5 Retirement Planning Questions

Even when you’re a week away from retirement, there’s a good chance that you’ll have a lot of questions left. Retirement planning is evolving, and if you want to secure your retirement and sleep well at night, you need to have answers to a few crucial questions.

We’re going to outline retirement planning questions that we receive most often from our clients.

In fact, we’ve compiled a list of five questions that everyone hoping to retire can answer.

5 Retirement Planning Questions and Answers to Secure Your Retirement

1. How Much Should I Have Saved?

How much money is enough for your retirement? This is a difficult question to answer because every family and lifestyle is different. We’ve seen families have millions of dollars in their retirement accounts and struggle through retirement.

Adversely, we’ve seen families with just a few hundred thousand in their retirement accounts have a fantastic retirement.

The total retirement portfolio amount is relative to a family’s lifestyle.

There is also a school of thought that for retirement, you should:

  • Save 25 times your highest-paid salary

Instead, we like working through the numbers for ourselves. If a person has a pension, rental income or other debts or income that factor into the equation, they may need significantly less or more than this figure.

The question of saving enough is understanding how much you plan to spend in retirement. If you want to go on lavish vacations, you’ll need to have more in retirement than the person that’s paid off their home and wants to live a quiet life.

2. When is the Best Time to Take Social Security?

Our number one YouTube video with over 100,000 views focuses on whether a person should take Social Security at 62 or 65. In fact, you can watch this video right on YouTube here.  

Many people are taught to retire at 70 because that’s when you’ll receive the most money from Social Security.

And that’s true.

If you live until you’re 90 or 95, take Social Security at 70. However, what if you lived to 72? You would have been if you had taken Social Security at 62, right?

The answer comes down to this:

  • If you retire early, do you need to take money out of your retirement account to cover Social Security if you don’t take it? For example, do you need to take out an extra $2,000 from your accounts per month to hold off on taking Social Security? If so, you’ll likely benefit from taking Social Security early.
  • If you don’t need the money from Social Security right now, wait until you’re 70 because it will maximize your benefits.

Unfortunately, there’s no one-size-fits-all answer here. 

3. Should I Rethink My Risk Exposure in My Retirement Accounts?

When we have troubling times in the market, many people question their risk exposure. If the market fluctuates, you need to think about your risk exposure. In fact, you should always think about risk exposure to safeguard your retirement.

The way we handle risk is by:

  • Taking your retirement total
  • Understand risks
  • Learning when you get uncomfortable when there are losses
  • Creating a portfolio around being uncomfortable

If you have $1 million, it is crucial to know that if you lose 20%, you’re losing $200,000. Many people will feel uncomfortable at a 10% loss with this retirement amount, but if you have $10 million, you’re likely less scared to lose 10% of your money.

In short, you always need to consider your risk before and during retirement to ensure that you can have a comfortable retirement.

4. Is an Annuity a Good Option for Retirement?

Annuities often have the most questions about when knowing where to put their money. Unfortunately, annuities are very complex, but we do have quite a few articles on annuities that we’ve linked below for you:

Simply put, there are three reasons why you may want to look at an annuity as a good option for your retirement:

  1. You want to build an income that will last a lifetime.
  2. You don’t want to go into bonds and are looking for a safe alternative.
  3. You want to invest in the market and want tax deferral.

For most people, the first two options are the main reasons to have an annuity. Bonds aren’t doing well right now, so an annuity is an excellent option to consider.

5. How Will Taxes Affect My Retirement?

Taxes are always on people’s minds. From a tax perspective, retirement accounts often have their own rules on taxation. For example:

  • 401(k) / IRA are pre-tax
  • Roth accounts are tax-free
  • Brokerage accounts are taxed on gains or losses throughout the year

Each of these retirement buckets has different taxation rules. Then you have Social Security, maybe pension income and so on that may be taxed. People who take Social Security and are still earning an income really need to think about their taxation because they will need to pay taxes on these accounts.

When you’re 72, you’ll need to take the required minimum distributions.

Tax-deferred accounts require you to take required minimum distributions, which will impact your taxes.

Roth conversions are a very powerful option that does apply to some retirees. The idea is to pull money from an IRA and put it in a Roth account, which is tax-free. Since taxes are likely to go up, tax planning is crucial to help you reduce your taxes in the future.

We can even walk you through a retirement-focused financial plan where we answer all these questions and help you fully understand what it means to retire in your situation. If you’re interested in talking to us, we have a 15-minute, complimentary session where we can discuss these details with you.

We have also linked a free course of ours below to help you get started on the right path to retirement.

Click here for our FREE course on how to secure your retirement in 4 easy steps.

Investment Portfolio Strategy

Risk is a major concern for people nearing and in retirement. When you’re younger, you can withstand higher risk, and you have time for the economy to correct itself even after a significant downturn.

For example, when the market crashed in 2008, many people lost money and had their retirement plans upended.

If you were 70 at the time and had most of your investments in stocks, especially riskier stocks, you didn’t have the same luxury of a 30-year-old who is still:

  • Working to bring in income
  • Actively able to wait out the crash

When you secure your retirement, your investment portfolio allotment should change to be less risky. As we have seen after 2008, there is a trajectory where people are very cautious with their investments after a significant loss, but now, people tend to enjoy more risk.

The fear of the market crashing is well behind us, so risks tend to increase in an investment portfolio.

Risks should be adjusted on your own basis. We promote a risk adjustment portfolio because it helps you sleep well at night and secure your retirement the way you want.

What is a Risk-Adjusted Portfolio?

A risk-adjusted portfolio, for most people, will mean that they want an adjustment to their asset allocation. For example, asset allocation may include buying smaller pieces of the market, such as:

  • Small-cap funds
  • Mid-cap funds
  • Large-cap funds
  • Commodities
  • Tech stocks
  • Pharmaceutical stocks
  • Bonds
  • Treasuries
  • Etc.

If you’re 70 years old, you’ll probably mitigate risks by putting more money into bonds because they’re a safer investment option. Many people create a 60/40 portfolio, where 60% is in equities and 40% is in bonds and safer investments.

Unfortunately, this allocation method may still be too risky for some retirees.

A good example is if you had 60% in the S&P 500 index and 40% in the AGG index (basically a bond index). As you saw in 2020, the S&P fell over 30% and even further in 2008, 60% of your money can lose 50% of its value overnight.

When it comes to returns, there are two things to consider:

  1. Year-to-date returns, which are how much the stock or portfolio netted you in the last year or a specific year.
  2. Max drawdown is where a portfolio goes up, peaks, and goes down. Peak and bottoms aren’t the best ways to look at investing, so we like to look at yearly changes because markets fluctuate, and max drawdown can be very emotional to see.

Since 2001, the max drawdown on a 60/40 portfolio is 36.7%. If you look at this from a retirement standpoint, how would you sleep at night knowing you lost nearly $370,000 or the $1 million you saved for retirement?

Most people would lose sleep over this figure.

Investment planning helps you lower the max drawdown. However, every investor has their own way they want to invest. Traditionally, you’ll find two main trains of thought when investing:

Our approach is slightly different, and it has worked well for our clients.

Risk Adjusted Portfolio by Supply and Demand

The supply-and-demand concept is simple: when things are in demand, let’s be a part of it, and if it’s not in demand, let’s not be involved. What does this mean in the world of investing?

If stocks are doing exceptionally well, we can go all-in on them with 100% of assets.

When risks get higher, we might go all into bonds or move most of a portfolio into bonds. On the other hand, if things get bad, it may mean putting 100% of our money into cash and holding it until other investments start recuperating and going back up.

Supply and demand allow us to make smarter investments, make money and fight back against risks, too.

A recent example of this happened in March of 2020:

  • The pandemic hits, not many people have been through one, and the market falls 34%.
  • A risk-adjusted portfolio helps protect against that.
  • Our risk-adjusted portfolio fell just 9%, while non-risk adjustments led to 34% losses.

The current state of bonds is a prime example of when bonds don’t work. Inflation is leading to the potential of an interest rate increase, which will lead to lower bond returns. Negative bond returns occur when interest rates rise, and the Federal Reserve is planning to raise interest rates to slow inflation.

So, what does someone trying to find an alternative to bonds do if bonds are at a negative return?

Fixed annuities may be an option because they do offer safe growth. These annuities are an insurance option, and when the bond market falls, this is an option. However, returns are more conservative.

These annuities do have liquidity issues to consider.

For example, most annuities only allow you to take out 10% of your investments a year. You’ll have access to this money, but the limit does make it less inviting to invest in annuities.

We like to put some money into annuities while also diversifying into other options, such as the stock market. Diversifying allows you to access 100% of the liquidity of non-annuities while accessing 10% from the annuity per year.

Final Thoughts

Risk adjustment is a major part of smart investing, but there are multiple ways to adjust and tackle your risks. While we’ve covered a few ways in this post, you may have another risk adjustment method that you prefer.

