20 Things to Do Before You Retire in the 2020s

20 Things to Do Before You Retire in the 2020s

Links Mentioned in this Episode

Complimentary Consultation Download: Retirement Plan Checklist
Download: Social Security Decisions Guide Video: Tax Reduction Strategies Ed Slott Podcast: How to Avoid the Biggest Tax Traps Video: Claiming Your Social Security Social Security Podcast: How to Maximize Your Social Security

Dean Barber: Thanks so much for joining us here on America’s Wealth Management show. I’m your host Dean Barber, along with Bud Kasper. Hi Bud, here we are.

New Digs

Bud Kasper: Yeah, in the new studio.

Dean Barber: Well, newly…

Bud Kasper: Redesigned?

Dean Barber: Redesigned, remodeled?

Bud Kasper: Refurbished.

Dean Barber: Yeah, it’s awesome.

Well, if you want to check us out in the studio, all you got to do is stop by our office here in Lenexa, Modern Wealth Management. And you can see where we produce the show and get a chance to visit with us. 

When Your Money Works for You

So, Bud, we’re going to talk about something pretty exciting today and one of the favorite aspects of my entire 34-year career so far. And that is retiring, getting to the point where your money is now working for you. You worked all your life for your money. Now it’s time for your money to go to work for you so that you can do the things that you want to do.

I say it’s the favorite part of my job because it thrills me to watch somebody, starting five to 10 years before retirement, getting that plan put together, buttoning down and saying, “All right, we’re going to think through everything and create a vision of the future; of what life’s going to be like after you retire.” 

Then, the day comes, and you have the retirement party, and then you get to start living that new life. And it’s phenomenal if you’ve done it right. If you’ve thought through all the things that we’re going to go through today.

20 Things to Do Before You Retire in the 2020s

We’ve got a countdown list for you of 20 things to do before you retire in the 2020s. And actually, that’ll be a kind of a repeat because we did this in January of 2020. To me, the things we’re going to talk about are so fundamental, but there is so much detail behind it as well.

Bud Kasper: You’re absolutely right. One of the things that people can imagine, especially since we’re on the radio instead of television, is everyone has a camera. When you get that picture into focus, so you’re five years away from retirement. You see the picture a little bit, but you haven’t honed in on it. And every year, as you get closer and closer, you want to get that fine, perfect picture that tells you, “All right, I’m here. I’m ready. I’m at the start of my new life as a retiree.”

#20 – Look Forward to the Longest Vacation

Dean Barber: So number 20 on the list is, look forward to the longest vacation you’ll ever take. When we think about it in terms of the longest vacation we’re ever going to take, Bud, what pops into your mind? 

Many people, I would say my wife would be included in this, would spend more time planning a vacation than they do planning the longest vacation that they’re ever going to take, which is their retirement. It’s just like, “I don’t know what to do. This is one of those things that is almost impossible to envision. It’s intangible. So what’s my life going to look like?”

Don’t Go Down Without a Fight!

You know, I see it sometimes as a boxer. You’re swinging as hard as you can, you know the round’s about to end, and that will be the start of your vacation, your retirement. 

All you’ve done all your life is save, save, save. “Where am I going to be able to save additional money, to be able to have the retirement I want?” Finally, someone rings the bell, and the fights over, and now you’re looking forward and saying, “Finally, I get a reprieve here.”

#19 – Develop a Vision of Your Perfect Retirement

Dean Barber: Exactly. So here’s what you start with. You start with developing a vision. And the way that I like to talk about this, Bud, is I want you to imagine your ideal retirement. Here are a few questions:

• What’s your vision of your perfect retirement? 
• What would you do? 
• Where would you go? 
• Who would you spend time with? 
• Are you going to make sure that you’re going to be able to take care of your grandkids’ college education? 
• Do you have friends that you want to travel with? 
• Do you want to have a second home someplace? 
• If you have that second home someplace, how many years are you going to have that?

This is the hardest part, Bud, I think. But it’s one of those parts of what we do in our prioritization process. So we have a great method, using our Guided Retirement System™, of taking you through a lot of questions and a lot of soul-searching. 

