Retirement Planning During Bear Markets

https://youtu.be/YOrWVnyIcJA

Bear Markets In Retirement

Bear markets can feel a lot different when you’re retired and are no longer earning income from work, especially if this is your first bear market since you stopped working. When you were younger, you had time on your side. You may have even seen drops in the market as an opportunity because it gave you additional time and you got to purchase more shares while things were on sale, so to speak.

The relationship between your money and your accounts now is of money going out versus money going in, to put it simply. You may have noticed that there’s this psychological component around money and not wanting to mess things up. The decisions we make carry much more weight now when we’re close to or in retirement.

What led to your investment success the last 30 years is a lot different than what’s going to lead to success the next 20 or 30 years, or that’s at least what we’ve been seeing at Streamline Financial since we’ve been around. I want to share how to endure bad markets if you’re close to retirement, and what you can do to actually take advantage of this if you’re already retired – even if you’re no longer saving money. 

Newton’s Third Law of Motion

There is a universal law of physics that we can actually apply to our retirement. Newton’s third law of motion states that for every action, there’s an equal and opposite reaction. The way I see it, there’s a positive to every negative and vice versa. I want to share what the positive is to take advantage of during bad markets. 

Getting Through Bear Markets

The first thing we need to be aware of is that in the previous 30 years, there were four bear market corrections (a drop of 20% or more). The 30 years before that, there were a total of five bear market corrections. We need to expect these bear markets to happen during our retirement (the next 20 or 30 years).

The second thing is we don’t want to make a change based solely on emotion. We were just talking to someone yesterday about how emotions can cause us not to take action when we know doing so is actually the smart financial thing to do. For instance, during March of 2020 it wasn’t easy to rebalance your accounts, but if you followed through and did the correct rebalancing system or strategy and you were to look back now, it could have made a lot of sense.

Lastly, start with your income plan because that helps guide us and make really good planning decisions around our investment plan. Updating your income plan during bad markets can also give you some confidence as well as you’re looking at where we are today and then looking at over the next few years and seeing that things maybe aren’t as bad as it might seem.

How to Take Advantage of Bear Markets

This takes us back to that law of polarity we mentioned earlier. Idea number one to think about is tax-loss harvesting. That could be a way to write off some of the losses while still keeping your investment strategy intact. One thing to really pay attention to when we’re talking about tax-loss harvesting is that wash-sale rule.

The second thing that could be a possible opportunity is the ability or option to lock in higher yields in that conservative bucket. You’ve seen the bucket strategy on here before where you have the possible three buckets, and having that conservative bucket is a great way to plan out and prepare for bad markets. At the time of this recording, some of those historically conservative asset classes are paying a higher interest, a higher yield, than what we’ve seen really over the last decade which could be a silver lining during this period of time.

Those are just two things you could potentially take advantage of. If you’d like to talk more about your plan, feel free to reach out. We don’t always have space available but you’ll hear back from us either way. See you in the next video!

Investment Advisory Services offered through LaSalle St. Investment Advisors, LLC, a SEC Registered Investment Advisor (LSIA). Securities offered through LaSalle St. Securities, LLC (LSS), a Broker/Dealer and Member FINRA/SIPC. LSS is a Subsidiary of LSIA.  Streamline Financial Services is not affiliated with LSS or affiliates.  Investing involves risk, including loss of principal. This video content is not a recommendation to buy or sell specific securities or investment company products.  Any third party software future performance and/or projection services are neither provided nor endorsed by LaSalle St. Securities, LLC LSS affiliates, or Streamline Financial Services.

The information by Advisor (“we”, “us”, or “our”) is for general information purposes only.  None of this information should be construed as tax, legal, financial, insurance, financial advisor, or other advice and may be outdated or inaccurate.  It is your responsibility to verify all information yourself.  This content is prepared for entertainment purposes only.   It is solely at your own risk. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. All information is provided in good faith. However, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the Site. Under no circumstance shall we have any liability to you for any loss or damage of any kind as a result of the use of the site and reliance on the information provided.