The idea is to know the many options available to you so that you can adjust your risk in a way that makes the most sense to you.

Do you need help with retirement planning or with an investment portfolio strategy? We can help.

A good place to start is by taking out 4 Steps to Secure Your Retirement Video Course.

However, if you want to connect with us to review your investment portfolio and seek one-on-one investment advice, schedule an introduction call today.

What is Legacy Planning?

Retirement planning is at the forefront of many people’s minds when they near retirement. You’ve worked diligently to save for retirement, and the big payoff is finally nearby. However, you may also want to start thinking about legacy planning.

We recently had a chance to sit down with Angelina Carleton to discuss designing your legacy plan.

Who is Angelina?

Angelina was a commercial real estate broker 10 years ago and worked with multimillionaires. She was working at an event where the topic was private prisons. As she looked around the room, she questioned whether these individuals realized that they were profiting off the misery of others.

As she went to her car, she asked herself if it was time to leave the commercial real estate sector and go into coaching.

What if she could convince all the financial representatives at the event to invest in something other than private prisons? Through her research, she couldn’t find a coach to help her create a legacy.

What was the solution?

Fill the gap. Angelina realized through her coaching that once people change, it impacts others around them, too. Angelina has helped others figure out their legacy plan and helped them reach this goal.

What is Legacy Planning for Angelina?

For many people, legacy planning means leaving money to their kids or grandchildren. People think of their homes, money, and other material things, but legacy planning is much more than that.

Angelina’s definition of legacy planning is a bit different than the definition you’ll find in the dictionary.

For Angelina, legacy means integrity and being true to yourself while being here. Of course, you can leave money to friends and family. However, people also want peace of mind in the legacy that they leave behind.

When coaching, she can help people get “unstuck.”

She wants to help people understand why they do what they do during their lifetime. When a person can get to know themselves beyond their careers, they can truly see what their theme is in life.

Unfortunately, many people don’t allow themselves to become who they really are until retirement.

A person may be a leader in the business world, but that doesn’t mean that they want to be in this position. Instead, through coaching, Angelina helps people open to who they really are at a younger age so that they can leave behind their own legacy.

A few questions to ask yourself are:

  • If you didn’t have to impress anyone, who could you be?
  • If you didn’t have to get it right, what could you create?
  • If you had nothing to prove, what would your legacy be?

For many people, they can’t answer these questions immediately. However, in one, two or four weeks, people have the answer because they allow it to marinate.

When you don’t have to fit a certain mold, you can create the true legacy that you leave behind. The legacy that goes beyond assets and talks about the way that you live your life, too.

Leaving Your Legacy Plan Behind

Angelina asks to tape all her sessions with clients, and if they approve, she gives them a big book of all the key points that were discussed during the coaching contract. These books can help you leave the legacy you want behind.

For example, let’s say that you run a family business and want to leave it to a successor.

When the successor goes into the head role, they may or may not be ready for this big role and responsibilities. They may not know the company’s:

  • Vision
  • Mission statement
  • Values
  • Guiding principles
  • Etc.

Aligning these values and principles is important because when these individuals come into an inheritance, whether it be money, a business, or others, it can help them create the legacy they want.

Who Should Be Designing Their Legacy?

Surprisingly, designing a legacy isn’t for everyone. Generally, people who have had coaching of some kind in the past excel in designing their legacies. Coaching is a broad term, but this can be people who have worked with:

  • Sports coaches
  • Business coaches
  • Personal trainers
  • Etc.

There needs to be a high level of trusting the process when working with a coach to really extract the maximum value possible.

Legacies aren’t for the lucky. They are only for those willing to perceive.

Angelina’s approach to legacy planning is a lot different than the normal financial legacy planning that we’re used to in our practice. Instead, this is an approach that looks at your life and what it means to truly be yourself.

Instead of an estate plan or financial legacy, this is the legacy of what it means to be you, including your values, guiding principles and beliefs.

For example, some of the clients Angelina is working with have started to try and save the planet and solve some of the problems in the world. This is the type of legacy planning that Angelina has to offer.

If you need help finding the true legacy you want to leave behind, you can go to Angelina’s website to see what she is all about. 

Click here to go to Angelina’s website.

There are many approaches you can take with legacy planning. If you need help with the financial side of legacy planning, we can help. Simply call us at (919) 787-8866 or click here to schedule an introduction call with us.

What’s the Best Diet for Digestive Health?

Digestive health is crucial to maintaining your overall health. While we mainly focus on retirement planning and how to secure your retirement, today, we’re going to be talking to a digestive health expert.

If you maintain good digestive health, you’ll improve your overall health, too.

As someone who is already retired or planning to retire, it’s crucial that you focus on your overall health. And your digestive system plays such a key role in your health. Dr. Norm Robillard spoke to us on our podcast this week, and he has excellent insight into maintaining the best digestive health possible.

Who is Dr. Norm Robillard? How Did He Get Started in Digestive Health?

Dr. Robillard is 65 now, and as a worker in the biotech industry, he started getting chronic acid reflux 17 years ago. He started taking medicine to help calm his symptoms, but nothing really helped. Prior to this, he never started a diet until his son said, “Hey dad, let’s go on a low carbohydrate diet together.”

Before losing a pound, he started to feel significantly better.

Removing carbohydrates improved the acid reflux so much that he started to dig into the science behind carbs. As a microbiologist already, he developed a new theory on the underlying cause of acid reflux. Since Dr. Robillard has grown many of the intestinal microbes in the lab before, he knew that these microbes:

  1. Prefer carbohydrates as fuel
  2. Produce multiple forms of gases

Dr. Robillard’s hadn’t been working well since he was in his 40s. He believes that many of the carbs he ate were escaping digestion in the gut and fueling those microbes that produce gas. His theory was that these microbes led to pressure in the gut, causing acid reflux.

Ultimately, he left his career as a microbiologist and started the Digestive Health Institute.

Now, Dr. Robillard consults with patients that have:

  • Acid reflux
  • GERD
  • IBS
  • Other gastrointestinal issues

Dr. Robillard’s Fast Tract Diet

Diets seem to pop up every year, and people often gravitate to Paleo, Keto and other really popular diets. For many people, these diets work wonders and help them lose weight and reach their dietary goals.

However, the Fast Tract Diet focuses on your digestive health to help you overcome some of the unpleasant digestive-related issues that you may have, such as GERD, acid reflux or IBS.

The Fast Tract Diet is on its second clinical study to see how it helps 90 people overcome acid reflux. Dr. Robillard was truly the first case study into the diet, and he went on a low carbohydrate diet.

However, it wasn’t until writing his first book that a close friend asked him a very important question: is it all carbs that are bad, or are some carbs worse than others?

That led to research on which types of carbs are hard to digest and are fermentable by bacteria. A few carbohydrates that made the list include:

  • Fructose – well-studied and a large portion of the population cannot digest fructose
  • Lactose
  • Sugar alcohols
  • Fibers

But this turned into a difficult question of how to create a way to utilize this diet in the real world. The answer was using the glycemic index to create a diet to understand what sugars may be left in the digestive system to ferment.

Through his own equation, which adds sugar alcohol and fiber into the mix, he developed the Fast Tract Diet.

The new equation leads to a new measurement: fermented potential (FP).

FP allows dieters to better understand how much of their food may become fermented. While some fermentation is good, too much is bad. Western diets are far less diverse than in other parts of the world, leading to a digestive system that doesn’t work as well.

Working With Your Diet to Fight Back Against Digestive Issues

The Fast Tract Diet is more of a program than a diet. Followers of the diet get access to an app that allows them to rapidly work through the program with an abundance of information at their fingertips.

  1. Work on diet and digestion. A focus on FP points is crucial to keeping fermented material under control.
  2. Focus on underlying causes of digestive issues. Don’t worry – the book covers all of these causes.
  3. Behavioral. Your behaviors can aid in your ability to digest your food properly. Meal spacing, intermittent fasting and timing of meals are all part of your behavior.

If you’re not allowing five hours between meals, your gut bacteria may be overfed, leading to more issues.

The Fast Tract Diet considers many factors that aren’t focused on with other diets.

For example, you may be eating rice, and it’s good for you, but how are you cooking it? Even when choosing rice, you need to choose rice that is:

  • Easier to digest

Jasmine rice, for example, digests quickly, but you want to keep it to half a cup of rice to stop blood sugar spikes from occurring.

Fast Tract Diet puts all of this information to the forefront so that there’s an easy diet to follow that will allow you to maintain a diet that doesn’t make you feel bloated or cause acid flare ups.

Supplements and Digestive Health

Supplements, especially some probiotics, can help you keep your gut healthier, too. There are digestive enzymes and probiotics that can help aid in your digestion. In addition, stool analysis can be very beneficial because you can see which enzymes are low and not allowing your digestive system to run optimally.

In this case, you can supplement with certain enzymes that can help with digestion.

