Financial Independence
We prefer to think of retirement planning as financial independence planning – determining the point at which your assets and other resources will be sufficient to satisfy your living expenses without regard to whether or not you continue to work. In fact, many of our clients continue to work, beyond when they must, because of the fulfillment and satisfaction they derive.
The planning process is best done in the context of a comprehensive, fully integrated plan. But even if you choose to focus initially on just one or two elements – say “retirement” and investment planning, our process always starts with you – your assets and resources, your goals and dreams.
Managing the Cash Flows
It’s been said that financial planning is about managing cash flows – living within your means so that you can set aside an adequate sum that when compounded over time will allow you to meet your future needs – financial independence. Our modeling will reveal whether you’re on track – the probability of you attaining your goal.
And, importantly, it will help determine what adjustments must be made. We can determine how enhancing your investment portfolio return can enhance your success. We can also explore whether reducing income tax is feasible and its impact. Other considerations might be extending your working years – continued, though possibly reduced earnings, or adjusting your income objective.
If you participate in company benefit plans, we’ll help you fully understand their role and allow you to take the fullest advantage of them such as by developing stock option exercise strategies. And we can help you manage the potentially significant outflows of college education for your children by identifying savings and other strategies.
Transition
Upon entering your 60’s, you’ll have several decisions to make, all important, some irrevocable. First, you’ll need to confirm the date at which you plan to stop working. With this comes 401k plan roll-over decisions and pension plan annuity option selection. What about company stock held in these plans, should you distribute and pay tax on the net unrealized appreciation? You’ll become eligible for social security at age 62; should you begin benefits, wait until full retirement at age 66 or 67, or delay until age 70? Medicare enrollment is yet another event.
Risk Management
Along the way you’ll be exposed to risks – the risk of a disability interrupting or ending your earnings ability or personal or family illness creating significant unplanned for medical expenses. In your later years, the need for long-term care is common. We’ll identify appropriate insurance coverage to protect against these risks, helping you manage cash flows and successfully accumulate and protect your wealth. Our goal is to help you face your future with confidence!
Questions to ponder:
- Has a financial model been prepared to help you quantify your goals? Do you know how much wealth is “enough?”
- Have you used a financial model to help you evaluate the impact of various personal financial strategies that you may be considering?
- Does your planning include safeguards against attack from litigation and judgments?
- Have the following lines of insurance been reviewed within the past 12 months?
- Property & casualty insurance
- Health insurance
- Disability insurance
- Life insurance
- Long-term care insurance
We can create a personal financial model depicting your assets, cash flow, income and estate taxes, both current and future. It will assist you in making informed decisions regarding your investment, business and estate planning.
Risk management is integral to the planning process and we will help assure yours is effective.
Would you like to start a conversation with us? Please contact us at advice@sagemarkpws.com.