Category: Personal Finance


Critical Decisions in Your Retirement Planning

June 22, 2018

Personal Finance

Comments Off on Critical Decisions in Your Retirement Planning


Retirement Planning may be looked at as having two distinct phases; the Accumulation Phase and the Distribution Phase. Let’s take a look at both.

The Accumulation Phase is the period of time between starting your working career and your ultimate retirement. This is the time when you set money aside for future use. This money, when combined with Social Security and a company retirement plan (if any), will provide the income after you stop working. We can debate the “best” way to accumulate retirement dollars until the cows come home and never reach a conclusion. Asking the questions about should I invest in mutual funds or the market, or should I focus on guarantees with CDs, money markets, annuities or permanent life insurance can and should be answered with a resounding YES! After all, the alternative is not accumulating anything at all. Each savings or investment product has plenty of merit and each has ample drawback. There is no one right answer, but there are abundant “next right answers”. If indecision leads to inaction in your accumulation phase the results will be foreboding. Consider using some of each and develop a plan that fits your comfort zone.

The Distribution Phase is the period of time between the end of a working career and, well… the end. The concern here is that we have no idea how long a time that will be. So, we run the risk of a) running out of money before running out of time, or b) not enjoying our retirement lives because we are holding onto our money in fear of running out. The key issue in the distribution phase is having a plan that will account for, as best we can, how long our money can last, the income that we may enjoy from that money and steps we may take to assure that we will enjoy retirement without worry about running out of money. After all, once you hit retirement the paychecks are in the rearview mirror. Every plan needs to make sure there is a guaranteed source of income that cannot be outlived. An income at the very least that will cover living expenses: food, utilities, shelter and clothing. So, not to put too fine a point on this, some of your retirement money should find its way into an annuity.

Putting the two phases together to achieve a retirement income goal requires action, determination and ongoing attention. This is an activity that should not be postponed regardless of which phase you may be in currently. Retirement planning needs to be proactive, taking the action to pay “you” first and to consider and plan for life’s contingencies. Otherwise, you may be dependent on the “Blind Squirrel” strategy. That being… even a blind squirrel will occasionally find a nut.

7 Essential Ingredients for Your Best Financial Recipe

June 22, 2018

Personal Finance

Comments Off on 7 Essential Ingredients for Your Best Financial Recipe


When my mother was forty-three, she was divorced after twenty-two years, and five boys – and I’m number two.

In the settlement, she received a lump sum of money. She lamented, “What am I going to do now? I have never had to make financial decisions on my own, and now I have this money and I have to make it last a lifetime!”

I asked her, “Well, what are you going to do now with your half of the settlement?”

“I am not going to make any financial decisions right now,” she answered. “I’m just going to put all my money in the savings account at the bank until I figure out what to do.”

Years later, I realized that not making a decision was a decision. And it was not a good one.

Whether you believe the challenge of financial planning necessary, interesting or overwhelming, not creating a plan, is indeed creating a plan.

What are the essential elements of financial planning? What are the ingredients that you will need for your financial plan? There is more to financial planning than just how much money you have. The best plan for you contains so much more.

In order to create your financial recipe, you also have to look at these seven essential ingredients to create the best plan. To help all better remember them, here is a fun acronym. You have to start with A RECIPE.

A Desire to Leave a Legacy
Recognizing the Need for a Plan
Evaluating your Wants, Needs, Goals, and Desires
Courage For The Journey
Investments
Professional Management Team
Estate Documents Needed

A Desire to Leave a Legacy

When your assets transition to loved ones, this will be your last statement to them. They will remember if you transitioned love, knowledge and understanding, or if you transitioned angst, frustration and confusion.

Recognizing the Need for a Plan

How do I create my legacy? With a plan! We have all heard this before, if you fail to plan, then you plan to fail. The same is true with your financial planning. You must plan to succeed!

Evaluating your Wants, Needs, Goals, and Desires

Where do I start with my plan? Write down your goals and your dreams. Compare this with your wants and desires. Prioritize your bucket-list and you have just begun your
plan!

Courage For The Journey

Even the best plans falter. We all know the world and the economy are unpredictable. But if the economy as we know it continues, then downturns really present strong opportunity. You have to have courage to capture that opportunity.

Investments

The best way to outpace inflation and increase purchasing power is with diversified investments. They are needed in your recipe and need to be understood.

Professional Management Team

Once you have your plan in place and have identified your goals and dreams, then you need to assemble your professional management team. Like sport teams need a coach to bring together all the strengths of the players, your team will bring together your unique bucket-list and coordinate a path to success.

Estate Documents Needed

The federal government allows us to make financial mistakes, which are in the favor of the federal government. Our legacy needs to be safeguarded, beneficiaries need to be named, trustees and various people need to be appointed to ensure that in life, as well as death, your desires are carried out. Without estate documents in place, this is unlikely to occur as you desire.

Now you have the essential ingredients for a well thought out financial plan. My goal for you, while alive you live. Creating A RECIPE will help you live, well!