Sometimes it’ll take an hour and a half or two hours to get that vision of what that ideal retirement is. Then we go, “Okay, is this vision possible? Could it be a reality?” Or are there going to have to be some trade-offs? So some things you may not be able to do, other things you can.

Redefinition in Retirement

Bud Kasper: Yeah. What ends up happening is people redefine themselves. Because they define themselves in the past by work, right? And now we’re going to say, “I don’t have to work anymore. So what good can I do for my family, for my community, for my church?” It’s a fun time because now you’re making the decision.

Dean Barber: Right, and it’s a time for you to focus on yourself. Because if you think about it, Bud, when we’re working, when we’re doing the things we’re doing, we’re doing it for someone else most of the time. 

So now this is the time where you get to step back and reflect on what you want. And our Guided Retirement System™ does a great job of crystallizing that and delivering the three things that we want. Clarity, confidence, and control so that you can live your one-best financial life.

Bud Kasper: That’s right.

Get Prepared for Retirement

Dean Barber: Here’s what I want you to do. I want you to get to pick up a copy of the Retirement Plan Checklist. Then schedule a complimentary consultation right here. The complimentary part is genuinely complimentary. We can do the meeting via phone call, virtual meeting, or we can do it in person.

And we don’t have financial products to sell. We are fiduciaries, which means that we’re bound to put your interests ahead of our own, and we only get paid if you decide to hire us, and we don’t earn commissions for anything. 

So it’s a true way for you to be able to get to know us. We get to know you, take a test drive through that Guided Retirement System™, and see if this will help you. 

All right. We’re going to get our money to work for us. It won’t necessarily talk, but that’s the idea. We’re talking about 20 Things to Do Before You Retire in the 2020s.

#18 – Find a Partner You Can Trust

We covered number 20 and number 19 in our opening segment, Bud. Let’s do now number 18. Find a partner you can trust. 

Bud Kasper: That is so critical.

The Financial Services Industry Over the Years

Dean Barber: All right. So let’s talk a little bit just about our industry, the financial services industry. And Bud, when you started and when I started, you have 37, 38 years.

Bud Kasper: 38.

Dean Barber: 38 years. I’m 34 years. And it was all about selling financial products.

Bud Kasper: Products. That’s right.

Dean Barber: Right? It was about selling the hot stock. It was about selling the hot mutual fund, but it was all about selling products. Our industry and the insurance industry have done a fantastic job creating some of the best salespeople in the entire world. 

Dean and Bud Navigating the Financial Services Landscape

So you and I both recognized very early on in our careers that there was something wrong with that approach because basically, it was all about the salesperson. “How much money can I make? What can I get this person to do?”

Neither one of us liked that approach. What we said was, “Well, this should be all about the client.”

Bud Kasper: Exactly.

It Should Be About the Client

Dean Barber: I should get paid a fee by the client, never charge a commission, and have a relationship that I continue to get paid if I’m doing the right things. And if I’m adding value, I’m getting paid. If I don’t add value, then nobody should be paying me.

Bud Kasper: Yeah.

Dean Barber: So that is the fiduciary approach. And to me, that’s the key thing. Find someone who is a fiduciary and, specifically, an Accredited Investment Fiduciary® where they’re bound by law or a CERTIFIED FINANCIAL PLANNER™. We have a team of CFP® professionals here at Modern Wealth Management. Right?

Bud Kasper: Mm-hmm (affirmative).

Dean Barber: That CFP® Professional is also bound by the fiduciary duty. If you go that route, you’re going to, in most cases, find somebody who is not a product salesperson but is someone who is an actual planner and who can look at all aspects of your overall retirement plan.

Transitioning to the Fiduciary Standard

Bud Kasper: Oh, you’re so right. I remember so vividly in 1994; it’s when I took my personal practice at that time to being fee-based, no more commissions, and secondly, accepted a fiduciary standard. 

I can’t tell you how liberating it was. I will also tell you it was very costly because I couldn’t make as much money as doing all commission types of business.

Dean Barber: Right.

Bud Kasper: But it was the right thing to do. It put me on the same side of the table as my client and looking for solutions that would generate the best thing for them, not necessarily for me. 

