A Simplified Approach to Retirement
There are four basic steps to retirement success you need to address to cover the challenges you might face in your golden years.
Step One: Cover Your Domestic Expenses.
Step Two: Protect Your Portfolio Against Inflation.
Step Three: Insure Your Legacy and Giving with Life Insurance.
Step Four: Indemnify Yourself Against Elder Care Costs.
You’ll need a budget, a risk-tolerance test, a list of family members, a list of favored charities and a plan for assisted home living.
Building a basic retirement strategy should include the categories outlined here. They are the simple steps that need addressing. They are chronological, so do them in sequence.
Step One: Cover Your Domestic Expenses
You and your spouse need to select a budget that outlines your domestic spending and routine trips like visiting the grandchildren or going on church missions. Once you’ve collected all your bills and travel costs, assess them against your Social Security income and corporate or government pension. If there is a short fall, you might need to buy a guaranteed lifetime annuity with a cost-of-living adjustment for you and your spouse to make up the difference. You’ll want a licensed insurance professional familiar with lifetime income annuities to assist you.
Step Two: Protect Your Portfolio Against Inflation
You and your spouse need to take a risk-tolerance test and share the results with each other. Then, you both need to work at establishing common-ground principals with your portfolio purchases and the mix of your investments. One rule of thumb is to buy equities with returns greater than inflation, with low expense charges and beta risk. It may be prudent to hire a financial advisor experienced in asset allocation to assist you.
Step Three: Insure Your Legacy and Giving with Life Insurance
You and your spouse need to make a list of family members and charities you desire to help after you’re gone. If you and your spouse are in relatively good health, you should investigate Survivorship Guaranteed Universal Life (SGUL). SGUL can cover both spouses and transfer tax-free death proceeds to your beneficiaries for pennies on the dollar. Then, you can enjoy your retirement knowing your family members and charities are funded. You’ll want to engage a life insurance professional to bid out your policy for the best possible rate. Watch the interview about leveraging life insurance with Tom Hegna, popular platform speaker, retirement specialist and best-selling author. Tom has two retirement books entitled, Don’t Worry, Retire Happy and Paychecks and Playchecks. Tom has also hosted the PBS Special, “Don’t Worry Retire Happy.”
Step Four: Indemnify Yourself Against Elder Care Costs
No retirement strategy can be complete without long-term care coverage. The most expensive costs in retirement are medical and elder care costs. Medicare can take care of the bulk of the medical costs you’ll incur, but you still need elder care coverage.
There are conventional long-term care insurance policies as well as hybrid polices attached to life and annuity contracts. Contractual language is important in these policies, so it’s imperative to hire a long-term care specialist.
These four steps can be expanded upon to build out a comprehensive retirement strategy, but if additional sophistication becomes necessary, you’ll need a professional financial advisor whose area of expertise addresses all aspects of retirement.
Nationally syndicated financial columnist Steve Savant interviews Tom Hegna, popular platform speaker, retirement expert and best selling author. Tom has two retirement books entitled Don’t Worry Retire Happy and Paychecks and Playchecks. Tom has also hosted the PBS Special, Don’t Worry Retire Happy.