Financial Planning for Retirement and Beyond

When my dad told me he was considering a reverse mortgage because his investment income was dropping, with all the confidence in the world, I said "Yes, read the fine print, find the best.".

I had done a financial plan on my dad in the late '80 when I worked for IDS-American Express as a Financial Planner. He was one of my first plans. He is a GENIUS. I always learned so much about the world of finances from him.

Creating a financial plan after retirement to protect principle, create a steady stream of income and take into consideration inflation and taxes is paramount in the retiree's life.

Depending on the sophistication of the investments and income needs, retirement financial planning can easily be done with a computer or a pencil and paper. There are great links on the IRS website for doing a plan no matter where you find yourself on the family life cycle.

 Do you only have 10 years before your retire?  Well, it is really time to take a good look at all your investments, taxes and spending patterns.  This is a complicated situation and may require a lot of time, whether you do your own planning or hire someone to advise you.

Take a look first at your income stream.  Do this for at least 3 months, and count everything...

Earned Income, Investment Income.... everything.  Tally each week or month.  If you get a steady pay check it should not be too hard.  But if you work on commission, tips, have investment income that pays monthly, quarterly, semi-annually, or annually you must break it down.

Next comes Expenses, again for 3 months and I mean everything you spend your money on.  This is real complicated for some.  This information is averaged and helps with doing future projections on income needs, saving on taxes and finding money to save even more money towards retirement.

This is easy usually. Most investment companies are required by law to give you statements at least annually. Save every piece of paper you get from your investment companies. File and then when it is time to retrieve information... it is all there. If your investment companies have websites, as most do these days, you have instant information to do this part of your Financial Plan.

How much do you have in Retirement Investments? Which ones are in pre-tax dollars, and which one has already been taxed at your income level throughout your savings life span.

Pre-tax dollars means that you have not paid income tax on the dollars you invested (principle) or on any interest or dividends. All will be taxable when you begin to take money from them when you retire. Many people opt to take only the interest or dividend when they first retire to protect the principle.

This is why it is imperative to take a look at your Financial Plan 10-15 years before you retire... to set yourself up for income flow, tax considerations and protecting the principle. You may live to be 80 or even 100. Who knows? You should consider that the cost of living will rise at least and average of 3-6% after you retire... do the math... it is staggering to thing what the cost of things and taxes will be in 20-40 years from now!

If your investments are not tax deferred, you still need to consider their growth, income potential and tax ramifications especially for equities like real estate, mutual funds, or real estate.

It boggles the mind how much money we spend when we have kids. Whew. And to think of the future and retirement is almost a reason to have a drink... but...

DO A FINANCIAL PLAN INSTEAD.

I think a profession CFP is needed for this stage in the Family Life Cycle of Finances. It is very complicated and there are lots of excellent people out there with a variety of pricing levels.

Just do it... and you will be happy for every penny you have spent. It will take a lot of time, patients, organizing and truthfulness with your Financial Planner... don't hold back... find someone you can trust... and go through the process and don't give up no matter how inconvenient it is... Plan the finances, the work the plan... for decades and you will...

have money for education or to start a small business for your children

you will save money on taxes

you will have a retirement ready for you when you are so ready to retire...

Good luck... let me know...