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Planning Matters Radio / Peter Richon
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April 8, 2021 1:47 pm


Planning Matters Radio / Peter Richon

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April 8, 2021 1:47 pm

Are you ready to retire? Peter Richon covers 12 must-answer questions to know if you are financially prepared to walk away from your paycheck and transition into retirement.

Finishing Well
Hans Scheil
Family Life Today
Dave & Ann Wilson, Bob Lepine
Rob West and Steve Moore
Family Life Today
Dave & Ann Wilson, Bob Lepine
Finishing Well
Hans Scheil
Rob West and Steve Moore

You plan for success. Welcome to planning matters radio program shone down on planning you rich on is where you go online and I asked to request Rich on and right at the front of the website where you really get into anything. There's an opportunity for you quest a copy of my book. Understanding your investment rate foundation understanding have leasing anything from a checking account or savings account. What's the difference why are there two different styles of bank accounts all the way up to what is the difference in a bond fund, bond, CF fund, you need to know about in order to make an informed decision. So things are turning into the program and that's my request to get started, go to the website rich on 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 my last name Rochon planning. Today I'm going to talk about a resource that I 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 thing is when I talk to a lot of people.

They don't have great answers to these questions. So 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 echo coworker 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 to the coworker.

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 are 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 know I'm not live. No I'm not working this weekend. This is a prerecorded program but Doug give us a call in and will get back to you as soon as we get back in the office start of the work week next week and will 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 another offer an opportunity that we present is if you would like a customized individual, also complementary. No cost no obligation plan for your financial future. Looking at your savings, your investments, your financial situation.

Your retirement man looking at income looking at taxes, looking at Social Security optimizing all those things we do call it the optimized retirement plan welcome to give us a call and request that time an opportunity. By the way, no need to meet in person. I we are still cautiously optimistic about containing the virus and and the the vaccines that are available now and more more people are getting him so were were excited about that.

But we can meet in person cautiously or we can meet virtually so. Note no real reason to hesitate no benefit in procrastination no cost no obligation pick up the phone. Give a call request to the are you ready to retie her series of reports go to the website rich on request my book. Understanding your investment options or if you would like an individual plan, not a thousand pages of financial jargon is 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 at their soap 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 I really am ready to retire. Tired every day when I get up am sick of my job.

Don't love it or enjoy it like I used to just ready to retire but does that mean that you are financially prepared to face the 2530 35 years of unemployment. That is to follow if you have a certain amount in your 401(k), 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 are 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.

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+ there could be some 35 shows how therapy 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 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. You know how long you can generate the income that you needed to support your expenses in your standard of living. Everyone needs an emergency account.

3 to 6 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 gotta go out and search for new employment.

New 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 3 to 6 months worth of expenses.

That is why we have the checking in the savings account checking account again 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 is the in case of emergency, and we want to keep at least 3 to 6 months worth of expenses there in case at 30 years old at 40 years old, and 45 years old I we are laid off or unexpectedly find ourselves out of work and it's not just laid off slips, trips, accidents, injuries happen all the time and for many of us that means that were out of work for a period of time not earning an income not working. Not having a paycheck medical insurance that covers the doctors bills. But how do you cover your bills you need to have thought of this question in 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 your paycheck stopped today. If your paycheck stopped tomorrow if your paycheck stopped 10 years from now you know how you can 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 the conclusion of what that arbitrary number is that retirement number.

The lump sum that you need in order to be able to retire confidently 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 fantastically 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 subsistence living. This is the bare minimum that they need to survive their mortgage payment. Their car payment. Their electricity bill. Their cell phone builder cable all of that, the things that they need food is budgeted in maybe travelers budget in all of the things that they need in order to have a subsistence standard of living in in order to sustain those expenses.

That's in the line item budget Brian 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 is 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 12 months and look at how much they have spent let's let's tallied up.

Let's keep a track record of 12 months worth of actual spending what has gone out and you don't have to comb through every 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 that.

That's how much you spent and that's by the way, that's a net number so for shooting for continuing to maintain that we got also factor in taxes before the writer for planning for retirement, but we take that debit number and we average that out over 12 months.

That's your that's your monthly spend rate. That's what it cost to support your average standard of living now is going to have some fluctuations a month 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 order those Social Security tensions. Those are the two big ones. A few people might have some additional ones in there, but for most people it Social Security alone for a few lucky ones left. They also have a pension and there and then on a rare occasion. Exceptions people may have a 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. You do not have to generate from your personal assets from your retirement accounts from your investments, you subtract those from your average monthly spending that is your monthly income gap. That number represents what you will have to generate from your personal investment and retirement account so this is a mathematical problem right we were doing math here and were figuring out how much does my portfolio need to generate on a monthly basis and we can figure out on an annual basis and then we can figure out well if that's what I need, how much you actually have to pull factoring in taxes.

Factoring in inflation and then factoring in over the course of 2025 30 years.

