Financial Planning

5 Bases You Need Covered With Your Retirement Plan

Does your financial plan have a hole in it? Check to see if you have all five of the critical areas covered.

The road to retirement just keeps getting more difficult to navigate, with new products, new rules and new technologies.

It helps to have a guide.

And there are plenty of them out there — brokers, planners, agents and money managers, all offering to steer prospective clients to the lifestyle they long to have in their golden years.

Which one should you hire? This is going to sound kind of obvious, but I’d recommend the one who’s carrying the best map.

Let’s face it: There are lots of financial professionals today who can get you started down the right path with investment advice. They’ll happily take your money — whether it’s through a commission or a fee — in exchange for getting you into the “appropriate mix” of stocks, bonds and other securities. And that’s probably fine, if you’re young and just setting out.

But the professional who limits his or her leadership to investing advice is not going to get you comfortably and confidently to your retirement goals. And if you’re paying for advice, that’s what you should expect — a plan that focuses on these five key areas of your financial life:

Income Planning

You could spend decades in retirement, and you need to be sure you’ll have reliable income streams to pay your month-to-month expenses for the rest of your life. This area typically should cover:

  • Social Security maximization
  • Income and expense analysis
  • Inflation
  • A plan for the surviving spouse
  • Longevity protection

Investment Planning

Once your income plan is established, it’s time to talk about your remaining assets (those that you won’t need to draw from every month). The conversation should cover:

  • Assessing your risk tolerance
  • Adjusting your portfolio to reduce fees
  • Volatility control
  • Ways to reduce risk while still working toward your goals
  • Comprehensive institutional money management

Tax Planning

Your comprehensive retirement plan should include ways to decrease tax liabilities, including:

  • Assessing the taxable nature of your current holdings
  • Possible IRA planning
  • Strategizing ways to include tax-deferred or tax-free money in your plan
  • Strategizing which tax category to draw income from first to potentially reduce your tax burden
  • Discussing ways to leverage your qualified money to leave tax-free dollars to your beneficiaries

Health Care Planning

Today’s retirees need a plan to address rising health care costs with minimum expense. Strategies should include:

  • Looking at all aspects of Medicare parts A, B and D
  • Analyzing options for a long-term care plan

Legacy Planning

It’s important that your hard-earned assets go to your beneficiaries in the most tax-efficient manner. Your adviser should work collaboratively with a qualified estate-planning attorney to help you:

  • Maximize your estate and income tax planning opportunities
  • Protect any assets in trust and ensure they are distributed probate-free to your beneficiaries
  • Prevent your IRA and other qualified accounts from becoming fully taxable to your beneficiaries upon your death

If you’re paying somebody for advice and they’re not talking about these five areas, most likely you’re missing out. (If you’re doing it yourself, good luck.)

Right now, I know, it looks easy. We’re in an 8½-year bull market, and it’s hard to imagine anyone getting it wrong.

But there’s more to retirement than buying and selling. There are 30 or more years of financial security at stake. For that, you need a comprehensive plan and a specialist’s guiding hand.

Kim Franke-Folstad contributed to this article.

Investment Advisory Services provided by Hobart Private Capital, LLC, an SEC Registered Investment Advisor. Securities offered through GF Investment Services, LLC. Member FINRA / SIPC. 501 North Cattlemen Road, Suite 106, Sarasota, Florida, 34232. Phone: 941-441-1902.

About the Author

Chris Hobart, RFC, IAR

Founder, Hobart Financial Group

Senior investment adviser Chris Hobart is the founder of the Hobart Financial Group, based in Charlotte, N.C. A graduate of the University of North Carolina at Chapel Hill, he is a Registered Financial Consultant, Investment Adviser Representative and licensed insurance agent. He is a nationally recognized financial commentator and frequently appears on CNBC, Fox Business, CBS and local Charlotte news programs.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The Berkshire Hathaway Portfolio: All 41 Warren Buffett Stocks Ranked
stocks

The Berkshire Hathaway Portfolio: All 41 Warren Buffett Stocks Ranked

The Berkshire Hathaway portfolio is a diverse set of blue chips, and increasingly, lesser-known growth bets. Here's a look at every stock picked by Wa…
November 16, 2021
Should You Take an Extra Big RMD This Year?
required minimum distributions (RMDs)

Should You Take an Extra Big RMD This Year?

Sometimes only taking the minimum IRA distribution can be a costly mistake. When deciding how much to withdraw this year, you need to consider the big…
November 23, 2021

Recommended

The Most-Overlooked Tax Breaks for Retirees
Tax Breaks

The Most-Overlooked Tax Breaks for Retirees

Unfortunately, seniors often miss tax-saving opportunities that are available to them. Don't let that happen to you!
December 3, 2021
How 10 Types of Retirement Income Get Taxed
retirement

How 10 Types of Retirement Income Get Taxed

When you're planning for retirement, it's fun to contemplate all the travel and rounds of golf ahead of you, but don't forget about taxes.
December 3, 2021
12 States That Tax Social Security Benefits
social security

12 States That Tax Social Security Benefits

You may have dreamed of a tax-free retirement, but if you live in one of these states, your Social Security benefits may be subject to state taxes.
December 2, 2021
18 States With Scary Death Taxes
inheritance

18 States With Scary Death Taxes

Federal estate taxes are no longer a problem for all but the extremely wealthy, but several states have their own estate taxes and inheritance taxes t…
December 2, 2021