This site may contain testimonials by clients who are users of our products and/or services. These are non-paid either directly or indirectly testimonies that reflect their real-life experiences and opinions. These experiences are personal to those particular individuals and may not necessarily be representative of all clients who use our products and/or services. Your individual results may vary.

This site may contain endorsements by non-clients who are not users of our products and/or services. These endorsements reflect their own opinions or views and may not be representative of our own. We are not affiliated with users who provide endorsements and they are not paid or otherwise compensated directly or indirectly for them.

Why This Little Used Retirement Account Can Work So Well – Retirement Planning Strategy

https://youtu.be/jXpeXqEHR_Y

There’s a retirement account that many retirees and pre-retirees often overlook, and not having this type of account often restricts their options when it comes to helping save on taxes. The first option you could miss out on is tax efficient withdrawal planning, tax loss harvesting, or optimizing their charitable giving. Secondly, Roth conversions; planning those out over a long period of time. What’s the best strategy over my retirement or even before I retire? Number three, those one-time, big ticket items in retirement can have a big impact on the plan. Whether that’s purchasing a second home, giving annual gifts to family members, etc.

Non-Retirement Accounts

It’s important to have options for paying for those that aren’t just retirement accounts. The reason this is so overlooked is because it’s technically not a retirement account like your 401k, IRA, 403 , Roth, or even HSA. This account is your individual, joint, or trust investment account. For today’s purpose we’ll call it your taxable investment account.

I want to share all the many wonderful things you can do if you have a funded taxable investment account versus those who have limited options of having just retirement accounts in their retirement years. I’ll also talk about the roadblocks that keep people from taking advantage of these benefits. 

Roth Conversion Strategies

This past year we spoke with many soon-to-be retirees that weren’t too worried about running out of money, but they wanted to optimize what they were doing so they didn’t have to pay more tax than what they needed to. One couple who came to us was excited about this period between age 60 and 70 where they heard that could be a sweet spot for converting some of their IRA money to Roth IRA money.

As we talked, we realized they had some money at the bank, but they had very little in their taxable investment account. They were excited about Roth IRA conversion strategies but their current plan didn’t have enough cash flow to pay that extra tax they were going to incur when they did the conversions.

It’s one reason to be really careful when you hear ideas, like here on YouTube, around Roth conversion strategies. Remember, it’s going to cost you some tax now to save on tax later, and that’s okay if it makes sense but you need cash to pay for that tax. A taxable investment account is one of those buckets that can really help. The good news for this couple was that they had a few years until retirement, so we looked at how much was projected to be in their pre-tax IRA by age 72 and what the required distribution would be.

It was going to be a substantial forced pay raise that would kick them into an even higher tax bracket for income that they weren’t going to need. The plan for them was to start funding the taxable investment account more than what they’d been doing in the past to build up that bucket and be ready for this Roth conversion sweet spot.

Case Study – Investment Accounts

Let’s say we’re talking to Mark, and Mark has $5,000,000 in his overall investment accounts; it’s all in his IRA, and he wants to buy a new camper for $200,000. So he’s planning on moving out of the house, camping around North America. He’s already taking out $100,000 from his IRA each year to cover living expenses. That, plus his social security as a single filer puts him in the 24% tax bracket. To fund the camper he will need to take out about $270,000 so that he can withhold about $70,000, set that aside for taxes and then be able to pay for his $200,000 camper.

So his $200,000 camper is going to cost him an extra $70,000 than it should because he has to pay for taxes. This is going to bump him from the 24% tax bracket up to the 35% tax bracket when he takes out this extra $270,000. One option for somebody like him is to anticipate those needs and split up your distributions over two years. Even with that though, he’s still in the 35% tax bracket when he splits it up over the two years it would save him some taxes. So let’s look at Diane instead.