The Industry is Still Behind 

Through that process, we’ve seen the industry much more attuned to that type of focus, although there are still tons of people out there that are still doing it for me, me, me, and not necessarily for the good of the client.

Dean Barber: Right. I would still say that that’s the majority.

Bud Kasper: Yeah. Probably, just based on numbers.

Dean Barber: Right. For sure. Well, I followed you about two years after that, in ’96, and then you and I joined forces and merged our two firms, back in the early 2000s.

Bud Kasper: Yep. The best thing we ever did.

Dean Barber: It’s been amazing. 

#17 – Start Planning Your Taxes for Retirement Now

Here’s another critical thing, number 17 on this checklist of 20 things to do before you retire in the 2020s. You need to start planning your taxes for retirement now. You need to do this before you retire, but you and I recognized that taxes were an integral part of the financial planning process.

Bud Kasper: Exactly.

Dean Barber: Yet in almost every firm out there, there’s a massive disconnect because people have their CPA separate from their certified financial planner. They have their estate planning attorney separate from their CFP® Professional. They have their insurance agent separate. 

You Need a Team

What we did was say? We said, “You know what, that doesn’t work.” When you’re a CFP® Professional, yes, you have to understand all these things, but it doesn’t make you a CPA, and it doesn’t make you an estate planning attorney, and it doesn’t make you a risk management expert. Right?

Bud Kasper: Right.

Dean Barber: So we decided we’re going to hire all those people, and we’re going to bring them in-house. So that when we’re working on somebody’s retirement plan, we do what we said, let’s paint that ideal vision of your perfect retirement. 

Then we get to go to work doing the plan. Once the initial plan is ready, we understand what you have, and we know what you want to have happen to your life. And we get that all laid out. 

The Tax Plan

Then we bring in our CPA. Okay? CPA then reviews. Okay, how do we minimize taxes for the rest of your life? Not in a given year, but how do we reduce taxes for the rest of your life?

That takes forward-looking tax planning. It requires reviews of that tax situation on an annual basis. That’s part of one of the reviews that we do is to make sure that we’re looking forward five, 10, 15 years on how do we reduce taxes? 

Tax Planning Education

There are many things that people miss, and they overpay their taxes because they’re missing opportunities. We have a great video called Tax Reduction Strategies. It’s on-demand.

Also, I did an interview on the SECURE Act with Ed Slott, America’s IRA expert. It’s Episode 31 on the Guided Retirement Show. So you can find the Guided Retirement Show on your favorite podcast app or YouTube. So those two things are excellent at actually helping you understand what that tax planning means.

Comprehensive Financial Planning Includes Tax Planning

Bud Kasper: Right. And what you just described there was why we use the word comprehensive financial planning, which means we’re taking into account all the ingredients, all the things that we need to understand as we approach retirement and go into retirement. 

The tax element of that is so significant because, as you said, most people are just filing their taxes. They’re not doing tax planning. By the way, the earlier we get started on this, the more money you’re going to save, put in your pocket, and have more money to work with your family.

Get Ahead of Your Taxes

Dean Barber: Yeah. It’s one of those places where you can make an incredible difference if you start five to 10 years before retirement. Even if you’re already retired, though, you can still impact your retirement with forward-looking tax planning. But starting before retirement does help.

Bud Kasper: Exactly right.

Paying Uncle Sam Less

Dean Barber: So here’s the next thing. Why are taxes important? Let’s back up just a second. Because you can only spend the net amount, right? You can only spend what you have left after you pay Uncle Sam. So if we can figure out how to pay Uncle Sam less, legally, that’s more money for you to spend.

Bud Kasper: Why would you not?

Dean Barber: Right.

Bud Kasper: It’s just so obvious.

Dean Barber: But it takes time to put the plan together, Bud, and I think that’s one of the reasons why people don’t, is just because they believe they are too busy. But again, we talked about how people spend more time planning an annual vacation than they do planning the longest vacation that they’re going to have in their entire life.

Bud Kasper: Well, too many people, and I’m quoting you now, take taxes as a matter of fact. Well, facts can change, and how you take them and make those facts work to your advantage can put dollars in your pocket.

