list which is a big question and concern that I'm hearing a lot about today and that's do you understand how much you'll be paying in taxes in retirement and how much of your retirement account withdrawals you will get to keep? Taxes are a big, big, big topic right now. If you've got a dollar that you're earning, if you've got a dollar saved in a retirement account, you understand that taxes are a factor.

If we earn income, if we save money, if we grow money, there is not a dollar saved, grown, created, transacted that the IRS does not have some kind of plan for how to tax. And the discussions right now are that those tax rates are probably going to get more aggressive that taxes are going up. And so prudent savers and investors, those that are proactively thinking about the future want to control that tax liability to the greatest extent possible and there are strategies available to do that.

Taxes are an unknown and any individual one of us cannot control what is going to happen with taxes into the future but we can control how we are affected by tax law changes. And the larger your retirement account, the more costly of a mistake and an oversight it is for you not to address this issue today. While taxes are known, while taxes are low, while taxes are on sale, let's be proactive and strategizing on how to control that lifetime tax liability, not just what we're paying on the money that we earned last year. And again, as I talked about with social security, the difference in proper timing of social security or optimizing your decision versus poor timing can be several hundreds of thousands of dollars. Taxes are likely our largest known expense in retirement.

And the difference in defaulting to the IRS's plan versus being proactive, optimizing your strategies, being efficient with your money can be several hundreds of thousands of dollars of your money that you just get to keep or that goes to the IRS over the course of retirement. The time to plan and strategize on this is now. And again, part of our optimized retirement plan.

A lot of information packed in but never enough time on the program. Once again, happy Easter to everyone. The most important part of this weekend, obviously, but here if we're planning for our financial future, these questions, these 12 questions on this list, one of the series of resources in the Countdown to Retirement Report, the very first one is the Are You Prepared? Are You Ready to Retire? List of 12 questions. If you'd like to get this list, pick up the phone now, give a call, 919-300-5886. If you would like an optimized retirement plan, including the social security report and analysis, including the tax analysis and discussion of tax saving strategies, a snapshot of where you are, a discussion of your goals and then recommendations on how to achieve those, again, pick up the phone, give us a call, 919-300-5886. First 10 callers to the program will get a copy of my book, Understanding Your Investment Options, or again, you can go online and you can get the copy of Understanding Your Investment Options in digital form at richonplanning.com.

That's rashanplanning.com. I look forward to helping you. I look forward to hearing from you.

If you are serious about your planning and your financial future, I'll give you straight answers to your questions and make sure that you have the information to make well thought through and informed decisions. I am Peter Rashan, founder, CEO at Rashan Planning and look forward to helping you in any way we can. Thanks for tuning in to Planning Matters Radio. Before we go, again, follow us on social media. If you're watching the podcast today, be sure to click the buttons, like, subscribe, ring the bell, share this with your friends and neighbors, loved ones that may need this information. We look forward to hearing from you soon, helping you any way we can.

Take care. This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to seek investment, tax, or legal advice from an independent professional advisor. Any investments and or investment strategies mentioned involve risk, including the possible loss principle. Advisory services offered through Brookstone Capital Management, a registered investment advisor. Produciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding compensation.