Diane also has $5,000,000 in her investment accounts but she has a taxable investment bucket and that has $1 million in it. When she pulls out of that taxable investment account, she’s only going to be paying taxes on the capital gains or losses, the dividends and interest on that account. Let’s say she wants the same exact camper for $200,000. In her situation, selling the $200,000 from her taxable investment account, let’s assume she’s about 25% in positive capital gains in that account. What she’ll have to pull out of that. So that means there’s $50,000 in gains. That $50,000 of gains taxed at 15%, when she pulls out that $200,000, it’s only going to be $7,500 in tax.

So $7,500 in tax versus $70,000. Diane is literally paying 1/10 the taxes that Mark is paying for that one-time, big ticket purchase. Not to mention, Diane can use her taxable bucket to do tax loss harvesting for tax deduction purposes while maintaining her same asset allocation, she can sell a fund or stock at a loss, buy a similar fund or stock with the proceeds (careful with the wash sale rule here); she can also give appreciated assets to charity or her donor-advised fund, and that’s going to help her to not pay capital gains on those assets that are given away. Diane can also use her taxable account for income in those first few years of retirement and keep her taxable income and her tax bracket low so she can explore more Roth conversion opportunities. 

Roadblocks

Hopefully you can see the power of having a taxable investment account and the options that it gives you. Three of the roadblocks that we see that keep people from taking advantage of a solid taxable investment account come retirement. Number one, maybe you didn’t know it was possible. We see a lot of folks with extra savings after maxing out their 401k’s who don’t know what to do, so they’ll purchase a larger home, buy nicer cars, and start to sink excess cash into liabilities rather than investments for the future. While there’s nothing wrong with those things, you might miss out on the benefits that we just talked about.

Number two, maybe you own a business and you want to reinvest all your capital into that endeavor. First of all, I love your passion and your drive around that. Being all in says a lot about you as a leader. However, when we work with a business owner, we help create what’s called the over-the-wall portfolio where you split your profits in between reinvesting in the business and a portfolio that’s there for you and your family as a plan B.

Number three, maybe you like investing in income-producing real estate. While that can be a worthwhile investment strategy, it’s not for everyone. It’s hard to actually diversify your real estate portfolio across zip codes, countries, different kinds of real estate, different industries. Most people have very concentrated real estate portfolios.

Three Action Steps

If this has been helpful, here’s a quick action step. Number one, take stock of what’s in each of your buckets. Model out what you have IRA, tax free accounts like Roth IRA, and your taxable bucket. If you’re close to retirement and you’re thinking about tax strategies or Roth conversion strategies, you could use the DIY retirement planner, and you could model out some Roth conversions. Option number two, talk with a CFP certificate and model out your buckets, and see what your options are for your retirement withdrawal strategy. And number three, if taxes are important to you, spend a few minutes trying to model this out by yourself, like a Roth conversion strategy over a long period of time, or have somebody help you.

This is a topic that we talk about frequently on this channel. If you haven’t subscribed, do so, and you don’t miss out on future tax planning strategies. We’ll see you in the next one!

Investment Advisory Services offered through LaSalle St. Investment Advisors, LLC, a SEC Registered Investment Advisor (LSIA). Securities offered through LaSalle St. Securities, LLC (LSS), a Broker/Dealer and Member FINRA/SIPC. LSS is a Subsidiary of LSIA.  Streamline Financial Services is not affiliated with LSS or affiliates.  Investing involves risk, including loss of principal. This video content is not a recommendation to buy or sell specific securities or investment company products.  Any third party software future performance and/or projection services are neither provided nor endorsed by LaSalle St. Securities, LLC LSS affiliates, or Streamline Financial Services.

The information by Advisor (“we”, “us”, or “our”) is for general information purposes only.  None of this information should be construed as tax, legal, financial, insurance, financial advisor, or other advice and may be outdated or inaccurate.  It is your responsibility to verify all information yourself.  This content is prepared for entertainment purposes only.   It is solely at your own risk. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. All information is provided in good faith. However, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the Site. Under no circumstance shall we have any liability to you for any loss or damage of any kind as a result of the use of the site and reliance on the information provided.

