December 9, 2024 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.

Here are this week’s items:

 

How to Retire at 62 in 2026 With Peace of Mind

Radon and Murs discuss:

How to build the foundational steps for retiring at age 62 and achieving peace of mind in retirement planning. They dive into the critical questions that need to be answered, the data required to assess retirement readiness, and the steps to create a retirement roadmap. With this episode as the first of a two-part series…

 

How to Retire at 62 in 2026 With Peace of Mind

The Peace of Mind Roadmap: A Two-Step Approach

We often begin retirement planning by addressing foundational questions. This includes understanding your goals, taking an inventory of your financials, and clarifying expenses. Our Peace of Mind Roadmap process is designed to help you retire with confidence. It consists of two parts:….

How to Retire at 62 in 2026 With Peace of Mind

Retirement is an exciting milestone, yet it comes with important questions: “Have I saved enough?” and “Can I truly retire comfortably?” If you’re planning to retire at age 62 in 2026, the steps you take now will shape your financial freedom and peace of mind. This guide, inspired by our Secure Your Retirement podcast, walks you through how to prepare, what questions to ask, and how to build your personalized Peace of Mind Roadmap.

The Peace of Mind Roadmap: A Two-Step Approach

We often begin retirement planning by addressing foundational questions. This includes understanding your goals, taking an inventory of your financials, and clarifying expenses. Our Peace of Mind Roadmap process is designed to help you retire with confidence. It consists of two parts:

  1. Gathering Data: Collecting and organizing financial information, understanding your goals, and clarifying your spending needs.
  2. Building Your Plan: Analyzing your data, exploring scenarios, and developing a financial plan tailored to your needs.

Let’s break these steps down so you can start preparing your Peace of Mind Roadmap.

Step 1: Gathering the Right Data for Retirement Success

The cornerstone of any effective retirement plan is accurate and comprehensive data. Here’s what you need to consider when gathering your financial information:

Assets: Building Your Financial Snapshot

We ask clients to create a financial inventory, which helps determine if retiring at 62 is feasible. Here are the key areas to assess:

  1. Cash on Hand:
    1. How much do you have in checking, savings, money market accounts, or CDs?
    2. Understand the purpose of your cash: Is it for emergencies, investments, or daily expenses?
  2. Life Insurance:
    1. What types of policies do you have?
    2. Is the policy term or permanent? If permanent, is it intended for income, cash value growth, or a death benefit?
  3. Annuities and Non-Qualified Investments:
    1. Are your annuities growth-oriented or income-generating?
    2. Identify other investments like brokerage accounts or stock portfolios.
  4. Retirement Accounts:
    1. Document your IRAs, 401(k)s, and Roth accounts.
    2. Know your employer match for current contributions.
  5. Real Estate:
    1. Evaluate the value and liabilities of your primary residence and investment properties.
  6. Pensions and Deferred Compensation Plans:
    1. Understand the income stream from pensions, including cash balance plans or deferred compensation plans.

Liabilities: Understanding Debt and Cash Flow

Taking stock of debts is essential when planning to retire comfortably:

  • Mortgages: Determine your payoff timeline and monthly costs.
  • Car Loans: Factor in when these will be paid off.
  • Other Debts: Include liabilities like credit cards or personal loans.

Income Sources: What’s Coming In?

Your retirement plan is only as strong as its income streams. These include:

  • Social Security: Get an estimate of your benefits at 62, full retirement age (67), and age 70.
  • Part-Time Work or Consulting: Will you continue working to supplement your retirement income?
  • Rental Income: Calculate how much income investment properties generate.

Expenses: Breaking Down Spending

A well-rounded retirement plan accounts for three categories of spending:

  1. Essential Needs:
    1. These include fixed costs like mortgage payments, utilities, and groceries.
  2. Wants:
    1. Travel, hobbies, dining out, and memberships fall under this category.
  3. Legacy Giving:
    1. Charitable donations and gifts to family are also part of your financial picture.