Apple cider vinegar may be beneficial for some people, but it depends on the type of reflux. If you feel like you have a sore throat or lump in your throat, apple cider vinegar is not a good option for you.

Dr. Robillard covered an immense amount of material with us, and it can be difficult to follow everything precisely. If you want to find out more information on the diet, you can follow the link below to the Digestive Health Institute.


If you need help trying to find peace of mind in your retirement, we can help.Click here to read our newest book, called Secure Your Retirement.

Retirement Strategies

Retirement requires unique strategies to help you live the lifestyle you want when you retire. Since every firm is set up differently, it’s crucial to understand the differences between retirement strategies and how these firms work to secure your retirement.

In this post, we’re going to shed some light on how we’re set up as a firm and how many others are, too.

However, we’re not here to sell you on one strategy or firm style versus another. Instead, we’re going to explain the options you have available to find a solution that works best for you.

How Most People Enter the World of Retirement Planning

Many people start really thinking about retiring and delve into the world of investing once their career picks up. For most people, they’ll follow a few steps:

  • Set up an investment account, put money into the account and watch the stock rise or fall
  • Start putting money into a 401(k) at work

As you start thinking more about your financial future, you’re likely going to want some help from a financial advisor. These are professionals that will help you invest your money in a way that best meets your retirement goals.

With that said, the firm’s approach and retirement strategies may be different from what you would expect.

Ideally, you’ll talk to 2, 3 or even 5 financial planners, and you’ll quickly start to notice that each recommends a different approach to meet your financial goals.

What are the approaches you’re likely going to come across?

Investment Advisor

An investment advisor is who you seek out when you’ve invested some money on your own, but you want some professional help managing your portfolio. These professionals will help you invest and grow your portfolio.

Unfortunately, these advisors won’t assist with:

  • Tax planning
  • Estate planning
  • Etc.

If your sole goal is to grow your money in the markets, an investment advisor offers exceptional services to help you achieve this goal.

Hands-off Financial Advisor / Plan Creator

If you have the mentality that you want to execute a plan on your own but need someone to help you develop the plan, there is an advisor that can help with that, too. These professionals will:

  • Create a financial plan
  • Allow you to execute the plan

These hands-off professionals offer you a one-time fee plan that will take all of your goals into account and devise a plan to meet these goals. Unfortunately, if your goals change in the future or something doesn’t go as expected, there’s no additional help provided due to the one-time fee.

One-stop Shop

A one-stop shop is what we’ve tried to transition into with our business, and it’s a more robust solution for our clients. When working with a one-stop-shop, you receive help with:

Using a holistic approach, these advisors will work with you to meet your retirement goals and your lifestyle goals.

When you’re working on your retirement strategy, you may want to:

  • Hire a professional who does everything for you
  • Work with someone on just investments
  • Execute a plan from a professional

Thankfully, the financial industry has professional advisors who can help you through each of these categories. Some clients want to be very hands-on with their retirement planning, while others want to understand the plan yet want someone to handle all the logistics.

Why a One-stop Shop or Comprehensive Service is What We Offer

Throughout the years, we’ve learned a lot about our clients. While everyone has their own preference on how to handle retirement, many people want someone who can help in the various areas of retirement, such as estate planning, tax planning and everything else.

In fact, we have built out our services to the current state, which looks something like this:

  1. Build a retirement-focused financial plan
  2. Create an income plan
  3. Build out an estate plan

We’ll even work with your CPA or other advisors to help ensure that we’re all on the same page and working to create the retirement you envision.

Truly, the financial plan we create is the foundation of our client’s success. Once we have this plan in place, we can begin looking at investments, taxes, estate plans and more.

When we create a retirement financial plan, we look at multiple parts:

  • Where you’re at today with your retirement
  • What your goals are for retirement
  • How many years out you are from retirement
  • How much have you accumulated?
  • How much will you continue to accumulate until retirement
  • Your lifestyle wants in retirement

Once we go through all these points, we have a much clearer picture of what your retirement can look like and how to reach this phase in life. We’ll then look at lifespan and delve into estate planning.

If you think there will be money left after retirement, you can then start deciding who to leave your money to when you’re gone.

However, we also answer questions on:

  • When it’s best to retire
  • If you retired today, what your finances would look like
  • Survivorship questions and so much more

Building out the foundation of your retirement plan allows us to see what happens if you need long-term care or a spouse dies. Or, if you purchase another house, how would it impact retirement?

Multiple Financial Professionals Under One Roof

When you work with a one-stop-shop or comprehensive financial planner, you’re opting to work with someone who can bring in other professionals to help you. We’re not accountants, but we have accountants that we work with who help our clients deal with:

  • Tax strategies
  • Tax planning
  • Retirement account conversions
  • Etc.

Since we put this system together, there are no additional charges for speaking to one of these professionals.

When choosing someone to help you with your retirement plan and strategy, it’s crucial to ensure that these professionals evolve and change over time. Economies and markets are changing, and if the person you trust with your retirement planning doesn’t evolve, your retirement will suffer.

If you need help trying to find peace of mind in your retirement, we can help.
Click here to read our newest book, called Secure Your Retirement.

New Tax Laws 2022

A new year brings a variety of new tax laws to concern yourself with. For anyone working on their retirement planning or in retirement, it’s crucial to keep on top of the new tax laws in 2022 because they will impact your plans – even slightly.

Ordinary Income Tax Changes

Your ordinary income tax, or the taxes you’ve paid all your life, aren’t going to see many changes in 2022. We’re seeing a few tax brackets, including:

  • 10%
  • 12%
  • 22%
  • 24%
  • 32%
  • 35%
  • 37%

Earnings will determine which bracket(s) you fall into this year. While the percentages haven’t changed this year, the income ranges have changed. For example:

  • Income of (single: $10,275 or married: $20,550) or below – 10%
  • Income of (single: $10,276 – $41,775 or married: $20,551 – $83,550) – 12%
  • Income of (single: $41,776 – $89,075 or married: $83,551 – $178,150) – 22%
  • Income of (single: $89,076 – $170,050 or married: $178,151 – $340,100) – 24%
  • Income of (single: $170,051 – $215,950 or married: $340,101 – $431,900)– 32%
  • Income of (single: $215,951- $539,900 or married: $431,901- $647,850) – 35%
  • Income of (single: $539,900+ or married: $647,850+) – 37%

However, if you make $432,000 as a married couple, you would be in the 35% tax bracket. Due to being in the tiered tax system, you would pay into all the previous tax brackets. The first $20,550 is taxed on 10%, the amount of money from $20,551 to $83,550, you’ll pay 12% and so on.

So, you’re not paying a flat 35% in taxes. In fact, you’re only paying 35% on $99 if you made $432,000.

You can determine your effective tax rate by calculating the sum of the money you pay in taxes divided by your adjusted gross income. For example, if you paid $100,000 in taxes on an adjusted gross income of $432,000, you would use the following equation to determine your effective tax rate: ($100,000/$432,000) * 100 = 23.15%.

If you have a Roth IRA, you can convert some money to remain in your tax bracket using a Roth conversion.

For example, let’s assume that:

  • You have an adjusted gross income of $85,000
  • You want to convert as much as possible and stay in your tax bracket of 22%

In this case, you can convert from $85,000 to $178,000 at the 22% tax bracket

If you need someone to walk you through these figures based on your exact income, we can help you with that. In fact, our software will outline all these scenarios for you to help you better understand what you can do with your money to save on taxes.

Click here to schedule a complimentary call with us.

Note: Tax cuts were put in place under the Tax Cuts and Jobs Act of 2017. These tax cuts are set to expire in 2026, but this can change if no changes are made by then. In 2026, this would mean that a person in the 12% tax bracket would be bumped up to a 15% tax bracket. A few other brackets will go up, too.

Standard Deduction Changes

The standard deduction has gone up in 2022, but it is a small increase. However, when trying to secure your retirement, every dollar counts. Changes to the standard deduction are:

  • Single person: Deductions are up from $12,550 to $12,950
  • Married person: Deductions are up from $25,100 to $25,900

While the increase is small, it is an excellent way to save a little more money. Standard deductions come directly off your income every year. Let’s assume that you make $50,000 as a single person. The standard deduction pushes your adjusted gross income to $37,000.

Itemized deductions may also be an option for you.

However, due to the higher standard deduction, it may not be in your best interest to itemize deductions anymore. You really need to sit down with a CPA who can look over your current income and tax situation to find the best strategy to keep your tax burden down.

401(k), 403(b), 457 Plan Changes

Are you doing salary deferral into one of these retirement plans? If so, there have been changes that allow you to put a little bit more money into these accounts. The maximum that you can put into these accounts has gone up $1,000 from $19,500 to $20,500.

On top of that, if you’re over age 50, you can make a catchup contribution.

If you’re over 50 this year, you can make automatic salary deductions of up to $20,500 and put up to $6,500 as a catchup this year. These catchups allow you to put $27,000 into these accounts in 2022.

