If you’re within 5 years of retirement, you’re in a critical period – if you take action now, you may still be able to make up for past mistakes. The decisions you make now will define your retirement lifestyle and your ability to retire successfully. This checklist is designed to highlight your strengths and weaknesses for retirement preparation.  

Do you want financial peace of mind? Contact Prime Wealth Advisors and see how we can help.

Pillar #1

A Holistic Income Strategy

• I know how much I will need to cover my expenses each month in retirement (~80% of your current monthly budget is a solid estimate).
• I have estimates for how much extra I will spend each year on travel, home improvements, gifts, medical care, and other one-off expenses.
• I have a clear understanding of the guaranteed income I will receive from sources such as Social Security, pensions, annuities, veteran’s benefits, etc.
• I understand that a retired couple could need $300,000+ to cover healthcare expenses after age 65, and my income plan accounts for those expenses.
• My income strategies account for inflation (if I need $100,000 this year, I will need ~$186,000 in 20 years to have the same quality of life at 3% inflation).
• I understand all my Social Security options and how to maximize my guaranteed lifetime income.
• My spouse and I have coordinated our claiming strategies to help maximize our income.
• Our income strategy helps protect a surviving spouse from loss of income.
• I have adequate liquid cash on hand for emergencies and unexpected expenses so that I’m not forced to liquidate investments.
• A financial professional has looked over my income strategy to identify any problems or mistakes.

Pillar #2

A Market Readiness Strategy

• I have completed a risk questionnaire and understand all the risks I’m taking with my retirement savings.
• I understand that my investing strategy will need to change in retirement so I don’t run out of money later in life.
• My income strategy includes guaranteed income to help protect my lifestyle from market volatility.
• I understand “sequence-of-returns” risk and that withdrawing too much when my portfolio has lost value can have a lasting negative effect on my retirement.
• I have run multiple portfolio scenarios with different growth and inflation assumptions and am confident that my withdrawal needs are “safe.”
• My income plan is flexible, and I’ve planned for the inevitable ups and downs of the stock market.
• A financial professional has reviewed my market plan and assumptions to identify any problems.

Pillar #3

A Forward-Thinking Tax Strategy

• I have reviewed my strategies in light of recent changes in tax legislation to make sure I’m using every opportunity to potentially lower my taxes now and in the future.
• I understand how Taxable, Tax-Deferred, and Tax-Free wealth buckets work, and my drawdown strategy helps maximize my after-tax income.
• I understand that Medicare and Social Security depend on the future fiscal stability of the U.S.
• I understand that the debt held by the U.S. is expected to break historical records by the 2030s (surpass 100% of GDP) and that my future tax rates are likely to increase.
• I am staying abreast of changing tax rules and working with a financial professional to proactively plan for future taxes.

Financial Advisor Services Tailored to Your Retirement Goals

Your financial advisor should not insist there is only one optimal strategy for retirement saving and investing.  Rather, this professional should present numerous retirement investing strategies for your review, highlighting those that are optimal for your unique position.  Your financial advisor should be willing to custom-tailor the subtleties of the selected strategy to your idiosyncratic financial picture.

Recognize the Importance of a Collaborative Financial Advisory Firm

Financial advisors worth their keep do not operate in silos.  Elite financial advisors embrace the opportunity to collaborate with others, continue to learn, and retain an open mind.  Your financial advisor should work hand-in-hand with other professionals including estate planners, tax specialists, and even attorneys to provide truly comprehensive retirement planning that accounts for all potential challenges. This cohesive approach to financial planning accounts for longevity risk while fully personalizing investment strategies to each client’s unique financial picture, ultimately setting the stage for a truly enjoyable retirement in Scottsdale, Sun City West, or another part of Arizona.   At Prime Wealth Advisors our mission is to help our clients achieve a secure and comfortable retirement. We take the time to get to know our clients and their unique situations and then work with them on a financial plan. We are able to offer planning, investing, insurance, tax, and legal services to our clients-all under one roof. Contact us today for a complimentary consultation.

Sources & Disclosures

1 https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs

2 https://thehill.com/policy/finance/541675-debt-to-break-wwii-record-by-2031