Tip: Focus on net spending—what you need monthly after taxes. This ensures a realistic view of your financial needs.

Estate Planning Essentials

A solid plan for retirement includes preparation for the unexpected. Ensure you have up to date:

  • Will
  • Power of Attorney
  • Healthcare directives
  • HIPAA release forms

These documents protect you and your loved ones in the event of unforeseen circumstances.

Step 2: Building and Analyzing Your Peace of Mind Roadmap

Once you’ve gathered the data, it’s time to analyze it and build your Peace of Mind Roadmap. This is where we apply financial modeling to answer the critical question: “Does my plan work?”

Scenario Analysis

In your Peace of Mind Roadmap, we create various scenarios to test the strength of your plan. For example:

  • What if inflation rises faster than expected?
  • How will healthcare costs impact your savings?
  • Can your assets sustain your lifestyle if the market underperforms?

By running these scenarios, we identify risks and opportunities in your plan.

The Importance of Regular Reviews

Even the best retirement plans require regular updates. We recommend reviewing your plan annually. By monitoring your financial picture, you can adapt to changes in the economy, taxes, or your personal goals.

Addressing Common Retirement Concerns

As you plan your retirement at 62, here are answers to some common questions:

Is Social Security Enough to Retire at 62?

Social Security alone is rarely sufficient to cover retirement expenses. By understanding your benefits and supplementing them with other income sources, you can create a balanced plan.

What Happens If I Outlive My Savings?

Longevity risk is a top concern for retirees. Solutions like annuities, disciplined withdrawals, and proper investment strategies help your assets last throughout retirement.

How Do I Plan for Market Downturns?

Diversifying your portfolio and maintaining a cash reserve are key strategies to protect your retirement savings during volatile markets.

The Role of Professional Guidance

Retiring comfortably at 62 is achievable with the right planning and guidance. A financial advisor can help you:

  • Align your investments with your goals.
  • Minimize taxes through strategies like Roth conversions or tax-efficient withdrawals.
  • Create a sustainable withdrawal plan that protects your principal.

Final Thoughts on Retiring at 62 in 2026

Retiring at age 62 is a dream for many, but it requires intentional planning and preparation. By gathering accurate data, understanding your expenses, and building a personalized plan, you can achieve peace of mind and enjoy the retirement you’ve worked hard for.

Schedule your complimentary call with us to ask any questions you may have from this blog. If your questions don’t all fit in a 15-minute call, we will guide you to the next steps to get some answers.

Plan wisely, stay informed, and secure your future. Remember, the key to retiring at 62 in 2026 with peace of mind is creating a comprehensive plan and sticking to it.

March 20, 2023 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.

Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for March 20, 2023

This Week’s Podcast – I’m 66 – Can I Retire?

In this episode of the Secure Your Retirement podcast, Radon and Murs discuss the question of whether you can retire at age 66, using a specific example from an article in Market Watch. They provide insights and advice on retirement planning and financial management.

 

This Week’s Blog – I’m 66 – Can I Retire?

Are you 66 years old and wondering, “Can I retire?” You’re Not alone. We have a lot of clients come to us for retirement planning that ask this very question. People want to get out of the ratrace and enjoy life, and we actually read an article on Market Watch with a person asking this exact question.

I’m 66 – Can I Retire?

Are you 66 years old and wondering, “Can I retire?” You’re not alone. We have a lot of clients come to us for retirement planning that ask this very question. People want to get out of the rat race and enjoy life, and we actually read an article on Market Watch with a person asking this exact question.

Unfortunately, there is no standard answer to give you because the way you secure your retirement may be different than how someone else has planned for their retirement.

We do this every day. We know each element it takes to retire comfortably. Unless you’re working as a financial advisor, it’s not your job to know every little detail that shows you’re ready for retirement.

In our most recent podcast, we walk through the question of can I retire?

Let’s find out what we talked about.

Can I Retire?