SEP Plans for the Self-employed

A self-employed pension plan, or SEP plan, works like a 401(k) and IRA hybrid. You can contribute $61,000, up $3,000 from the year prior.


If you have an FSA or HSA, the contribution limits on these two also went up.

  • FSA – From $2,750 to $2,850
  • HSA – From $3,600 to $3,650

Capital Gains Changes in 2022

New tax laws for capital gains are also in place in 2022. For example, if you have a stock with a capital gain and sell it prior to one year, it’s a short-term capital gain that is considered regular income.

However, if you held the same stock for over 365 days, it’s a long-term capital gain.

In 2022, you can have a long-term capital gain of $83,000 without having to pay taxes on it. However, there are a few calculations that you need to know here:

  • You can go up to $517,000 with a 15% tax rate
  • $517,000+ has a 20% tax rate

It’s important to note that these factors do not count for a 401(k) or your normal retirement accounts.

Social Security Taxes

Social Security is taxed for some individuals, and this is a shock for many people. Social security is taxable if you are:

  • Married and have an income of $32,000 to $44,000 per year. Up to 50% of your social security income is taxable.
  • Married and making over $44,000 in annual income. Up to 85% of your social security income is taxable.

Keep in mind that the figures are different if you’re single. 

An example to go with these figures is to assume that you have $2,000 a month in social security and have a taxable income of $40,000. You’ll have to pay taxes on $1,000 of the $2,000 you have from Social Security in this scenario.

Medicare Part B Premium Rise

In 2021, if a person made $0 to $176,000, premiums for Medicare Part B were $148.50. However, in 2022, this premium is now $170.10. Since these are monthly premiums, this is a major difference.

If you make over $182,000, you will pay a higher premium based on a tiered rate.

While the premium increase may not seem earth-shattering, it is still worth considering.

Social Security Under Full Retirement Age

If you’re taking Social Security and are under the full retirement age, you can make $19,560 before being penalized at age 62. Retiring early and drawing Social Security while still having a part-time job can have penalties attached, which every retiree should know.

Roth IRA Contribution Changes

A Roth IRA allows you to contribute the following amounts per year if you earned the following:

  • $6,000 for anyone under 50
  • $7,000 total for anyone over 50

You can only contribute what you earn, up to the above amounts. Additionally, there’s a phase-out at $198,000 for married couples filing jointly in 2022. However, if you make $208,000, you cannot contribute to the Roth account.

Roth IRAs are an excellent account to consider because money can grow tax-free in these accounts.

While this is a lot to take in, it’s crucial that you talk to a CPA to discuss the options you have available to better understand recent tax changes.

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Economy Forecast for 2022

In our most recent podcast, we were able to sit down with economist Andrew Opdyke to discuss what to expect in the economy in 2022. If you want to listen to the podcast, we encourage you to sign up here.

When you’re working to secure your retirement, the economy will have a major role in how your portfolio will perform.

The forecasts for 2022 are never set in stone, but they can help you get an understanding of what type of fluctuations your portfolio may see this year. However, before we dive into some of the questions we discussed with Andrew, let’s look at what transpired in 2021.

2021: Year in Review

For many people, 2021 was an interesting year because of everything that happened in 2020. At the end of 2020, vaccines came around, and many people viewed 2021 as a recovery year. But unfortunately, we’re still talking about COVID-19 to start this year.

Massive vaccinations have taken place, with signs that the latest wave of COVID-19 from the Omicron variant may lead to less hospitalization.

However, in 2021, we saw some differences in the market, such as:

  • Strong profit growth from S&P 500, small- and mid-cap
  • Emotions led to some volatility
  • Double-digit growth for many stocks

Overall, 2021 was a good year for retirement planning and the market because major companies still posted high profits.

Entering the 2022 Year

Heading into 2022, we’re expecting less of a change in volatility and business going forward. We expect that in 2022, the pace of growth will moderate as businesses want to see if they can get jobs back and continue growing.

With that said, the supply chain is a major concern.

Supply Chain

The world hasn’t seen a supply chain issue like we have had since the pandemic. At the beginning of the current wave of the virus, we’re also seeing supply chain issues that are leading to:

  • Rising inflation
  • Slower product delivery

Large numbers of truckers and other people involved in the supply chain are off work because they’re sick or recently tested positive for COVID. As a result, the supply chain has slowed to start off the year.

However, we see the supply chain recovering.

Shutdowns and shelter-in-place orders are unlikely in 2022, and we expect that this will allow people to continue going to work. We expect 300,000 to 350,000 jobs added per month. If we’re correct, the job figures in 2022 will pass the pre-COVID figures by the end of the year.

Ultimately, we’re still down 3 million jobs to start the year, but it’s widely expected that this figure will continue to drop as we move into the mid-year.

Demand remains very high now. The stimulus helped with this to some extent, so there may be some slowing here. Stimulus checks aren’t coming again, as far as we know, but demand remains incredibly high, which is good for business.

Inflation Predictions

Inflation may continue to rise to start the year. Supply chains are still running, albeit slightly slower due to the recent variant. 

The good news?

In mid-2022, it’s fully expected that inflation will begin to taper off and fall back to traditional ranges of 3% to 4%.

Politics and How It Plays In the 2022 Economy

Politics will always play a role in the national economy, and there are a few things we’re seeing right now that may impact the economy this year:

  • Massive infrastructure bill discrepancies
  • Child tax credit may not be in play

Also, 2022 is a mid-term election year. In November, there will be some disruption in the political sphere which may help or hurt agendas going forward. The infrastructure bill is still in the works, and there’s hope that it will pass in some form.

Adding in infrastructure right now will take a few years to really pick up the pace, even if the bill was to pass today.

Due to a lack of capacity, there’s no feasible way to see crews on the road next week building bridges if the bill passed today. These types of bills and their impact take a while to be put in place logically once they pass into law.

Build Back Better Bill

The Build Back Better bill, which has been tampered down, has a lot of corporate tax hikes associated with it. The closer we get to reelection, the less likely we will see this bill pass. Politicians don’t like to raise taxes during an election year, so it’s a bill that is likely not going to pass in 2022.

Maybe the package passes at $1.5 trillion or less, but if it does, there’s also a good chance of a party change on the House level as a result.

Markets That May Recover Due to a Current Lack of Manpower

In 2020 and 2021, earnings growth numbers were substantial in 2021.


The drop in earnings in 2020 put the benchmark low and kicked off tremendous growth in 2021. However, 2022 is likely to see growth fall out of the double digits for these companies and back into the 8% to 9% range.

Market growth rates are expected to fall back to typical levels.

Also, price-to-earnings for many companies is expected to really play a factor in stocks readjusting. Many companies saw these values increase on expectations that never materialized.

Of course, there’s also a price concern as inflation rises and perhaps demand falls, leading to better prices for consumers but lower earnings for corporations.

Earnings quality will matter a lot in the coming year.

Small- and medium-sized businesses may also start to come back if we can tame COVID and avoid another shutdown. While mega-caps did well in the past year, these smaller companies are set to come back a little stronger in 2022.

With that said, keep a few points in mind:

  • Markets are unlikely to grow at the same rate as they have over the last 2-3 years
  • Companies with solid profit margins will continue to do well
  • Small- and medium-sized companies may experience the most gains

Expectations of super growth need to be tamed because the high growth is unlikely to continue in 2022 because it really can’t.

Concerns and Expectations for the 2022 Year

Government and Federal concerns exist because the response on these levels will have a major impact on the markets. The response to inflation will be a major focal point because the government downplayed inflation, stating that it was just short-term.

However, we’re now seeing that inflation isn’t short-term and is still sticking around.

The Fed did start to change its tune at the end of 2021. If the Fed addresses inflation, it will help keep the economy high. Unfortunately, if the Fed doesn’t raise the interest rate and tackle inflation, it will lead to market volatility.

We certainly need to keep a close eye on what the Fed does to fight inflation.

If nothing is done to tame inflation, we expect it will significantly impact the markets going into the end of the year.

Surprises and Bright Points in 2021

One of the best points of 2021 was that we learned:

  • People adapt
  • Companies adapt

From an economic growth standpoint, we’re at a new growth high that hasn’t been seen since the 80s. We’re also producing more with 3.5 million fewer workers, so all of these are very bright spots for 2021.

The embracing of technologies and productivity tools will continue to help the market in the coming years.

Earnings growth was real in the past year, but now it’s time to move into 2022 and hopefully return to the fundamentals.

Hopefully, in 2022 we go back to the fundamentals where there are no questions of stimulus, supply chain issues and shutdowns. The last time we’ve seen the money in the system that led to growth was after WWII.

In fact, the funds pushed into the market led to the industrial revolution.

Now, with the influx of cash in the market and government dollars, we may be on the cusp of a new revolution in 2023 and beyond. It’s an exciting time to look at the year ahead and see what companies can make happen with all the money available and in high demand.