#16 – Properly Claim Your Social Security

Dean Barber: All right. Number 16 on our list of 20 Things to Do Before You Retire in the 2020s is to properly claim your Social Security. Bud, I can’t tell you, we’ve got so many great things out there. 

Social Security Decisions Guide is a white paper we put together with a checklist and other resources. We also have a video on Claiming Your Social Security and Episode 34 of the Guided Retirement Show on how to maximize your Social Security benefits. So, we have a lot of information and details on Social Security. 

Bud Kasper: So many people say, “Well, whatever the age I am when I retire, that’s when I’m going to claim my Social Security.” Oh, no! You lost sight of perhaps a bigger prize. However, you have to understand how to get there.

Social Security and Tax Planning

Dean Barber: So those two things that we just talked about, taxes and Social Security, we have seen in so many cases where if you do those two things correctly, it can add $200,000 to $300,000 of additional spendable income over your retirement lifetime.

Bud Kasper: Yes, sir.

Dean Barber: That’s a huge amount of money.

Bud Kasper: You bet.

Dean Barber: Take a look at our Social Security Decisions Guide, the Tax Reduction Strategies webinar, Claiming Your Social Security video, on and on. While you’re browsing, schedule a complimentary consultation.

You can schedule your meeting right there. We can discuss with you by phone, virtual meeting, or we’re happy to meet in-person in either our Lenexa office, Lee’s Summit, or North Kansas City office.

Dean Barber: Bud, the next one we’re going to talk about is knowing where your retirement income will come from. We call this the bucket strategy, right? And this is all about asset allocation, asset location.

#15 – Know Where Your Retirement Income Is Going to Come From & #14 – Plan Your Withdrawals

Know where your retirement income is going to come from is number 15 on our list. Number 14 on our list is to plan your withdrawals.

So you think that it’s simple, right? You think, “Well, I’ve got $1 million, or $2 million, and I’m just going to follow the 4% rule. I’ll just take 4% of the value of my portfolio, and I’ll spend it.” 

Okay, that’s the wrong answer, right? 

Bud Kasper: Correct.

It Ties Back to Social Security 

Dean Barber: Believe it or not, how we figure out your right withdrawal strategy is a combination of a deep dive in Social Security. So, looking at your Social Security maximization strategies. And remember, you’ve heard us say this before, but I’ll repeat it.

The difference between the very best claiming strategy on Social Security and the worst claiming strategy is often $100,000 or more of additional income coming out of the same system over the same life expectancy.

Bud Kasper: On average, that’s true.

It Ties Back to Taxes Too 

Dean Barber: Once you’ve done that, now you bring in the CPA with a tax team to look at the tax ramifications of the withdrawal sourcing. So which accounts at which time, in what combination will allow me to get the maximum amount deposited to my checking account, whatever I want to spend every month, with the least amount of taxes possible. That’s the only way, Bud, that you can create a proper withdrawal strategy.

If you do those two things, you could reduce your tax liability through retirement by $200,000 to $300,000, and you could increase your Social Security take by another $80,000, $100,000, $120,000. 

You’re talking about significant differences, and what does that do? It takes the pressure off of what the underlying investments have to do for you to get the income you want, or it allows you to spend more money.

Sourcing Your Income

Bud Kasper: That’s right, and what you’re saying is taking this from a net perspective. A lot of people don’t understand. Taking money from the wrong source could very easily make you pay more taxes. 

So Social Security is an excellent example of that. People think that Social Security is a check that just comes out. Sorry, there are taxes that you may have to pay predicated on the other sources, such as your 401(k). Now your IRA distributions coming out of that are what? 100% taxable. “Oh, you have a Roth. Great! That’s nice to have.” 

All of these factors need to be in perspective. So we understand from a net perspective, why in the world would you not want to eliminate Uncle Sam legally when you have the opportunity to.

Required Minimum Distributions 

Dean Barber: Exactly right. Think about this. Required Minimum Distributions changed. Now, you don’t have to take a required minimum distribution until age 72. Even if you retire at 60, 62, 65, or whatever your date is, you need to plan for the future of those RMDs will be and how it will impact your taxes after. 