What prompted this article is that a man who is 66 wrote into Market Watch, said he has $2 million in retirement and just wanted to retire and golf. We have folks with far less in retirement that have been able to retire and some with far more who have not.

Someone may read this and say:

  • You have $2 million. Of course, you can retire.
  • You have just $2 million? Of course, you can’t retire.

Let’s look at this man’s scenario. He is 66 years old and four months. He has $2 million in retirement, plans to have $3,300 in Social Security very shortly and works as a consultant three days a week and wants to leave his position.

He also has:

  • $1.6 million in retirement accounts
  • $600,000 in his wife’s retirement accounts
  • A daughter who still lives at home
  • A modest home that he owns
  • $9,000 – $10,000 in expenses
  • $6,000 in taxes and insurance
  • Home is paid off

As financial planners, we’re going to say to this individual, “Job well done.” This individual has done a great job paying off his home and saving over $2 million for his retirement.

Ultimately, dollars in and dollars out will dictate if this person is able to retire at 66 or not.

First, we’ll have a conversation with this individual to better understand their:

  • Travel goals
  • Legacy goals
  • Things they’re worried about
  • Health condition

We’ll want to create a retirement-focused financial plan that looks at multiple layers of a person’s scenario to understand if retiring now is possible with what they’ve saved and what they want in their retirement.

If you’ve read our blogs or listened to our podcast, you know that we mention the GPS retirement system a lot.

This system considers:

  • Where you’re going
  • Where you are right this moment

A fact-finding discussion that we have with our clients allows us to know a person’s starting point and where they want to be in the future.

What we’ll do is run a person’s financial plan at a rate of 4% to 5% because we know that if this plan does good, a higher rate of return will just make life easier. We don’t recommend running a plan at a higher rate of return than this because you’ll have to make riskier investments that can cause you to lose a major portion of your retirement.

The other thing we want to look at is why this person’s expenses are $9,000 – $10,000. We often find out that a person is spending $3,000 a month for traveling, so we then create a fun fund for 10 years.

Often, a person will travel for the first 10 years and then it tends to slow down, saving money in the process.

Taxes are also something to consider. If you’re paying a lot in taxes, it can reduce your ability to retire now or stay in retirement over the long term. Tax planning may be necessary for this individual because they may have deferred taxes, which means the $2.2 million in the bank is far less.

Next, we’ll go into scenarios.

What-if Scenarios

If we’re confident that the person can retire, now or in the future, then we can start looking into what-if scenarios. For example, if the person asking if they can retire has medical issues, they may be concerned about long-term care, which is very expensive. We can then consider:

  • Long-term care insurance
  • What would happen to the person’s retirement if long-term care were necessary?

What-if scenarios can be very positive, or they can be negative. Perhaps you want to buy a boat, RV or a second home. This will be considered in a what-if scenario.

We know that the individual in question has a lot of money in retirement accounts and a home paid off. Next, we would run a full retirement plan that shows us:

  • How much money the person has in their accounts every month based on the rate of return and expenses
  • How long the person can be retired
  • What life will be like from a financial standpoint if they reach age 90 or 100

If the person has more than enough money left at 90 in their retirement, we can then consider a long-term care scenario. Using the average cost for long-term care, stay length and so on, we can then find out the cost for the level of care, which is often $400,000 – $600,000.

Then, we will look at the remaining retirement balance when the person in long-term care passes, and we’ll see if they can live until 90 or 100 on the remaining retirement accounts.

We may find that self-insurance is possible, but if we find that you start running low on assets early, long-term care insurance may be a better option.

As you can see, there are many moving parts in retirement that you need to consider. We may be a bit biased, but everyone should sit down with a financial advisor to go through all these scenarios to better understand if you can retire and when.

We want to ensure that if you do retire, you can handle the what-ifs that come your way and have peace of mind heading into retirement.

If you have individualized questions that we haven’t covered just yet, feel free to contact us and we’ll be more than happy to answer them for you.

Click here to schedule a call with us.