The markets may not grow like they did in 2021, but the possibilities in 2022 and 2023 are impressive and should provide long-term, sustainable growth.

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2022 Retirement Issues to Consider

January is here, and while you may have quite a few goals ahead of you this year, one of them should be your retirement. Whether you’re retiring in 2022, 2026 or just retired, there are a lot of things to consider.

Everyone, depending on their situation, needs to think a little about their retirement.

We ask you to start right now by writing down your goals, such as:

  • Savings goal
  • Income goal
  • Family goal

Even if you’re retired, you should have a goal. Maybe 2022 is the year to see family members you haven’t seen in a long time. January is the time of year to set goals, and it is so emotional when you look back at your goals and notice that you’ve checked a few goals off your list.

However, we’re going to be diving into other retirement issues and what we recommend that you do to start the year off right.

Getting Your Cash Flow in Order

If you’re still saving, you’re on the accumulation side of cash flow. Right now, you should sit down and consider any extra cash you may have from:

  • Raises
  • Side hustles
  • Business opportunities
  • Work opportunities

Understanding your cash flow is crucial, and it’s important to know whether you can expect any additional or less income this year. Make notes on the income and expense side of cash flow.

You might have paid off a mortgage – which is huge – and that’s going to drastically change your cash flow.

Knowing how much cash you have available allows you to contribute more to your:

  • 401(k)
  • IRA
  • Roth IRA
  • Etc.

You might find that you can work towards maximizing out your 401(k) this year. If you have a spouse that doesn’t work, they can also contribute to an account in their name based on your income to reduce your tax burden further.

Anyone qualifying person with a Roth IRA can contribute to their account with tax-free growth.

Cash flow has a lot of moving parts, but it’s an area that you really want to focus on this year when planning for your retirement. 


If you have certain benefits, you may want to begin thinking of ways to maximize certain accounts, such as your:

  • HSA
  • FSA

With an FSA, you need to use a certain amount of money or lose it this year. Take the time to ensure that you’re utilizing this money so that you don’t waste it.

Retirees – those lucky folks who are already enjoying life after work – you need to think about:

  • Required minimum distributions (RMDs). You will be required to begin taking these distributions at 72. You’ll suffer a significant penalty if you miss your RMDs.
  • Qualified charitable distribution (QCDs). You can use an RMD to donate to charity.

You need to take the start of the year to really look at your cash flow, all the money coming in and going out, and make a yearly plan on what steps you need to take this year for your retirement. 

Next, we’re going to be talking about another major consideration: assets.

Asset Overview

You need to have a thorough review of your assets at the start of the year, and you need to look at emergency funds, savings accounts and so on. For example, if you have a lot of money in the bank, you might want to think about putting some of this money into an account that can earn interest.

You might want to investigate opening a brokerage account, bonds, or something other than a savings account that earns you very little.

Next, you need to consider risk tolerance.

What is risk tolerance?

How much risk can afford to lose in the market? For example, if you have $100,000 and you lose 10%, are you okay with losing that money? If so, think about whether you had $1 million and lost $100,000 of that money.

In both cases, you’re down 10%.

It’s crucial to review your risk tolerance. Major events can change your perspective, too. A few major life changes that add or remove risk are:

  • Marriage
  • Paying off a house
  • Loss of a spouse
  • Etc.

Risk is always evolving, and you need to reallocate your assets as your risk goes up and down.

Additionally, we’re in a market where interest rates are very low. Mortgage rates are still under 3%, which is very beneficial. So, if you are interested in refinancing, now is the time to consider it because we may never see rates this low again.

Debt reduction is a major part of your wealth, so it’s crucial to consider:

  • Refinancing
  • Paying off credit cards
  • Tackling high-interest debt

Debt holds you back from reaching your financial and retirement goals, so work towards eliminating it in any way that you can.

Tax Issues and Concerns

Taxes are coming up, so it’s time to expect your 1099s, W2s and so on. Unfortunately, the government isn’t going to offer an extension this year – not yet. So, April 18 (it’s a little different this year) is the tax date.

A few of the things we would like you to do to jumpstart your tax planning are:

  • First, contribute to your IRA, which is allowed until your filing date.
  • Track your realized gains and determine whether you have losses that can offset these gains.
  • Consider your Roth conversions. These must be done by 12/31, so start thinking about that now.

You’ll also want to begin gathering all your documents, including any information on charitable donations, to have everything you need when you go to see your tax advisor.

Finally, we want to discuss a few legal issues and concerns.

Legal Considerations Going Into 2022

Annually, it’s crucial to review your estate plan and ensure that you have all of your most important documents in order. Primarily, there are two main documents that we’re going to talk about, but there are many that need to be considered.

The two big ones are your:

  • Power of Attorney
  • Medical Power of Attorney

If you’re married and have an IRA, your spouse cannot access the accounts without a Power of Attorney. Families that rely on IRAs to pay their bills will need to have a Power of Attorney because if it’s not present, there’s no way to legally access the money in the account.

You’ll also want to consider reviewing, creating, or updating your:

  • Will 
  • HIPPA forms
  • Etc.

It’s crucial to have all these documents updated if you have already created them. 

It’s easy to procrastinate when you have an estate plan because no one wants to think about their demise. But unfortunately, we’ve seen far too many people think they’ll live forever and something drastic upends their plans.

You can’t predict the future, but you can opt to put all your estate planning documents in place to ensure that all your wishes will be followed if you pass on or become incapacitated.

While there’s a lot to think about in 2022, it’s crucial to begin thinking about the points above now.

You’ve worked hard to get where you are in life, and a quick annual checkup of things will allow you to continue living the life that you built for yourself.

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A Teenager’s Guide to Achieving Financial Freedom

Recently, we were able to sit down and speak with Dan Sheeks to discuss a topic that many of our podcast listeners and blog readers are interested in teaching financial freedom to teenagers. A lot of parents want to help their kids reach financial freedom in life.

Dan Sheeks is the author of First to a Million: A Teenager’s Guide to Achieving Early Financial Independence.

While we help clients with retirement planning and are certified financial planners, we don’t have the expertise to really help teenagers make pertinent financial decisions. Dan, on the other hand, does.

Quick Background on Dan Sheeks

Dan aims to pass information to young people to help them learn about money and make the right financial decisions. Dan has taught in high school for 20 years. He focuses on business classes, such as personal finance, marketing, and others.

Sadly, he has found that very few states have a requirement to teach kids about financial literacy.

Dan started a blog and created an online community for young people who are motivated to make sound financial decisions, investing and more. 

Dan decided to write his book First to a Million as a natural offshoot of the online community. In the book, he teaches teens how to reach early financial independence.

Understanding the FIRE Movement

FIRE is a movement that stands for:

  • Financial
  • Independence
  • Retire
  • Early

FIRE is a community that is based on making different financial choices early in life that allow you to become financially free before the age of 65. Many of these people create the financial freedom that will enable them to choose where they spend their time.

If teenagers start with the right financial outlook and foundation at a young age, they have the opportunity of reaching true financial freedom early in life.

How to Motivate a Teenager to Look at Their Financial Future

Teenagers, like adults, must make their own decisions in life. However, there are things that you can do to pique the interest of a teen. Unfortunately, you can’t make a teen want to look at their financial future.

With that said, if you teach the teen about the following concepts, they may take an interest:

  • Compound interest
  • Financial figures

Dan recommends that parents take a proactive approach to make financial literacy fun. For example, if you want to get your child interested in finances, you can:

  • Show them your 401(k)
  • Ask them to plan your next vacation
  • Request the teen create your food budget

If you take small steps to educate your teen and teach them the basics of finances, such as budgeting, it can make a world of difference in their lives.

Helping a Young Person with a Credit Score

As someone with a teenager, credit has always been interesting to me. I helped my son’s credit by having a joint credit card, but that doesn’t seem to matter in the world of business. My son started his own business, tried to get a credit card, and he was denied, even with a 740-credit score.


He didn’t have a credit history.

When asking Dan about his thoughts on parents helping their children build credit, he said:

  • Add teenagers to your existing card as an authorized user. Additionally, call the card issuer to ensure that they will report the history to the child’s credit report.
  • Teenagers should ask their parents to add them to a credit card.

Since a teen is still living at home, parents can use this strategy to really analyze their child’s spending habits. You can set consequences for charging too much and even require your teen to pay all or a portion of the charge.

If the teen is an authorized user, they’ll begin building credit at a very young age, which is crucial for everything, from getting a personal loan to a mortgage or auto loan.

Teenagers should also:

  • Apply for their first credit card at 18
  • Apply for their second card at 19
  • Apply for their third card at 19 and a half

Use these cards monthly and pay them off every month. Obviously, the teen needs to learn what responsible credit card use means. Three credit cards can help a teen build credit rapidly, but they cannot go out and max out these cards.