This site may contain testimonials by clients who are users of our products and/or services. These are non-paid either directly or indirectly testimonies that reflect their real-life experiences and opinions. These experiences are personal to those particular individuals and may not necessarily be representative of all clients who use our products and/or services. Your individual results may vary.

This site may contain endorsements by non-clients who are not users of our products and/or services. These endorsements reflect their own opinions or views and may not be representative of our own. We are not affiliated with users who provide endorsements and they are not paid or otherwise compensated directly or indirectly for them.

Why This Investment System Can Help Retirees Worry Less About Their Retirement Plan

https://youtu.be/mif_aIT4abw

Preparing for Future Economic Seasons

I want to share an investment system for retirees to hopefully assist you as you’re thinking about and planning for your retirement. We’re also going to look at how to prepare your retirement for the potential economic seasons that we may be headed into, and then the easy system that’s going to help lower taxes and lower risk as well.

Retirement Income Plan

If you need help defining the income plan, look at the DIY retirement course. Once you define your goals for retirement and the income needed to achieve those goals, creating the investment system becomes a lot easier. Within the investment plan we know that we can only control three things, and all three of the things we actually want to minimize through this investment system.

Reducing Tax

The first thing we can minimize or reduce is how much tax you pay when investing. We had a client who was not a client of Streamline Financial, but of a tax firm, coming to the CPA firm in March to pick up his tax return. He was completely surprised that he had $60,000 of extra income on his tax return that he had to pay tax on right away, before April 15th. It was due to the capital gains being recognized and other distributions within his investment account. He said, “But I didn’t sell anything and the account didn’t even go up that much last year, and I have to pay tax on it?” He was already in the highest tax bracket, paying close to 37% on short-term capital gains and dividends and interest, so that was an unpleasant surprise, and we see it happen more often than it should.

Here are two ways we can control tax so that we don’t have that happen. Number one is the kinds of investments that you own; funds, ETFs, individual equities or things like that. The funds and ETFs, they could pass on capital gains and distributions to you each year without you even selling or buying, but it happens within the fund a lot of times. We would use funds and ETFs that are considered tax efficient so that our clients can decide when to recognize gains rather than letting the fund company decide.

The second way is by using a strategy that’s called TLH. Each year, there’s many mini fluctuations or big fluctuations that happen in an investment account, and the strategy that we call TLH – tax loss harvesting. It allows them to sell an investment that may be down for part of the year and then move it into a very similar investment right away so that the investment strategy stays the same and they can actually take a write-off on that loss on their taxes that year.

Controlling Cost

The next thing that we can control in our investment plan is cost. This one’s easier, but many advisors don’t do it because it ends up paying them less. Since we’re certified financial planner professionals, we do follow the fiduciary standard and we’re obligated to do what’s best for our clients. So tell me this, if you had two investments, and they had the exact same strategy, the same returns, the same risk, and the same tax efficiency, would you rather want the one that costs 0.05% per year or the one that costs 12 times more, at 0.6%?

I know the answer is obvious, and we’d go with the lower cost funds. Low cost funds and ETFs, that’s how we can really help reduce the cost, or that’s how you can help reduce the cost in your investment plan. Every basis point or part of a percentage that’s saved in cost is added to your return each year, and this adds up to a lot over time.

Minimizing Risk

The last thing that we want to minimize and control is risk. We believe there are four different seasons in investing, and depending on what season we’re in, some investments perform better than others. The four seasons are higher than expected inflation, lower than expected (deflation), higher than expected economic growth, or lower than expected economic growth. The goal is to reduce the risk in investing by making sure that we’re prepared for each and every one of those potential seasons.

There are individual asset classes that tend to do well during each one of those seasons and nobody knows what’s really going to happen. That’s why we want to make sure we have the asset classes in the right spots so that the income plan doesn’t get impacted. The investment system combined with the income system keeps you from having to worry about the movements in the market because you know you’ve got enough to weather any potential season.

