What a Retirement Planner Does
A good retirement planner should work closely with a client to determine how much money they will need to have accumulated in order to stop working. All assets, plus Social Security, pension, and all income should be added, while taxes and inflation should be subtracted.
The Four Foundations of a Retirement Plan
As a retirement planner, Decker Retirement Planning, Inc., endeavors to help identify any weaknesses in a retirement plan by going through the following four areas to try to uncover anything overlooked, eliminate any problems before they might occur, and put all the pieces in place to cover the unexpected.
- Income Planning
A lot of people erroneously think they will need less money once they retire. But in reality, we find that people typically need 20% more. When you’re working, you don’t have as much time—you’re busy. When you retire, you suddenly have time, and you want to do the things you may not have had time for like travel, dining out, or redecorating. Doing these activities costs money.
A good retirement planner will work with you to try to make sure that you have budgeted correctly, and that you know mathematically, realistically, what you’re looking at in terms of income every month. Income planning is key.
- Tax Minimization
A retirement planner, especially a fiduciary, needs to provide a way to help with tax minimization, including the following:
- Examining your tax returns line-by-line for potential savings.
- Considering IRA to Roth conversions as well as RMDs (Requirement Minimum Distributions).
- Transferring assets to beneficiaries in the most tax-efficient manner.
- Creating foundations or other structural entities to reduce income taxation.
3. Risk Reduction
A retirement planner like Decker Retirement Planning, Inc, could help you reduce your risks, including some of the following:
- Stock market risk like we saw in 2008.
- Long-term care risk (or death of a spouse), which may severely impact finances.
- Liability risk in a litigious society.
- Inflation risk, which has been severely underreported in terms of the items retirees actually need to purchase.
At Decker Retirement Planning, Inc, we encourage everyone to make sure that they have a good balance between investments and liquidity. You want to make sure that you’ve got the liquidity, so that when life happens, you have the money available that you need to handle the new roof, the new car, the replacement water heater—or whatever life brings your way.
For more information on these important retirement topics, read the transcript: Protecting Yourself From the Problems of Retirement or listen to the original radio show here.