Does Your “Plan” Focus on Just One Area
I want to take a little bit of time and talk about retirement plans and specifically I want to pose a question. Does the plan you have focus on just one thing? Now first, let’s talk about what is the definition of the word plan? Well, it’s a detailed proposal for doing or achieving something. And that’s from the Oxford Language definition. So think about that. A detailed proposal for doing or achieving something. Maybe what bigger achievement do a lot of us strive for as we’re working? Well, retirement, right? So when we think of a retirement plan, it should be a detailed proposal for achieving that retirement. And so often, when folks say oh, I do have a plan and they’re kind of excited to show us or excited to talk about it. It tends to focus on one thing. And I bet you can guess what that one thing is because it’s what a lot of people have focused most of their life on when they think of retirement. The savings piece of it. The investment piece of it, right, the money. So that’s a piece of that plan, right? When you look at that, it can’t just be your 401K statement, can’t be your plan or a balance or I have “x” number of dollars saved for my retirement. That’s not a plan. That’s not a detailed proposal. What about all the other areas that we have to consider? Where’s the income going to come from? Sure, maybe a portion of that’s going to come from your investments. But Social Security, what does that look like? What are the strategies to take that? Maybe there’s a pension out there. Maybe you have rentals or other forms of income and maybe you have different tax qualified accounts of those investments as well and when should we pull funds and from where? So that’s another portion, right? Income, investments are a piece of it like we’ve talked about. Taxes, boy, maybe you’ve been deferring taxes. Maybe you got a break for putting in those 401Ks over the years. Now we have to pay the taxes. How can we do that tax efficiently? What if tax rates change? What if you’re married and maybe your spouse passes away. What does that look like? All these things that we have to encompass and consider when it comes to taxes. What about healthcare? Where are you going to get health insurance from? Maybe you’ve been getting it from your employer all these years. Are you 65 yet? Do we have to look at the Affordable Care Act? The market place? Sort of stuff like that with insurance. Do we have to look at Medicare? All these different aspects of that. Estate planning, what happens when you’re no longer here? Where do your assets need go? Do they know where they need to go? And do you have someone in place to take care of that for you when you’re gone? All these things we have to consider when we’re talking about a retirement plan. It cannot focus on just one area and all these areas have to cohesively work together. Remember, the definition of a plan, a detailed proposal to accomplish something or achieve something. So that way, you can achieve that retirement and hopefully dreams can come true that you’ve worked so hard for.