What's that represent as far as a cash flow of Psalm 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 will 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 like to comb through these numbers like to have this list of these 12 questions that you can think about this on your own time. Pick up the phone. Give us a call. Happy to talk to you and I 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 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 your financial future, you gotta 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 like this list of the 12 questions to answer. To know if you're ready to retire. If you like and optimize retirement plan, pick up the phone. Give us a call at Rochon 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 important. Do you know how much you have in discretionary assets above what you need to generate income so it requires answering question number two in order to have an answer to question number three. The 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 your spending money that 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 by a nice steak every once in a while go on date night with our spouse, travel around and do the things 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 needs 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 all money can do a lot, except by 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 all money can do a lot of different things really boils down to four things growth, safety, liquidity and income and with any one dollar have to pick which two are important to you.

This is what true diversification is about when I have a client or savor an investor come into the office and asked them what 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 you want your money to do for you. I need more large-cap.

Why need more small-cap will I need more fixed income in my portfolio is that 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 portfolios 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 got a segment or 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 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 and look at things even on your own time disorder saying where am I at getting a snapshot and 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 optimize 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 optimize 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 were 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. If you like that optimize retirement plan, no cost, no obligation again.

All you need to do is pick up the phone and and give us a call at Rochon planning 919-300-5886 919-300-5886 that planned the optimize retirement plan really will go a long way in answering these 12 questions to know if you're ready to retire and again if you 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 10 callers on today's program you can get copy of the book are just by calling.

You can also go to our website rich on is what looks like Rochon and anyone can request a copy of the book there you get it digitally in an emailed version right to you and you can download it digitally.

But if you like the physical copy for the first 10 callers to the program allow mail you out a physical copy of understanding your investment options 919-300-5886 the number call 919-300-5886 Oregon the list go over it on your own. Go over with your spouse with your loved ones with your family. If you got a coworker who's mentioning hey I'm a tyrant and in the near future.

Request a copy of this list and and handed to them. They will thank you. They will appreciate it.

So it's it's a great resource to just get you thinking and really do need to have answers to all 12 these questions in order to make that big transition make that leap and jump in the 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's important part but a lot of people have kind of a set paradigm and thought on when and how they're going to claim collect Social Security_two schools of thought in the financial world that people are being told in and taught is one hey the buildings on fire you better run out and get it as soon as you can. The day you turn 62 get it while the getting is good and the other school of thought is way all the way till 70 to maximize your benefit.

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 is very individual but listen again to the wording of this question how it's phrase 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 is an anti-poverty insurance. I laughed when people said all the government can't force us to buy insurance. Several years ago as the affordable care act and Obama care was rolling out all the government can't force us to buy insurance yes they can. They been doing it since 1935 with Social Security. That's exactly what Social Security is, is 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 that 62 was the right thing.

There is some big gotchas there. If you do your gonna lock in a permanently lower benefit for life. If your claim on collecting before your full retirement age somewhere between nowadays it's like 66 to 67 are very few people whose full retirement age used to be 65 but that's that age group. They phased it up to a higher age. In that age group pretty much these days has Artie begun claiming collecting but if you work and your earning an income and then go to collect Social Security before that full retirement age. The government deems you is double dipping, and they will penalize you so there's some things to know if you can 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 jobs 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 optimize retirement plan is a Social Security report analysis showing you some different strategies in some ways to optimize your benefit. The difference in a poor decision on timing Social Security verse. A well thought through decision and be 50, 100 hundred and 50, 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 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 shortsighted, a lot of times with our decisions, but it is well worth the time and investment again sometime 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.

I know which one I'd rather do they call it an entitlement right and that sort of people. 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 back and I want as much back as I can get.

And in fact I 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 night. 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 were happy to do that run some numbers crunched the scenarios for you give that report analysis as part of the optimize retirement plan.

Give us a call 919300586919300586.

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 will 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 if you got a dollar that your your earning if you got a dollar saved and 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 those tax rates are probably going to get more aggressive. The 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 in 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 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 were paying on the money that we earned last year and again as I talked about was Social Security the difference and 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 a keyboard that goes to the IRS over the course of retirement. The time to plan and strategize on this. It is now and again part of our optimize retirement plan so 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 here for planning for our financial future. These questions, he 12 questions on this list. One of the series of resources and the countdown to retirement.

The very first one is the are you prepared are you ready to retire. List of 12 questions. If you like to get this list pick up the phone now give a call 919-300-5886 if you would like and optimize retirement plan, including the Social Security report and analysis, including the tax analysis and end discussion of tax saving strategies. A snapshot of where you are. A discussion of your goals and recommendations on how to achieve those again pick up the phone.

Give us a call 919-300-5886 first $10 to the program. 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 that's Rochon I look forward to helping you. Look forward to hearing from you. If you are serious about your planning 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 Rochon founder CEO at Rochon planning and look forward to helping you in any way we can. Thanks return into planning matters radio before we go again. Follow us on social media. If you watch the podcast today. Be sure to click the buttons like subscribe ring the bell shared this with your friends and neighbors love ones that may need this information. Look forward to hearing from you soon helping get away 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 is 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 commission, which may result in a conflict of interest regarding

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