For example, a smart strategy for credit card use is to use one card for food, one for gas and one for something else. Then, each month, pay the card off so that you’re not accruing interest, but you are building your credit.

What Teens Will Learn in First to a Million: A Teenager’s Guide to Achieving Early Financial Independence

In Dan’s book and workbook, teenagers will learn:

  • How to build their credit score
  • Responsible credit card use
  • Good debt and bad debt
  • Real assets vs false assets
  • Opening their first brokerage account before 18 and after
  • Investment options, such as index funds
  • Tracking expenses
  • High savings rates

However, the real purpose of the book is to teach a mindset. The book is truly meant to show that living the American Dream doesn’t mean following the same path everyone else has in life.

You don’t need to go to college, have 2.5 kids, a house with a picket fence and plan to retire at 65.

Instead, Dan introduces options to teens to show them that they don’t need to work until 65. Of course, everyone has their own goal and picture of their ideal life. However, the book shows teens the options they have available to them.

As a teacher, Dan explains tough topics in a way that makes it easy for everyone to understand. Also, everyone who owns the book has access to the community Dan created online.

Anyone who joins the community can support each other, tell their stories, ask questions, and really help each other by surrounding themselves with others interested in the same concepts. 

Through the community, young, like-minded people can interact with each other and really learn more about reaching their financial goals together.

First to a Million: A Teenager’s Guide to Achieving Early Financial Independence is available on BiggerPockets. Additionally, anyone who signs up for the paid version of Dan’s community can enter the code “secureyourretirement” to receive a discount.

What To Consider About Long-Term Care

What To Consider About Long-Term Care

Long-term care and retirement planning work together to ensure that when you secure your retirement, you’ve also accounted for the possibility of landing in a long-term care situation. Many people know that they need to think about it, but they push the concept aside because it’s expensive.

A few of the questions clients come to us with are:

  • Should you self-insure?
  • What type of insurance should you get?

However, before we dive into these questions and more, you also need to consider that a very high percentage of couples, around 80%, will have one who will go into a long-term care situation.

The individuals who do enter some form of long-term care may not need extensive care or stay in a care situation for an extended period. On average, a person will spend 2 to 2 and a half years in long-term care.

Transferring Risk with Insurance

Long-term care is expensive. However, you need to determine what may happen and the risks of having insurance versus not having insurance in place. Once we have an idea of what the costs of long-term care will be, then it’s time to evaluate if:

  • Long-term care insurance is the best way to mitigate risks
  • You have more than enough in retirement funds to pay for care out of pocket

Understanding some of the basic numbers is an excellent way to gauge the risk of long-term care and what these actual risks mean to your future finances.

Nursing Home Care and Assisted Living

Every year, we’re provided with basic numbers on how much nursing homes and assisted living facilities will cost you. We receive average monthly costs by state, but the national average monthly costs in 2021 are:

  • $8,517 for nursing home care
  • $4,051 for assisted living

Of course, these are averages, so the cost may be higher or lower in your area.  For example, we’re in North Carolina, and the average monthly costs for care in our state in 2021 are:

  • $8,060 for nursing home care
  • $3,800 for assisted living

If you live in a state like California, you can expect nursing home care to cost $11,000 and assisted living to cost $5,000.

In all cases, the costs for care are very high.

Additionally, due to rising inflation, a 60-year-old can expect these care costs to double in 20 years. So, if you hit 80 in 20 years from now, you can expect the national average monthly cost of care to be $16,000 – $17,000 per month.

Inflation rises about 4% per year, so it’s easy to see why long-term care and retirement planning must be considered together.

If you must stay in one of these facilities for four years, you’re looking at spending $830,000 on the low end for care.

What are Your Options to Afford $830,000 in Care Costs?

Most people we talk to don’t have $830,000 sitting around waiting for their potential long-term care. However, you do have a few options here:


If you self-insure, what this really means is that you have enough money sitting around at this point in retirement that you can pay for your long-term care costs. You might be leaving less to your family by self-insuring, but your nursing home or assisted living costs will be funded by you.

Self-funding offers many options, such as:

  • Take out $1 million in life insurance so that when you do pass away, your self-funding doesn’t take away from the inheritance you leave behind.
  • Take out traditional, long-term care insurance.

If you want to secure your retirement and don’t want to self-fund your care costs, you can take out long-term care insurance. However, many people have concerns about this type of insurance because you’re paying for something you may never use.

Additionally, and we’re seeing this a lot in recent years, premiums are skyrocketing.

Some clients of ours have had their premiums double in a year.

Hybrid policies do exist, which may be something to consider if you’re planning your retirement. A few of the hybrid policies that we’re talking about are:

  • Annuity / Long-term Care. Place $100,000 into the annuity, and $300,000 goes into a long-term care policy. In this scenario, the money in the annuity will gain some interest, and if you die without going into care, that money will go to your beneficiaries. You can also take money out of the annuity if you need it without any penalties.
  • Life Insurance Hybrid. A hybrid life insurance policy often has additional features that are of interest to people. For example, you can put a lump sum of money into the account with 100% liquidity and an interest rate of 2% to 4%. The long-term care benefit comes out of the potential life insurance money. If you die without touching this money, your heirs will receive a multiplier of what you put into the policy. Premium options also exist to fund the policy. In this scenario, you’ll either leave money behind in the life insurance or through long-term care benefits.

We know that this is a lot to digest and understand in one sitting. When we work with clients one-on-one, we put these figures into the life insurance analyzer to have a clearer picture of self-funding and available insurance options.

Facts and figures give direction for people who are planning their retirement.

If you have a plan in place, we run the numbers to see what your retirement looks like at 70, 80, 90 and beyond. Then, using what-if scenarios, we can show you what retirement looks like if you use long-term care benefits, or you stay healthy until the day that you die.

Using the right approach, we can see the possibilities of self-insuring and what your heirs will have left when you die.

We encourage you to run figures, sit down with a certified financial planner and even schedule a 15-minute phone conversation with us.

Click here to schedule a free, 15-minute consultation with us.

Retirement Before Medicare

Medicare begins at age 65 for people in the United States, so if you enter early retirement before this threshold, you’ll be retiring before Medicare. Most people that come to us will say that they want to work until 65, 66 or even 70.

Since we believe in retirement planning using concrete data, we’ll plug in the person’s figures and forecast what their retirement may look like.

For some people, they’ll find that they have significant money leftover at age 90, so they want to see what happens if they retire at 62. We can easily run these forecasts, but there are a few things that occur when you start thinking of retiring early.

Early Retirement and a Few Factors to Consider

If you can secure your retirement by 60, it’s a wonderful feeling. You’ve done everything properly, and now you’re able to enjoy your life a little more. However, if you do retire early, there are some factors you need to consider.


Medicare is going to be unavailable until you’re 65, and if you’re no longer working for a company that offers health insurance, you’re now on your own. Health insurance expenses will be a major factor, especially with rising insurance costs.

Lost Income Potential

If you retire before 65, you’re no longer paying into Social Security, nor are you able to allow your investments to accumulate as much money as you would if you stayed in the workforce. Of course, this is a tradeoff of early retirement, but it’s something to consider based on your current financials.

Potential retirees that are trying to make all the calculations on their own may miss crucial factors that help shape their retirement plans. We use special software that can easily be adjusted to add in:

  • Special expenses
  • Fun funds
  • Additional expenses or income

Running what-if scenarios, such as retiring before Medicare or if rates rise for Medicare, can help you better understand your retirement potential.

While you may be a master of Excel, it’s far too easy to miscalculate your funds or miss a calculation that throws off your retirement figures in both directions.

Real-time output and reports are crucial to outline whether you have enough money to secure your retirement and what can happen if you do retire before you’re eligible for Medicare.

Social Security

Another thing to consider if you’re retiring early is that you will pay less into Social Security. You can start Social Security as early as 62, and your contributions stop at 70. For some people, they plan on retiring at 65. If you’re working and have ample income, it doesn’t make sense to take Social Security.

Instead, in the scenario above, it makes the most sense to let your Social Security build so that it’s higher when you do retire.

Some people will retire at 65 and not take Social Security until they’re 70 to maximize their benefits. We like to run figures until a person is 90 to have a good idea of what it means to take Social Security.

Ideally, we run figures for taking Social Security at:

  • 65
  • 67
  • 70

It may seem like a no-brainer to take Social Security at 70 because that’s when your benefits will be their highest. However, if you must take money out of your retirement account because you stopped working at 65 and don’t take benefits until you’re 70, this will impact your retirement, too.

For example, if you still have $500,000 in retirement funds at 90, why would you wait to retire?

You’re unlikely to use all your retirement before your demise at that point. If you’re holding out on Social Security and continue working to maximize these benefits, will they really matter in the whole spectrum of things?

There’s a lot to think about if you plan to retire early, and it’s a very individualized thing.

You might want to help pay for a person’s wedding, renovate your house, and make other big purchases. If you’re retiring before Medicare, these expenses may be fine, or they may leave you taking money out of your retirement accounts earlier than expected.