Bud Kasper: Yeah, planning.

Dean Barber: Right. 

It’s Complicated

Bud Kasper: It’s funny. It seems so simple. And yet, it’s complicated.

Dean Barber: Oh, it’s super complicated. And the thing is that there are no two people that are in the same situation.

Bud Kasper: Sure. You have a spouse that still has income. So, that comes into play. And you had an inheritance and a beneficiary IRA. You have to take distributions over ten years. When should you optimize that? Should you take it all at once? Should you take it in five years? Or should you spread it over ten years? I mean, the options are limitless.

Roth Conversions

Dean Barber: Right. Well, when you start thinking about those required minimum distributions, what you want to think about is, “After I retire, can I get money from my traditional IRA or traditional 401(k) over to a Roth IRA, Roth 401(k)? Can I do it at a lower tax rate where the money in the Roth grows tax-free forever and passes tax-free to the beneficiaries? Can I do that at a lower rate than what my tax burden will be once my required minimum distribution starts?”

If the answer to that is yes, through proper planning, Roth conversions are a very powerful method to reduce the long-term tax burden throughout retirement.

Understand Your Investments 

Bud Kasper: I have never done more Roth conversions in my entire career than we did last year. And really, it comes from the meetings, the face-to-face with clients, and understanding not just what investments are doing.  

Dean Barber: Well, it’s simple for you, Bud, because you’ve been doing it for 37, 38 years.

Bud Kasper: Yeah, but it’s the impact that the rest of this has. And once you understand this, then you’re going to say, “My gosh, I never really quite understood exactly how I was going to source my income. But now that I do and then I can do things from a planning perspective today that will impact my income next year, which means it’ll impact your next year and next year, next year.” 

This is money you’re putting back in your pocket that you arbitrarily would have been giving to Uncle Sam because you didn’t understand how to source your income properly.

It’s a Case By Case Situation 

Dean Barber: That’s right. We could do an entire show on how to source that income properly. But really, it comes down to being a personal deal because each couple or each individual, they’re different and the strategies for each is different, and the strategies change, Bud, based on tax law changes. 

So we’ve seen a plethora of tax law changes in the last 24 months. And with that has come adjustments to our distribution strategy, our arbitral strategies.

Tax Laws Change, CPAs Should Adapt

Bud Kasper: Yeah. We joke with the CPAs in our firm about the fact that they’ve got job security because Congress is always changing something from a taxing element. And of course, that is our job as planners to stay on top of that. So we see that not necessarily as a problem. We see it as an opportunity.

Dean Barber: Absolutely. Let’s talk a little bit, Bud, about number 13 on this list of the 20 Things to Do Before You Retire in the 2020s.

#13 – Understand Your Portfolio

So let’s talk about understanding your portfolio. You said, Bud, that’s easy, right? 

Bud Kasper: I did say that, didn’t I? 

Dean Barber: You did say that’s easy, and you and I both know that it is not easy. You and I both also know that the financial services industry places almost 100% of the emphasis on the portfolio and the investment. And we know that we can’t control what the markets do. We can’t control what interest rates do, and we can’t control Fed policy. You can get whipsawed around.

If you build the right portfolio, you can isolate yourself from some of that stuff. When you’re building your portfolio, the idea is to try to build a portfolio that will allow you to live that ideal retirement we talked about in the first segment and do it with the least amount of risk possible. 

Bud Kasper: There you go.

Investment Education

Dean Barber: We did a great couple of podcasts on that subject. They are episodes 12 and 13 of The Guided Retirement Show™. So I encourage you to get out to The Guided Retirement Show™ and check that out. It’s on your favorite podcast app and YouTube.

In those episodes, we dig into a lot of detail on understanding your portfolio. We talk a lot about the difference between mutual funds and ETFs and the pros and cons of both, but it helps you understand building a portfolio. 

The more educated you are, the better you’re going to be able to make financial decisions. That’s what we’re all about here on America’s Wealth Management Show. 

[Music Playing – Livin’ on a Prayer by Bon Jovi] 

Bud Kasper: Yeah. Do you know who’s singing that?

