“Often when you think you’re at the end of something, you’re at the beginning of something else.”


~ Fred Rogers

Personal Pension

Prior to the 1980s, there was an understanding that retirement funding would be based on a three-legged stool:

  • Social security, guaranteed for the rest of your life
  • Your own savings, not guaranteed
  • Your company pension, guaranteed for the rest of your life.

In 1978, Congress created the 401k, which allowed employees to deposit a portion of their paychecks pre-tax to an investment account, hopefully with a match from the employer. There are two problems here – first, the investment risk shifts to the employee (who usually does not have the resources to hire a professional to manage the portfolio) and away from the company and their professional advisors. Companies jumped on this opportunity to shy away from the risk themselves, and by the end of the 90s most companies had switched over. Today, company pensions are only available to employees of the government a select few companies that still offer them.

The second drawback is that 401K money does NOT create a guaranteed income flow for life. If not carefully managed, it will run out. For a while, experts recommended the 4% rule, which states that if you only pull out 4% per year, your retirement funds have an 85% chance of lasting 30 years. But this rule came out in the 90s, when the market was up over 1000% (driven mostly by 401k dollars flooding the market).

After the volatility of the 2000s, that recommendation has been downgraded to 2.3%. With so much uncertainty, no wonder retirees are more afraid of running out of money than they are of death!

So, what now? Fortunately, financial institutions have developed strategies that help you take a portion of your savings and create your own Personal Pension, which you can never outlive, with payouts averaging 5% – 5.5%. These strategies can provide added peace of mind, creating a dependable, sustainable income for the rest of your life.

There are many plan options, and they are not all created equal. If you are within 10 years of your retirement goal and are curious to learn more, we can help you decide what plan is best for your situation. Get in touch to learn about how you can set your retirement with income for life.


Tax Mitigation

In retirement, your largest expense won’t be housing, it won’t be medical care, it won’t even be that RV. It will most likely be taxes, especially if most of your savings are in a 401k or IRA. Every dollar you take out of these tax-deferred accounts will be taxable, and in retirement you probably have very few deductions.

Not only that, but it can lead to taxation of your social security benefits. Here is the calculation:

  • If taxable income/withdrawals + 50% of social security benefits = $32,000 or more (married filing jointly), then 50% of social security benefits will be taxable at your regular income tax rate.
  • If taxable income/withdrawals + 50% of social security benefits = $44,000 or more (married filing jointly), then 85% of social security benefits will be taxable at your regular income tax rate.

Proper planning can mitigate or possibly eliminate this social security taxation, as well as mitigate the taxes you pay. A Roth conversion may be appropriate, or if you are planning ahead, the Super Roth (link) strategy may be the right thing for you. Also, when you take money from different types of accounts can have a huge impact on the tax you pay.

We believe we all have a patriotic duty to pay as little in taxes as is legally and ethically appropriate. If you agree, we can help you put together a retirement plan that pays as little to Uncle Sam as possible.


Making Your Money Work For The Long Term



Protect Retirement Funds Against Serious Health Care Costs

Taxes may be your largest cost in retirement, but health care comes in a close second. A serious medical issue, especially chronic issues requiring long-term care, can very easily blow up even the best retirement plans, and leave a retiree or a surviving spouse destitute and requiring welfare.

Making a long-term care plan part of your retirement plan can protect your retirement funds and help them last as long (or longer) than you do.

Learn more about long-term care insurance on our website, or schedule a visit to go over your needs.