If you do plan to retire a little earlier, we recommend running the figures to have a clear picture of:

  • What your health insurance costs will be.
  • What happens to your retirement accounts because you’re paying for insurance out of your investment accounts?
  • Etc.

Ideally, you’ll work with someone, like us, who can run the numbers for you to plug in all these variables and what-if scenarios. We can even forecast what happens if you plan to retire at 55, so you can have a clear picture of how realistic retirement is for your situation.

If you need help running these reports and want to know what your retirement before Medicare may look like, schedule an introductory call with us.

How to Have Peace of Mind During Troubled Times

Omicron is here, and it’s a variant that has taken over the news lately. Dealing with bad news means learning how to have peace of mind during troubled times for investors and retirees alike.

If there’s one thing that the pandemic has shown the world, it’s that markets can take a nosedive during a health crisis.

Anxiety and stock market volatility can last for days – or weeks – and trying to find peace of mind and secure your retirement can be difficult. So, we like to create a structure when retirement planning that allows us to handle market fluctuations even during a pandemic.

How People Have Been Trained to Mitigate Investment Risks

The most common form of investing (and it’s something that you might do) is to buy and hold. Investors have been advocating the buy-and-hold strategy for a long time. For example, you purchase Amazon stock and hold it.

However, over the years, portfolio diversification has become more popular.

For example, you may invest in:

  • 401 (k)
  • Stocks
  • Bonds
  • International stocks

You may buy a section of the market, such as a large-cap or small-cap, or you may buy into energy. Asset allocation works by buying a little piece of everything with the hopes that your portfolio makes money.

Annually or quarterly, you may reallocate your investments, and you’re certainly reducing your risks.

However, it’s also difficult to withstand a pandemic when the market as a whole tumbled 34% on news of the virus. Buy and hold investors took the brunt of the stress at this time because they saw losses of $34,000 for every $100,000 invested.

Our Approach to Mitigating Investment Risks

Now, we’re going to share our investment strategy with you today. We use this very strategy to help our clients through retirement planning, but we’re not saying that this is the only way to invest.

For us, we find the following approach to work very well.

However, you need to find a strategy that works best for you and your unique investment goals.

You may want to take a different approach – that’s fine. We’re just going to explain what works for our clients and us so that you know all of the options available to you.

How We Handle Risk Mitigation

When we invest, we don’t invest based on:

  • Gut feelings
  • Forecasts
  • What we think will happen in a market

Instead, we use data to help us monitor what the market is doing. When you use data to make decisions, you remove all of the emotion and attachment to investment from an equation.

If you can, think back to January 2020, right before the market was thrown into a tailspin on the news that this thing called the coronavirus was spreading in Wuhan and is now a major global concern.

No one could forecast that COVID-19 would take over the world in just a few months.

Did you know in December 2019 and January 2020 that the entire world would change? Of course not. Since we use active management, we were able to analyze the data and eventually pulled all of our clients’ money from the market.

We sat on cash for several months because it allowed us to negate the stock market losses.

Our clients had their portfolios fall 9% instead of 34% for those that kept all of their money in the market. We like to think of this as a race among three major players:

  1. Stocks
  2. Bonds
  3. Cash

Cash only does well when stocks and bonds are falling, so we saw these signals and made the decision to go into cash.

When we re-entered the market, we also used the data available to us to make the switch. For example, we use firms that collect data for us that we can analyze monthly and quarterly.

After the pandemic, we entered small-cap funds before the data signaled that it was time to go into mid-cap and large-cap stocks. Ironically, the news at the time we re-entered the market was doom and gloom.

If you just looked at the news, you would have sleepless nights filled with worry and fear that you’ll never be able to recuperate your losses. However, about 40 days after we pulled out of the market, the data was telling us it was time to reinvest.

Emotionally, we were scared to go back into the market, but we listened to the data.

At the end of the year, our growth portfolio rose 19% after fees in a year when many people sustained massive losses.

Feedback From Clients During the Pandemic

Our clients were emotionally invested in their portfolios, and we gathered a lot of feedback from them during the start of the pandemic. People were rightfully scared of what the market would hold for them after the dust settled.

Most of our clients said, “We understand why you call yourself Peace of Mind.”

We deal with retirees and those ready to retire. Our clients were given regular updates. We were honest and open, telling our clients, hey:

  • Stocks are dropping, so we’re reallocating to bonds
  • Bonds are no longer working, so we’re going to sit on cash

We were giving updates every few days. When clients realized that they would have lost a ton of money if we just relied on the buy and hold strategy, they gained a lot of trust in us.

Since we navigated clients out of the market crash, they trusted us going back into the market.

Now, we’re back in the same scenario with Omicron. We don’t know what the future holds with this new variant or if the Fed will step in to prop up the market. However, what we do know is that the data will tell us what key steps to take next with Omicron and any other variant that may pop up.

If you need help trying to find peace of mind in your retirement, we can help.

Click here to read our newest book, called Secure Your Retirement.

Tax Planning for Retirement

One of the things we deal with routinely for people retiring or already in retirement is concerns about taxes. People are very worried about their taxes. After all, you’ve worked diligently to build up your retirement, so the last thing that you want to do is give more money back to the IRS.

Luckily, we were able to sit down with Steven Jarvis, a tax professional, to help answer some of the most common questions our clients have about taxes.

But first, we want to cover the many different types of tax planning professionals that you may come across.

Tax Professionals You Might Come Across When Seeking Help

Depending on your situation, there are a lot of options for taxes:

  • DIY software
  • H&R Block
  • Accountant or CPA

If you have uncomplicated taxes, software may be a good option for you. Software is very powerful, but it’s very easy to make a mistake when you go beyond the basics. 

Ideally, you may want to work with a full-service CPA. 

When you dive into tax strategies, a CPA is almost always the best option because they go beyond algorithms.

Working on Tax Strategies

Tax strategies are important, but there are many different aspects. For a lot of people, they feel like taxes are a black box that they put money into without many options available. In fact, a lot of people view their taxes as being painful.

However, working with a CPA ensures that you don’t leave the IRS a tip.

You need to pay every dollar that you owe, but you should never leave the IRS a tip.

When you’re only worried about filing a tax return, this is tax preparation. If you’ve ever gone to an accountant, handed them a stack of papers, and simply waited for a tax document that you can file, this is tax preparation.

However, you always have tax planning to consider. Tax planning allows you to look a year or two ahead, and then find ways to reduce your future tax bill. When you engage in tax planning, you’re not worried about preparing taxes this year, but rather, what you’ll need to pay in the years ahead.

A Deeper Look into Tax Planning

When tax preparation and planning work together, it truly works to your benefit. Tax planning often comes in around November, which allows you to make adjustments at the end of the year to help reduce your tax burden.

Everyone worries about taxes rising in the future.

Roth conversions are a hot topic right now, and they’re a good way to really look at tax planning on a deeper level.

When we’re talking about Roth conversion accounts, these are tax-deferred retirement accounts. Tax planners will consider whether a person’s taxes will rise. For example, will your taxes rise because:

  • Your income rises to a new tax bracket?
  • The IRS decides to increase taxes?

If taxes are never going to rise, your choice doesn’t matter. However, Congress can raise taxes next year, and you might benefit from paying your taxes now at a lower rate than in the future at a higher rate.

How much you convert also needs to be considered on a personal level.

You might want to fill up a tax bracket, but it really depends on your required minimum distributions and other factors.

Often, when people retire and finally draw from all their income buckets, they’ll move into higher tax brackets than they were in during their working years.

Tax Changes That May Come About in the Future

Tax codes are written in pencil, so any predictions on future taxes are just that – predictions. Unfortunately, we’ve seen that in recent months, where each proposed tax bill is altered and doesn’t look anywhere near the same as its original draft.

However, one very important topic to consider is that Congress may get rid of backdoor Roth contributions.


Backdoor Roth contributions offer the option to have pre-tax and after-tax dollars in the same account. As you can imagine, this strategy can be very effective, but proposed changes would disallow this strategy.

Tax strategies allow you to make the best decision for the future based on today’s tax code.

However, an annual review of your strategy is crucial because we are dealing with taxes that can always evolve and change.

Click here to schedule an introduction call to discuss your taxes further.

Federal Reserve, Inflation and the Economy

We’ve seen a lot of headlines lately, as we’re sure you have, about the federal reserve, inflation and the economy. At the time of our podcast and writing this, Jerome Powell remains the Fed Reserve Chairman.

One thing we want to make clear is that throughout this article, we’ll be going over recent headlines.

Of course, at the time of reading this, we may have new information or outcomes for these headlines. But the good news is that the information should remain relevant.

What Jerome Powell Being Nominated as Federal Reserve Chairman Means

Jerome Powell is loved by some and not by others. There are two trains of thought here, and these are:

Side 1: People That Like Jerome Powell

A lot of people like Jerome Powell because he likes to print money. He wants to keep the economy moving aggressively, and for some people, they believe printing money will benefit the market.