Dean Barber: Bon Jovi. 

Bud Kasper: Yeah. And you know what he is? 

Dean Barber: What?

Bud Kasper: 59 as of yesterday.  

Don’t Go Into Retirement Livin’ on a Prayer

Dean Barber: Well, Livin’ On A Prayer, that’s not what you want to do when you head into retirement. And we’re talking about the 20 things to do before you retire in the 2020s. But I’ve had this person in my office before, and I know you have, too.

Bud Kasper: Bon Jovi?

Dean Barber: No. The person who has underestimated what it’s going to take for them to have the lifestyle they want in retirement and isn’t willing to accept the truth. The last thing that you and I want to do or any of the certified financial planners in our organization, the last thing we want to do is tell somebody that it’s going to be okay and that you’ve got enough when you don’t.

Bud Kasper: Right.

Dean Barber: Right? And just one thing popped into my head as that song was playing. 

It’s Important to Set Expectations

I had a couple, and we went through things, and we were discovering what they had and what they wanted and everything else. 

I’m like, “I’ve been doing this a long time.” At that time, I think I’ve been doing this for 30 years. And I said, “I don’t have to put your data into our Guided Retirement System™ to tell you that you’re not there. You have a lot of work to do if you want the lifestyle you’ve laid out to me. It’s not going to happen with what you have. Now, if you’re willing to say you could live on a little bit less than what you talked about, we can talk about that.”

Bud Kasper: “We can make it work.”

Dean Barber: And they’re like, “No, that’s our lifestyle. That’s what we’re going to do.” And I’m like, “It’s not going to work for you.” 

Interestingly, Bud, I got a phone call from that individual, that couple, about two weeks later. They said, “Dean, we just want to call you and tell you. You were wrong because we found a financial advisor that told us we had plenty of money.” That’s what I call Livin’ On A Prayer because I have seen it happen.

Stay Realistic

Bud Kasper: Yeah. Well, too often, people want to hear what they want to hear instead of the facts. But you’re right, and as fiduciaries, we have an obligation to make sure people understand the facts associated with what they’re trying to accomplish. 

Whether or not they have the wherewithal, whether or not they’ve done the right things to get to that point where they can make that decision with confidence that they can retire. And that’s why people come to us.

Dean Barber: Right. And the problem was they came here, and they were planning on retiring in six months. They made the decision, “We’re retiring, and there’s so much we’re going to be able to spend.” 

I’m like, “No, you have another five years at least.” That’s why we encourage you, if you’re within 5 to 10 years of retirement, this is the time to plan. And you may have thought, “Well, someday, I’m going to talk to somebody. Someday, I’m going to get my act together. Someday.” Well, today is someday, right?

See the Whole Picture

Bud Kasper: Yeah. 

Dean Barber:  So schedule a complimentary consultation. If you’re ten years out or five years out, or even if you’re already retired, we can sit down and look at your overall picture and make sure that everything is buttoned up and we’re following these 20 things that you need to do to retire in the 2020s. 

Just click here to schedule a complimentary consultation. We can do it through a phone call, a virtual meeting, or in-person. 

Bud Kasper: You know what came to my mind when you said that? One of the firm’s partners, Bruce Godke, had made the statement about looking at retirement as a puzzle and asking the question, “What’s the most important part of the puzzle?” And the answer is- 

Dean Barber: It’s the box. It’s the picture.

Bud Kasper: It’s the box. It’s the picture.

Dean Barber: Right.

We Can’t Plan Without Vision 

Bud Kasper: That’s your frame of reference. So I think that’s an accurate way of addressing what retirement planning is, is we’ve got to put the picture together. We have to know how they fit in the proper places to accomplish what our clients would like us to do.

Dean Barber: Well, that’s why one of the first things you do to retire is you want to envision and get that vision clear to your financial planner. What does your ideal retirement look like? Then they can go to work and start to craft and make sure that you’re going to be able to do it.

There are Very Few Ideal Plans 

Bud Kasper: Yeah. Obviously, there’s a lot of data that needs to be collected to do a proper financial plan. And I bet I can count on at least one hand, maybe two, probably not, the number of times that people have come in to visit with me, who said, “I’ve got a financial plan.” “Do you have it with you?” “Yes, I have it with you.” 

