Wealth Vision

Are you ready to take your retirement plans to the next level?

From: Bill Lethemon

Subject: Your Retirement!

WealthVision is designed for one thing and one thing only…

To help you get more out of your retirement resources.

Here are the 7 steps we take to make sure that happens…

 

 

Step 1: Creating your vision.

Retirement planning needs to go beyond just the financial aspect of “can you retire”. What are you going do all day, every day for the next 20 to 40 years when you don’t have to go to work?

It’s important to have a clear idea of what you want your retirement to look like.

This vision will help you to prioritize your goals, so you can focus on the things that are most important to you. You will also learn how different financial decisions impact other aspects of your retirement. In other words what are the trade-offs of making one choice over another.

Although vision is the first step in the financial planning process, as we begin to optimize the other aspects of your retirement resources, your vision might change, as you start to discover what is truly possible for your retirement.

  • Maybe you can retire much earlier than you originally planned.
  • Could you consider a semi-retirement period where you work fewer hours or pursue work that’s less stressful or that you’re more passionate about?
  • Do your kids or grandkids live in a different part of the country? How often do you want to see them?
  • Do you dream of buying an RV and criss crossing the country?
  • Maybe it’s a sailboat to travel the world.

Whatever your dreams, WealthVision can help you plan for it!

 

Step 2: How much is it going to cost?

We begin with your basic expenses, like housing, transportation, food, entertainment, and other everyday living expenses.

Another thing to think about are how your expenses will likely change once you’re retired.

For example, if you have expenses related to your kids, chances are at some point those expenses are going to go away.

Will your mortgage, or other debt be paid off before you retire?

Insurance is another category that can have big changes as you approach retirement.

Do you have life insurance? Do you still need it? How much?

Healthcare insurance is another big expense. In fact for many retirees it could be their single largest expense. Especially if you’re planning to retire before age 65, we need to make sure we’re properly planning for those healthcare related expenses.

Once you’re retired you will have a lot more free time. Do you have hobbies that you will spend a lot more on once you retire?

Do you want to set up a specific budget just for travel?

Determining how much your retirement could cost is one of the most important parts of the financial planning process.

 

Our WealthVision fact finder makes this super easy, even for people who normally don’t like budgets.

 

Step 3 Getting Organized

If you’re like most people planning for retirement, you probably have a lot of financial resources in a lot of different places.

IRA’s

Roth IRA’s

401k, 403b, 457

Social Security benefits

Pension, Lump sum pension,

Real estate

Bank accounts

etc, etc, etc.

Did you know there is a correct way to organize this information?

It’s called your financial statements.

Just like a corporation prepares financial statements once a quarter, we believe individuals need to do the same thing.

There’s a few key statements we think everyone should have.

  • Statement of Net Worth
  • Cash-Flow Statement
  • Balance Sheet
  • Income tax forecasts

Through the WealthVision process we will prepare these financial statements for you so you have a clear picture that can help you make more well informed and confident decisions regarding your money.

 

Step 4: Find your Gaps

At the very center of the WealthVision financial plan is your cash-flow report that we created for you in step 3.

When you’re working your cash-flow, tends to be pretty consistent. Money comes in from your job or business, you have some expenses that are usually pretty consistent, and what’s left over is your cash-flow. Pretty simple.

Once you retire, things tend to get a lot more complicated. The money you have coming in and your expenses can vary quite a lot from one year to the next.

Here’s a few examples…

** You retire at 58, but you’re not even eligible to collect Social Security until 62. Maybe it makes sense to wait until 67 or even 70 to collect. What about your spouse?

** Healthcare expenses will likely be much higher before age 65 when Medicare kicks in.

** Your mortgage may be paid off in year 4 of your retirement, giving you a positive increase in your cash-flow.

These are just a few of the countless examples of how your cash-flow can vary from one year not another.

Understanding your cash-flow is the foundation to step 5 of the WealthVision process.

 

Optimization

Here’s what WealthVision can do for you…

Planning for retirement income.

A lot of financial plans just tell you where you are and if you’re on the right track to hit your goals, but don’t really tell you how you will get the money from your portfolio assets to fund those goals.

Do you just sell investments as you need the money? What if the market is down?

Sequence of returns is one of the biggest risks facing retirees.

Having a clear understanding of your cash-flow needs is one of the most important elements of your plan for retirement income. Thats why we focus so much on it!