Side 2: People That Dislike Jerome Powell

On the other side of the spectrum, there are concerns that printing money will cause long-term inflation, which is never a good thing.

Working as a Financial Advisor Through Federal Reserve Chairmen

Since we work with so many people nearly or in retirement, we get a lot of questions from both sides of the argument. For example, some clients want to invest heavily in the market because they believe that Powell will help the market soar, and others want to invest in financial vehicles that rise with inflation.

Our clients want us to forecast the future to try and determine what will happen if Powell is chairman.

For example, a client may ask us:

I’m concerned and excited about Powell’s reinstatement. Can we invest in something that protects against inflation and still reaps the benefits of the market?

Unfortunately, this is a loaded yet common question when dealing with inflation. What we believe is that two things need to be actively managed:

  1. Active investments in the market
  2. Overall retirement plan

Active management is important because trying to predict an outcome for an ever-changing market is a gamble. We would rather not gamble with our clients’ money, so we use the data that we have available at any given moment in time to make smart investment decisions.

Markets and investments can change rapidly in just a day or two, and active management helps our clients avoid major losses in the process.

We have a lot of passionate investors.

For example, some investors learn a lot about a particular company, love the direction and vision of the company’s CEO, and they put all their faith in this individual that they’ll help the company grow.

Unfortunately, there’s a lot of guesswork going into the scenario above that can lead to losses.

Through active management, we invest based on what’s happening now.

If inflation continues to rise and the pressure of inflation exists, we’ll adjust portfolios in three main categories:

  1. Equities, which are stocks
  2. Fixed income, such as bonds
  3. Cash

We recommend putting all three of these categories in a race to see who is winning in today’s market. At the time of writing this, equities are performing exceptionally well towards the end of 2021.

Using a number-oriented form of investing, we recommend:

  • Reallocating investments based on what’s happening now
  • Adjust as required

There are also some sides of the market where people would rather split their investments among the three categories above, so the investor may decide to invest 33% in all three categories and go with the flow.

Instead, we believe active management is the right choice because it reduces the risk of volatility.

Reactionary investing, based on headlines, is not something we recommend. Instead, use data and continue adjusting your retirement portfolio and investments to weather any changes in the market that occur today and 20 years from now.

Events Where Reactive Investing Never Works Out 100%

We’re not going to get political, but when there are presidential elections, there are many people who choose the doom and gloom path. If this Republican or Democrat gets elected, the stock market will CRASH.

Thankfully, these predictions rarely come true.

Making decisions based on assumptions never truly works out how a person thinks. We’ve been through many presidents in the last 20 years. One thing we’ve experienced, and it is rare, is that some people pull all their money out of the market because they believe a new president will cause the market to tumble.

Unfortunately, many of these individuals call us and explain how they wish they didn’t sit on the sidelines because their portfolio may have risen 10%, 20% or even more.

Another scenario is inflation.

Inflation is rising, so a lot of individuals are afraid and believe that the market will flop.

Emotions in the market rarely work out in your favor. As an advisor, we take emotions out of the market and our decisions. For example, even as surges in the coronavirus continue to happen worldwide, the markets remain strong.

Some investors feared that the market would suffer after each surge, much like it did when the pandemic first hit.

Using the data that we have available, we’re not seeing these surges impacting the market, so we recommend keeping money in the market. When the data changes, we’ll adapt our investments to minimize losses and maximize gains.

2020 Events and How We Shifted Money Going Into 2021

In 2020, the S&P 500 fell over 30%, but we did a few things:

  • First, most of our clients were sitting on cash to avoid losses in the market.
  • When reentering the markets, we took it slow and adjusted to the companies winning the race, such as technology companies.
  • January of 2021, we saw a shift where large-cap and technology started to slow and small and mid-cap companies began to revive as the market recovered. Using the race analogy, we adjusted portfolios to include more of these stocks to maximize client gains.

Since this was our first time living through a pandemic, we think we did exceptionally well for our clients and really solidified our thought process that active management is the way to go when investing.

Final Thoughts

We covered a lot in the past sections, and the sentiment remained the same: don’t react over headlines. If everyone could predict the future, we would all enter retirement ridiculously wealthy.

However, we can use the market’s data to make smart, timely investments and portfolio adjustments to avoid losses and ride gains to make the most of our investments as possible.

If you need help actively managing your portfolio or want us to run the numbers to see how we can help you grow your portfolio, schedule an introduction call today.

Considerations for Charitable Giving

If you have a charity that you’re passionate about or just want to give back, there are a lot of considerations for charitable giving that need your time and attention. One of the best feelings when you secure your retirement is having the opportunity to help others.

Of course, if you’re not charity inclined, there’s no pressure to give money away.

However, if you want to start getting involved in charitable giving, you need to first consider how to break down your income.

Simple Income Breakdown

When we first start the retirement planning process with our clients, we help them break their income down into the following:

  1. Essential needs – what you need every month to live
  2. Wants – vacations, cars, remodel a house, etc.
  3. Legacy – leaving money to children, etc.
  4. Charity 

Charitable giving does have a lot of benefits, and you can also leverage your giving to reduce your tax burden.

However, if you’re still considering charitable giving, one topic that you might want to know more about is QCDs.

What are QCDs?

Qualified charitable distributions (QCDs) are common, especially close to the end of the year. When you want to make the most efficient use of your money, you can do so with what is known as a QCD.

Many people will take money out of their bank accounts annually and give money to charity.

However, when you’re 70 and a half, you can start taking QCDs directly out of your IRA. Annually, you can take out $100,000 in QCDs from an IRA without a penalty.

If you take the money out of your IRA, you’re taking out your donation and it is not taxable.

When you turn 72, you also need to take a required minimum distribution from your IRA. Even if you don’t need the money, it needs to come out of your account. For example, let’s assume that you’re required to take $20,000 out of your IRA each year.

You’ll pay taxes on this $20,000.

QCDs allow you to take money out of the $20,000 without paying any taxes on it. For example, let’s assume that you donate $5,000 per year. If you set up a QCD properly, the $5,000 will come out of your minimum distribution of your IRA tax-free.

When you do this, you’re:

  • Maximizing your charitable distributions
  • Reducing your tax burden

So, you might be required to take out $20,000 from your IRA each year, but you’re only taxed on $15,000 because of the QCD that you have in place.

However, you need to set up your QCD properly.

How to Setup a QCD Properly

First and foremost, you want to go to the institution that holds your IRA. The brokerage is Charles Schwab, TD Ameritrade, etc. You go to this institution and:

  • Let them know you want to set up a QCD
  • Ask for the check to be made directly to the charity
  • Include an EIN
  • Include the charity’s address

A common mistake that people make is writing the check out to themselves and then making a distribution. If you make this mistake, you’ll have to pay taxes on this money.

You can then take the QCD check yourself and give it to the charity or have the check sent to the charity directly.

Ideally, you’ll hand the check to the charity yourself so that you can receive the receipt for the donation.

You must make all of your charitable contributions by the end of the year. Additionally, the charity needs to cash the check by the end of the year. While setting up QCDs may seem tedious, it’s very advantageous and can help you reduce your tax burden while offering substantial charitable benefits.

From a tax-advantageous perspective, there is one additional benefit that you’ll want to consider: stock donations. If you have a stock that has significantly appreciated in value, you can donate the stock to avoid paying capital gains on it.

However, we don’t see this scenario happen often with our clients.

Working With a CPA is Important

While you’re giving money to charities, it’s also very important to take as much tax advantage as possible. A CPA or other tax professional will be able to help you reduce your taxes when donating to charity.

A CPA can help you think through reducing your taxes.

Additionally, a CPA may also help you determine how much you can give:

  • Monthly
  • Annually

We suggest coming up with a charity-focused financial plan. We walk our clients through the entire process so that you can have a clear picture of how much you can afford to give. In most cases, we run scenarios that show you what happens if you donate a certain amount each month to your retirement plan.

Potential Pitfalls of Making Charitable Contributions

If you’re making a QCD, it’s crucial that you go through the process with a professional. You don’t want to withhold the taxes on the QCD. In some cases, you may want to take your own distribution and then another for the QCD.

Ideally, you’ll start the process early on so that you have the time to make sure that your giving works in the best way for you.

Sure, you’re donating money out of the goodness of your heart, but that doesn’t mean that you shouldn’t take advantage of the tax perks offered to you.

Also, another important factor to consider is timing.

If you decide around December 20 or later that you want to make a charitable contribution, it’s very unlikely that the process can be carried out before the end of the year. Due to the market being closed for the holidays, there is often not enough time to go through all of the processing time to use your contribution for a tax deduction.

Ideally, we recommend that you have this done in November.

Do you want to hear other important news on how to secure your retirement and take control of your future?

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