Investment Advisory Services offered through LaSalle St. Investment Advisors, LLC, a SEC Registered Investment Advisor (LSIA). Securities offered through LaSalle St. Securities, LLC (LSS), a Broker/Dealer and Member FINRA/SIPC. LSS is a Subsidiary of LSIA.  Streamline Financial Services is not affiliated with LSS or affiliates.  Investing involves risk, including loss of principal. This video content is not a recommendation to buy or sell specific securities or investment company products.  Any third party software future performance and/or projection services are neither provided nor endorsed by LaSalle St. Securities, LLC LSS affiliates, or Streamline Financial Services.

The information by Advisor (“we”, “us”, or “our”) is for general information purposes only.  None of this information should be construed as tax, legal, financial, insurance, financial advisr, or other advice and may be outdated or inaccurate.  It is your responsibility to verify all information yourself.  This content is prepared for entertainment purposes only.   It is solely at your own risk. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. All information is provided in good faith. However, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the Site. Under no circumstance shall we have any liability to you for any loss or damage of any kind as a result of the use of the site and reliance on the information provided.

This site may contain testimonials by clients who are users of our products and/or services. These are non-paid either directly or indirectly testimonies that reflect their real-life experiences and opinions. These experiences are personal to those particular individuals and may not necessarily be representative of all clients who use our products and/or services. Your individual results may vary.

This site may contain endorsements by non-clients who are not users of our products and/or services. These endorsements reflect their own opinions or views and may not be representative of our own. We are not affiliated with users who provide endorsements and they are not paid or otherwise compensated directly or indirectly for them.

Retiring Before Age 60? Know These Exceptions to the 10% Penalty

https://youtu.be/sxdo4Tp_2-g

There is one account that we need to make sure clients have if they’re thinking about retiring before age 60, and that’s because there’s a 10% penalty for withdrawals from IRAs and 401ks if you’re under that magic age of 59 and a half. There are exceptions to that penalty, and it allows people to take money out without paying the 10% penalty. Some of the exceptions apply only to IRAs and some apply only to 401k’s, so it’s important to know the rules for both of those before you actually retire and start implementing that income plan that you planned for.

Let’s go over the exception so you don’t get stuck paying that extra 10% penalty to the government if you’re retiring before age 60. Just as a reminder, before making any decisions with finances, always be sure to just talk to your financial professionals so that you make sure you’re not missing anything when implementing these things.

Health Insurance

The first exception for IRAs only is buying health insurance if you lost your job and you collect unemployment for at least 12 consecutive weeks. The next exception is paying for higher education expenses either for yourself or for your kids. It also works for grandkids as well. The third probably doesn’t apply to you, but it’s that it’s up to you to withdraw up to 10,000 from your IRAs for a down payment on the first time purchase of a house. So, first time home buyers purchase.

The Rule of 55

Next is the exception to the 10% penalty for 401ks. And similar plans like 403Bs or a few other qualified retirement plans. So, this is just 401ks and those types, not IRAs. Now, there are about five or so exceptions here, but there’s really one that really matters, and it may be applicable to you and your retirement plan. I’ll share it, and then I’ll share a mistake that sometimes people make when they’re planning retirement, and that most applicable one is the rule of 55. The rule of 55 is an IRA’s guideline that allows you to avoid paying the 10% penalty or early withdrawal penalty on 401ks and 403b retirement accounts.

If you leave your job during or after the calendar year you turn 55, the rule applies regardless of the terms of your separation. You can either take advantage of it whether you have been laid off or if you decide to just retire early. The rules with this exception are very specific. I’ve seen some plans in the past where they actually don’t have this built in this age 55 to 60, which are without penalty, but you just want to make sure that it’s there, and that you can take advantage of it. 