As you get closer to retirement you will want to start thinking about how you will transition your investments from a portfolio designed for retirement accumulation to a portfolio designed for retirement income.

With WealthVision, you get a detailed breakdown on how your portfolio and retirement resources will generate the income you need for your retirement lifestyle.

We will provide you specific details on how to set up your accounts for retirement income.

 

Social Security Strategy

There are a lot of different tools and reports out there designed to help you learn ways to get more out of your Social Security benefits. When to collect, how to coordinate your benefits with your spouse etc.

While these tools are great for your Social Security strategy, they don’t really consider the impact that strategy might have on your taxes or your long term cash flow.

In other words, having the wrong Social Security strategy could negatively affect your cash flow and cost you unnecessary taxes.

WealthVision will provide specific recommendations on how and when to collect your Social Security benefits.

We will explore multiple filing strategies to not only learn how to maximize your Social Security benefits, but also the impact each strategy has on your tax situation and long term cash-flow.

 

Retirement Tax Strategy

I can’t stress enough how important it is to have a tax strategy for your retirement. It may be the one thing that can have the biggest impact on your retirement lifestyle.

Most of us have probably been told that we will be in a lower tax bracket in retirement. We find that for many of our clients this is simply not the case.

Do you have most of your retirement savings in a traditional retirement account?

After age 70 1/2 the IRS forces us to begin taking mandatory distributions from our IRA Accounts. Those who have not properly planned for this are often shocked by the amount of taxes that they have to pay.

Often, this can push someone into a higher tax bracket than they ever experienced while they were working.

On top of the tax, Medicare premiums can be over 200% higher if you get pushed up into one of the top tax brackets.

WealthVision will create detailed tax planning reports that show how your taxes will change over time.

These reports are invaluable to creating your retirement tax plan!

Your tax plan will take into account all of the different types of income that you will have in retirement, including Social Security, Pensions, Interest, Dividends, Capital Gains, and withdrawals from retirement accounts including your mandatory withdrawals.

We also will account for the Tax Cuts and Jobs Act rates that went into effect in 2018 and are set to expire in 2025. For most, these tax rates might be the lowest rates we will likely see in our lifetime.

By fully understanding how your taxes change over time we can look for ways to minimize your taxes.

 

These are just some of the strategies we can explore…

  • How much should you have in each of the 3 tax buckets
  • How to take advantage of “low tax years”
  • Roth Conversion strategies
  • How to shift money from less tax efficient accounts to more tax efficient
  • How to position your investments to reduce your tax rate
  • Where to save money that will have the best long term tax advantages

The WealthVision tax strategy will include action steps you can take right away, before you retire, that can have a significant impact on your taxes.

Just a few of the ideas and strategies in your WealthVision Plan, could be 10 times more valuable than the cost to do your plan.

 

Your plan includes

Just some of the questions we can help you answer with confidence after completing your WealthVision Financial Plan.

Should I downsize my home? If I do, what does that do for my long term retirement projections?

Can I afford to buy a second home?

Do I still need life insurance? Will my family still be protected? What are my options for cancelling a policy? Will I lose cash value or have to pay taxes?

 

Do you already have a financial plan?

Whether you are managing your investments on your own, working with a financial advisor or even if you have a Certified Financial Planner, there are 3 things you must have…

  1. The knowledge and experience. This comes from not just the amount of time someone has devoted to personal finances, but someone also needs to be a student of personal finance. I can tell you first hand that although I have been doing financial planning and helping people manage investments for 25 years, things change all the time, and I continue to learn.
  2. The right tools. As you might already be able to tell, financial planning and preparing for retirement can be quite complex. Lots of moving parts. Making one decision over another often impacts several other aspects of your financial situation. Although some basic planning may be possible with a calculator or some spreadsheets, these basic tools usually fall short of what’s possible using some sophisticated financial planning software. We use something called eMoney, one of the largest, and in my opinion the most advanced financial planning software on the market today. This software allows us to dynamically change variables within a plan so we can see the immediate impact one one decision over another. They also keep the software up to date with all of the latest tax law changes market data etc.
  3. Knowing how to use the tool. Although many advisors have access to these advanced planning tools, many don’t know how to use the software to its fullest potential. They are only using a fraction of what the software can truly do. We are advanced users of eMoney, and for the last 10 years have been dedicated to getting the most out of what the software can do. There is almost no scenario that we can’t model within our WealthVision financial plan.

 

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