CRITICAL ELEMENTSTO A SUCCESSFULRETIREMENT PLAN

Getting ready to retire? It’s a big change, and there are a lot of things to consider. If you check these seven things off your list, you will have made a good start toward a successful retirement:

1. Retire your debt.2. Make a plan.3. Decide where to live.4. Reduce the amount of risk in your investments.5. Examine the pluses and minuses of rolling over your 401(k).6. Decide when to take social security.7. Understand Medicare and what is covered.

Retire your debt.

Make a plan.

Decide where to live.

Reduce the amount of risk in your investments.

Go on a mission to get rid of all your debt: credit cards, cars, mortgages, everything. Debt can be a heavy burden especially in retirement as you are typically on a fixed income. There are many benefits to paying off your debt including lowering your cost of living and allowing you to apply more money to your retirement account. If your income and retirement assets will be limited, lowering your cost of living will become substantially more important.

The first step in planning is to figure out where you are now. You need to know how much money you’ll likely have when you retire. Begin by adding up the sources of income you’ll have each month such as Social Security, pensions and real estate income. Then estimate your monthly cost-of-living expenses. Once you have these numbers, subtract your expenses from your income. If you’re like most people, you’ll end up with a negative number, meaning that your sources of income do not cover your entire cost of living. The next step in your plan is to multiply the difference by 12, so that you know how much you’ll need each year. For example, if your number is short $3,000 a month, your yearly deficit will be $36,000. That discrepancy needs to be made up by your investments, so you can have the money you need to enjoy the lifestyle you want in retirement. Are your saving and investing enough to produce that level of income for the rest of your life? Consider the fact that you may live a long time, so plan as if you’ll live to be 100. The average life expectancy keeps going up. It’s possible you will live to be 100. If you retire at 65, you would spend 35 years in retirement. Your investments would have to support you through inflation and bear markets for 35 years. Plan accordingly. If your investments are large enough to support your lifestyle and longevity, you can retire anytime. If not, you have some work to do to figure out how to generate the needed income or cut expenses.

Many people decide to move to a different locale after retiring. Some want to be near family. Some want to get away from the big city. Others want to live somewhere more affordable. Deciding where to live is an important facet of retirement planning. When deciding where to retire, be sure to consider taxes and healthcare. Property taxes vary from region-to-region, and states such as Florida, Alaska, Nevada, South Dakota, Texas, Washington and Wyoming have no state income tax. In addition, access to good medical care is important to most. It’s important to look beyond your active years and consider what might happen when you need more assistance.

When you are retired, you’re not on offense anymore. You’re not adding to your money anymore. You’re subtracting from it. You must play defense against inflation, taxes, bear markets, and non-recurring expenses like medical bills. Diversifying your portfolio is a good first step toward defending your capital, but it is only a portion of the bigger risk-reduction picture. Bear markets occur every three years on average and could devastate your retirement nest egg if you keep it in the market. There’s an old expression: It’s not how much you make that matters, it’s how much you keep. If you want to keep more of your money, we believe that buy, hold and protect is a much better strategy than buy and hold.

Decide when to take social security.

Understand Medicare and what is covered.

You can begin to receive social security benefits at 62. Social Security recommends you apply threemonths before you would like the first payment to arrive. However, there are consequences ofapplying for benefits at the earliest possible age. You will be accepting a monthly amount that’s25 percent below what you’d get if you wait until your full retirement age 66. If you have a choiceand are in good health, think seriously about waiting as long as you can to take your benefits (but no later than age 70).

Medicare is your primary healthcare insurance provider after age 65. However, it’s important to know what it covers. While Medicare covers many costs, it does not provide coverage for vision, hearing, dental or long-term care. There are different strategies to reduce the out-of-pocket costs you might experience including Health Savings Accounts (HSA) and long-term care insurance. Have an idea of what you’re going to have (in terms of insurance) and what you might need. You will need to sign up for Medicare three months before you are eligible (at age 65) whether you are ready to retire or not. If you are not retiring, you may want to use Medicare instead of your company’s health insurance as it may reduce your insurance expenses. You can plan for additional medical costs in retirement by adjusting your savings.

Examine the pluses and minuses of rolling over your 401(k).

It can make sense to roll over your 401(k) to an IRA so you have control over it, but as with anything, there can be advantages and disadvantages. One advantage of rolling over your 401 (k) is more withdrawal options. Taking money from your 401(k) can be cumbersome and often depending on your 401(k) there might be a limit to your withdrawals. IRAs allows for more flexibility, taking withdrawals as you need them. Another benefit is that you get more investment options. With an IRA most investment types are available to you. The benefit of having more investment options is it allows you to develop a better long-term strategy for your retirement savings. For people who are retiring before the age of 60 rolling over your 401 (k) to an IRA might not be the best option. If you retire from your current employer and are over age 55, you can withdraw funds from your 401(k) without incurring an earlywithdrawal penalty. In contrast, an IRA carries an early withdrawal penalty until after age 59 1/2. Speaking with one of our retirement specialists can help you make an informed decision on rollingover your 401 (k).

Retirement Planners of America CAN HELP. We specialize in retirement planning. Our financial advisors work with clients who are nearing or in retirement, and we regularly answer questions regarding Medicare.

Would you like to learn more?

Listen to Ken’s latest podcasts onissues that affect your Retirement.Would you like to get your

questions answered?

Set an appointment to meet with a Retirement Planners of America Advisor, who specializes in Retirement Planning, and get your questions answered.

• Learn how to maximize your Medicare benefits• Find out how to generate sufficient living income• Learn how to fight inflation and reduce your income taxes• And, how to help protect your retirement from the next market crash with our proprietary Buy, Hold and Protect strategy

Meet with an Advisor

All expressions of opinion reflect the judgment of the author, Ken Moraif, as of the date of publication and are subject to change. Ken Moraif is a controlling owner and investment adviser representative of MMWKM Advisors, LLC, doing business as Retirement Planners of America, which is an SEC registered investment adviser (“Retirement Planners of America”). Registration as an investment adviser is not an endorsement by securities regulators and does not imply that Retirement Planners of America has attained a certain level of skill, training, or ability. Recipients of this email should not rely on the email content as the sole basis for any investment deci-sions. A professional advisor should be consulted and/or independent due diligence should be conducted before implementing any of the options directly or indirectly referenced. Past performance is not indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy will be profitable or equal any historical performance levels. This email should not be construed as a solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice. Investment strategies such as asset alloca-tion, diversification, or rebalancing do not assure or guarantee better performance and cannot eliminate the risk of investment losses. There is no guarantee that a port-folio employing these or any other strategy will outperform a portfolio that does not utilize such strategies. All investment strategies have the potential for profit or loss. Any target referenced in this email is not a prediction or projection of actual investment results and there can be no assurance that any target will be achieved. Any index performance referenced indirectly in this email is for comparison purposes only. Retirement Planners of America makes no warranty, express or implied, for any decision taken by any party in reliance upon such indices or the information discussed. Investors cannot invest directly in an index. While information presented is believed to be factual and up-to-date, Retirement Planners of America does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.

2820 Dallas Parkway, Plano, Texas 75093 I Office Phone: 800-994-0302

© Copyright 2019 All Rights Reserved.

www.rpoa.com

CALL US TODAY TO GET YOUR QUESTIONS ANSWERED.