Withdrawing from Your IRA Earlier Than Planned

The mistake I see people make when they’re planning their retirement: they map out their retirement at age 55, and everything looks good and they have enough in the non-retirement accounts that are not subject to withdrawal tax when they take money out. They’ll use that for the first five years. So, maybe their brokerage account, cash, the bank, things like that because they’ve got five years outside of retirement accounts, they’ll roll over their entire 401k or their 403b to an IRA. The problem that we sometimes see happen is if something doesn’t go according to plan, they may find themselves having to draw from their IRA earlier than planned (earlier than age 59 and a half or 60), and because it’s not in that 401k anymore, they would have to pay the 10% penalty to take it out of their IRA.

It might be worth not rolling over the 100% of your 401k to an IRA if you’re under 59 and a half, and maybe have that little buffer in there as the second line of defense or or backup plan in your 401k if you needed something else. Now, there are a few other exceptions to the 401k 10% penalty that apply to a few select people like public safety employees and government 457 plans. Here’s an article to learn more

Exceptions to the IRA and 401k

Up next are a few of the exceptions that could apply to the IRA or 401k. So, here are some of the other exceptions to IRA or 401k or 403b: medical expenses to the extent that they exceed 10% of your adjusted gross income. The next one comes with a warning and it’s the exception which is substantially equal payments. That’s also known as the 72T exception. This is where you take your balance distributions over substantially equal payments. It sounds confusing, but being part of a CPA firm that helps over 2,000 people, I’ve seen quite a few times where this strategy goes wrong; if it’s done wrong the entire balance of the account could be taxable including that 10% penalty if you’re under 59 and a half. Hence the warning if you’re looking at this one. 

Just make sure you’ve got a CPA or your team evaluating all the things to make sure that it’s done right. The next exception is disability, and it must meet the IRA’s definition of total permanent disability, and you’ve got to have documentation from a doctor. The next one is adoptions or the birth of a child up to 5,000 in withdrawals can be penalty free in that first year for the adoption year. There are a few more exceptions, but these are the ones that seem to be the most common. To see all of them, read this article.

Disclaimer: Since we don’t know your specific situation, none of this information should be construed as tax, legal, financial, insurance, financial advice, or other advice and may be outdated or inaccurate. It is your responsibility to verify all information yourself. This content is prepared for entertainment purposes only. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. Streamline Financial Services, LLC or its members cannot be held liable for any use or misuse of this content.

Affiliate Disclaimer: This post may include affiliate links where we may earn a payment when you click on the links at no additional cost to you. 

Disclosures: Securities offered through LaSalle St. Securities LLC (LSS), member FINRA/SIPC. Advisory services offered through LaSalle St. Investment Advisors LLC (LSIA), a Registered Investment Advisor. Streamline Financial Services is not affiliated with LSS or LSIA. LSS is affiliated with LSIA.

Retirement Planning Red Flags To Avoid

https://youtu.be/6wZW5uzWJRY

Doing these five things in retirement could put stress on your money plan, which could end up leading to increased worry about your finances. I want to show you some examples of what some of these things can do in an actual retirement plan. I will go over these 5 things so that you’re aware of them, and hopefully can plan ahead so as to not be unpleasantly surprised in retirement.

Now, onto the first red flag.

Red Flag Number One – Main Income Source

The first red flag to be watching out for is if your main income source in retirement is going to be 401k’s, IRAs, or other pre-tax retirement accounts. Why is this a red flag? When you start taking money out of your retirement savings account, taxes are a major factor, right? Withdrawing from a normal 401 plan or IRA are subject, all of the income subject to ordinary income tax, so that million dollar IRA that you have might not really equal $1 million after taxes, it might equal 850K or less depending on social security or other income sources that you have. 

A couple ways to think about fixing this – if you’re not retired yet, think about increasing contributions to non-retirement accounts or maybe Roth IRAs. Having three types of retirement accounts that are taxed differently can give you more options when you’re designing that tax-efficient withdrawal plan. If you are retired, take a look at what your estimated tax rates might be a few years from now and if you’re able to convert pre-tax money now into Roth IRAs; if you can pay less tax now versus what you might do in the future, that could be another good option. This is an area where you should really consult with a tax or financial professional before doing anything, just to make sure that you’re thinking about all the steps.