And I go in there and look at it. All of a sudden, the wrong assumptions were in the plan, Dean. One of the biggest ones is inflation. So I always go to whatever the factor is. “What did you say inflation was going to be?” “1%.” “Are you serious?”

Dean Barber: Or two, yeah.

Bud Kasper: “Are you serious?” And therefore, I know that it’s a bogus plan.

#12 – Make Sure Your Properly Covered & #11 – Understand Medicare & Plan for Rising Health Care Costs

Dean Barber: Well, one of the biggest ones, which is number 12 and 11 on our 20 things to do before you retire in the 2020s, is ensuring you’re properly covered in inflation and health care costs. 

These two things go hand in hand because when we’re building a plan, we know that healthcare costs have been increasing at a far faster rate than what normal inflation is. So we want to apply a separate inflation rate to healthcare and understand what that does inside the overall plan. That’s a big deal.

Bud Kasper: Yeah. Which we’re using right now, 6.8%. That’s a heck of a lot more than the inflation rate for other items you have in your life.

Long-Term Care Considerations

I think considering a spouse having a long-term care stay is critical in this whole risk management process. If one spouse goes in and the other spouse still has their normal living expense outside of it, and you haven’t done planning for that, it can devastate the person still living or lives beyond the person that goes into the nursing home.

Bud Kasper: And the other part is debt. If you have debt and you’re taking it into retirement, and God forbid your spouse passes away, and now that debt is being handled by one person, the survivor in my example here, that can upset the plan. So we need to understand what we would do if that were to occur. 

Newly Single Tax Payer and Tax Brackets

Dean Barber: Right. And also, remember that if one spouse passes away, now all of a sudden, you’re a single taxpayer, so you hit those higher tax brackets at half the income, right?

Bud Kasper: Exactly.

Dean Barber: So you’re not going to live on half the income you were living on just because your spouse has passed away. But guess what’s going to go up? Your tax bill because it will be taxed at a higher rate at lower income levels. 

Social Security and Spousal Benefits

It would help if you considered that. You have to make sure also that you consider the fact that one of the Social Security checks is going to go away. 

Suppose one spouse has a pension and you haven’t done pension maximization strategies to maximize what that pension is that goes beyond the individual who has the pension’s lifetime. 

In that case, there could be a reduction in income there. So all these things when we say make sure you’re adequately covered, we stress-test the plan for all the potential risks that are out there.

Do You Have Your Bases Covered?

Bud Kasper: So as you’re listening to what Dean was talking about and all of these different factors associated with it, that should frighten you a little bit. 

It should make you concerned about whether or not you’ve covered all the bases necessary to assure yourself and assure your spouse that you’re prepared for retirement. Ensure that you have done the appropriate things at the appropriate time to exercise the best possible retirement we could create for you.

Keep Reading to Find the Remaining List Items

Dean Barber: So the 20 things to do before you retire in the 2020s. We got through ten of those here on the show. Keep reading the article below, and you’ll find the remaining items on the list.  

Bud Kasper: That’s pretty good for us.

Learn More About Retirement Planning

Dean Barber: Well, but the thing is, if you’ve been listening to the entire show, you have to start to understand how complicated this is. And when we established our firms and joined them together, Bud, we said, “We’re going to focus on making sure that we’re going to help people get to and through retirement,” right? 

That’s our focus. That’s what we do. And we’ve become just marinating in that type of situation. We’ve got all the subject matter experts, the CPAs, estate planning attorneys, the risk management experts, CFP® team members, all working collaboratively to help people live their one best financial life. Get that clarity, confidence, and control.

Bud Kasper: Absolutely. And it’s all available here on our website. There’s so much education there, Dean.

Dean Barber:  Check out the education while you’re here. Click complimentary consultation. You can schedule a quick phone call, a virtual meeting, or an in-person meeting. We appreciate you joining us here on America’s Wealth Management Show. I’m Dean Barber, along with Bud Kasper. We’ll be back with you next week. Same time, same place. Everybody stay healthy and stay safe.