Beginner’s Guide to Retirement


Congratulations! Retirement is referred to as the golden years for a reason. It truly is the best years of your life. 

You’ve worked 30, 40, perhaps even 50 years to get to this point.

The great news is you now get to spend your hours with the people who matter most to you while using your money to create memories and experiences. 

The bad news is retirement is not what it used to be. Back in the day, you gave your two weeks, collected your pension and Social Security, and sailed into the sunset. 

That’s not the case anymore. The responsibility to transform your assets into sustainable income all while navigating the stressful world of taxes, healthcare, risk, and investments falls directly on your shoulders. 

To complicate the already complicated, there is an endless amount of conflicting information on the internet, TV, and radio that can leave you asking, “How do I know what to do?”

We are here to make this simple. Here’s what you need to do first:

Get a Written Plan

This might seem obvious, but many people simply have a portfolio of investments when they enter retirement. 

They haven’t needed a plan until retirement.

We all have two distinct stages in our financial lives, which can be likened to climbing a mountain. 

The first stage is the accumulation stage. This is where we are climbing the mountain. We are actively working and actively saving in account primarily designed for accumulation.

The purpose for saving and growing our assets, is by the time we have the opportunity to retire, these accounts will be large enough to support our lifestyle in retirement in addition to Social Security or a pension if we are fortunate to have one. 

The second stage of our financial life is the distribution stage, or the decent down the mountain. And this is where you must have a written retirement plan in order to successfully navigate your path. 

A properly constructed retirement plan address six specific financial categories. It must align all six categories to have them work harmoniously together. 

The six categories are: income, expenses, investments, protection, taxes, and healthcare. 

Maximize Guaranteed Income

Retirement income planning is about cash flow. How much is coming in the front door compared to how much is headed out the back door. We’ve seen couples with $100,000 retire comfortably because their lifestyle afforded them to do so while also witnessing couples with millions not have a chance at retiring unless they drastically reduced their expenditures. 

When addressing income in retirement, you must start with your guaranteed sources of income, specifically Social Security and pensions.

Establish Inflation-Adjusted Expenses

We understand that budgeting has a negative connotation associated with it. If you want to buy something, you should buy it without a down-to-the-dollar budget telling you otherwise.

This is why we recommend to all our clients to create a spending plan. It doesn’t matter how much you’re spending on your country club membership or your classic car collection. What matters is that you know how much you’re spending on those things.

The spending plan should be comprised of two different sections:

Essential. These expenses are necessary to stay alive. This includes your mortgage, groceries, utilities, property taxes, etc. 

Luxury. These expenses are equally important but will fluctuate far more frequently than essential expenses. Common luxury expenses include vacations, eating out, streaming subscriptions, hobbies, etc. 

Be conservative when you’re completing each section. Retirement is not about tightening the belt. It’s about wisely spending and enjoying your money. 

You then must inflate your expenses on an annual basis. This should be between 2.5-3% per year. This means that prices will increase by 2.5 percent over three decades. In other words, your favorite box of cereal that costs $5 currently will cost $12 or more over the course of your retirement. 

Invest Intentionally

The key word is investing intentionally. Unfortunately, this is the area we see most retirees struggling with. 

They’re pacing to be the richest folks in the graveyard, obviously tongue and cheek, yet they’re still hesitant to spend their hard-earned savings. 

Investing in retirement should be focused on creating future income to sustain your lifestyle. Nothing more. It really is that simple. 

To accomplish this, each investment portfolio should feature investments that provide a degree of protection, liquidity, and growth. 

Your investments need protection, or preservation of principal. You’ve worked way too hard for your money to leave your  life’s work up to the flip of a coin.

Your investments need liquidity, or access. If you can’t use and enjoy your money, what’s the point of having it?

And your investments need to grow for three very specific reasons: luxury, legacy, and to keep pace with inflation.

The problem is there isn’t one investment that offers all three of those coveted features, so it requires mixing and matching until the right blend is created for your unique situation.

Protect Your Family

Without proper estate documents, all of the financial planning you’ve done can be jeopardized. 

It’s important to work with an estate planning attorney to establish which documents your individual situation calls for. 

Each document within the estate plan is used for various legal purposes, such as instructing how your assets will be distributed after your death, or appointing someone to make decisions if you are incapacitated and unable to speak for yourself. 

Reduce Taxes

Retirement planning should always operate with the intention of improved tax efficiency. 

When you’re efficient with taxes it creates more opportunity for your assets to work on your behalf, ideally growing, while also providing the ability for you to spend and enjoy more of your money.  

It also requires a significant mindset switch. When dealing with taxes, it’s easy to only think about the current year. That’s human nature. How can I pay the least amount of taxes right now? This is because we are experiencing that pain when completing our tax return. 

This mentality, however, can lead to increased taxes in the future. The mindset switch retirees must make is: How do I pay the least amount of taxes over my lifetime? 

If that potentially requires you to temporarily pay more taxes right now to greatly reduce your taxes in the future, it is something you must seriously consider. 

Address Healthcare

Healthcare in retirement is primarily comprised of Medicare and long-term care. Both are very important. 

Medicare is naturally confusing, especially if you have had the luxury of healthcare being provided by your employer. Now the responsibility falls on your shoulders, and you need to navigate the worlds of Medicare A, B, C and D. 

Then how can you address long-term care? The necessity for long-term care assistance is defined as not being able to independently perform two of the six daily living activities: bathing, dressing, eating, transferring, toileting, and continence. 

Long-term care planning must address the rising costs of these services, while keeping in mind for a married couple that the surviving spouse must still be able to maintain their lifestyle following the long-term care event. 


Ask us how we can help you worry less, spend more, and pay fewer taxes in retirement. 

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