Red Flag Number Two – Silent Killer

The second red flag can sometimes be seen as the silent killer – although it’s hitting the headlines a lot in 2022 – and that’s inflation. Your investments could fail to keep pace with inflation. Many people who get close to retirement want to increase security, which makes sense, and they want to put more money into cash or conservative assets or maybe build that conservative bucket that we talk about in the bucket strategy, and it seems like it’s a safe thing. However, if you had $1 million in a bank account at the beginning of the year, at the end of the year, you still got $1 million, so that’s kind of why it’s the silent killer. In reality, that $1 million could be worth $30,000 less, or maybe $50,000 depending on how fast everything else we need to buy is increasing in price – that’s inflation.

To maintain your net worth over the long-term, you have to put in more effort to keep up with inflation. Higher-than-expected inflationary periods is one of the four economic seasons that we can go through. Making sure you have asset classes that have historically done well during this season could be a good idea. Next, I’m going to actually dive into a retirement plan and look at the impact of some of these red flags.

Red Flag Number Three – Making Big Gifts 

This red flag is making either big gifts too soon in your retirement, or helping family with big things too soon in retirement. Now at Streamline, one of our core values is generosity and to help family and causes that you care about to really make a difference, but we want to make sure that we do it the right way with our clients. We first want to map out the entire retirement plan; make sure it’s sustainable, look at a bunch of the what-if scenarios, and make sure it all works. Then we can work in some of those other one-time possibilities, like here is an example of a plan.

Let’s say there was a one time big expense in 2025, or what if you had some weddings for kids, or what if inflation rates changed, or there was a big home purchase, or you wanted to spend more in the Go-Go Years (the early years of retirement)? The important thing here is to have increased confidence with your decisions before you actually make the decision. It’s really not a great feeling to make a financial decision and then be worrying about whether it was a good idea or a bad idea. Plan them out before retirement – have money earmarked for these gifts or bigger than normal expenses, and that’s going to make things just so much better.

Red Flag Number Four – Debt

Going into retirement with debt, specifically non-mortgage debt because that kind of debt, it’s easier to handle when you’re getting a work income and you know that paycheck’s coming in but once you move to more of a fixed income and those debt payments, they can actually really have a negative impact on cash flow, so try not to carry that debt into retirement. If you do have it, try to get serious on paying it down while still working.

Red Flag Number Five – Assisted Livings

This next red flag is one that comes later and it makes it easy to not work it into your plan, and that’s the possibility of needing an assisted living facility, home care, or some sort of long-term care need in the future. There’s really two options: you can self-insure, or you can pay for insurance, and there are a few options there. According to the US Department of Health and Human Services, about 70% of Americans 65+ are going to require long-term care at some point in their lives. Some can rely on family, which is great, but about half of those who need it will have to pay on their own.

If you want to make sure that your retirement years are going to be the best years of your life, watch this video that’s coming up next about the seven things that the happiest retirees do in their retirement years.

https://www.davezoller.com/DIY-Retirement

Disclaimer: Since we don’t know your specific situation, none of this information should be construed as tax, legal, financial, insurance, financial advice, or other advice and may be outdated or inaccurate. It is your responsibility to verify all information yourself. This content is prepared for entertainment purposes only. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. Streamline Financial Services, LLC or its members cannot be held liable for any use or misuse of this content.

Affiliate Disclaimer: This post may include affiliate links where we may earn a payment when you click on the links at no additional cost to you. 

Disclosures: Securities offered through LaSalle St. Securities LLC (LSS), member FINRA/SIPC. Advisory services offered through LaSalle St. Investment Advisors LLC (LSIA), a Registered Investment Advisor. Streamline Financial Services is not affiliated with LSS or LSIA. LSS is affiliated with LSIA.