5 Things to Do Before and After Retiring

By Dean Barber

April 8, 2021

5 Things to Do Before and After Retiring

Key Points – 5 Things to Do Before and After Retiring:

  • 5 things to do before retiring
  • 5 things to do after retiring
  • Planning Social Security 
  • Planning a tax strategy
  • Building your portfolio
  • 25 minute read | 39 minutes to listen

If you were to list the five most important things to do before and after retirement, what would they be? Join Dean Barber and Bud Kasper as they discuss the five things do to before and after retiring.

Complimentary Consultation

Download Retirement Plan Checklist

Download Social Security Decisions Guide

Podcast: The Guided Retirement Show

5 Things to Do Before and After Retiring

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. All right, Bud, we’re going to talk about the five things to do before and after retirement. Now obviously, there’s a lot more than the five.

Bud Kasper: I was going to say, there’s only five?

Dean Barber: There’s a lot more than five, but we’re going to talk about what you and I think are some of the most important things in our top five to do before and after retirement.

Bud Kasper: Good. Let’s go to it.

Dean Barber: All right, we’re going to do the items for before retirement for the first part of the show here, and then we’ll get to the stuff to do after retirement in the second half of the show.

5 Things to Do Before You Retire

1. Build a Budget

Bud Kasper: Great.

Dean Barber: So let’s start, and one of the things that a lot of people as they get into their peak earning years and all the kids leave the nest and all of the sudden you’ve got more financial freedom than you’ve ever had before, a lot of people lose the B-word, the budget, right?

Bud Kasper: Right.

Dean Barber: Because they don’t have to pay attention to it. It’s not how it was when they were younger, when we had to make sure that we didn’t overspend, et cetera, right? 

I’m going to tell you before you head into retirement, I want you to create a budget, and I want you to be very specific with that budget because here’s what happens. 

Suddenly, that predictable monthly income you had coming in while you were working, it’s not there anymore. You don’t know what it’s going to be, you don’t know how much it’s going to be, but I want you to create that budget for your ideal retirement. 

Dream Big

So dream big and say, “This is what I would want to do.” And then drill down on what it’s going to cost. Where are you going to travel? Where are your grandkids going to be? Are you going to visit them? 

How many times per year are you going to do a big family vacation where you can get the whole family together at a specific location? You need to be specific. How often are you going to replace a vehicle? 

Bud Kasper: Vacations.

Dean Barber: Vacations. Yeah, all that stuff.

Bud Kasper: Education.

Dean Barber: Yeah, education for the grandkids. So you got to create that budget. To me, that’s number one. And I don’t think you can even build a good financial plan, Bud, without a budget.

Budgets are Necessary

Bud Kasper: The funny thing is people balk at it; whenever I lay that information, this is what I need you to complete so we can do a proper comprehensive plan. 

“I have never been on a budget.” This is when we have to analyze that because we don’t have the income coming in from work, it’s predetermined as to what we need to have.

Dean Barber: Right, and we don’t do the budget to say, “This is all you can spend, right?”

Bud Kasper: The variance.

Dean Barber: We do the budget to get you to think forward about what you want your life to be like in retirement, okay? And that’s why I say dream big, make it your ideal retirement. 

You Need to Understand What’s Coming in and Out

And the reason why we do it is because so many times, Bud, we see people that have been retired for a few years, they come in and talk to us, and they’re either on one side of the fence or another.

They’re either under spending because they don’t know, they don’t have clarity of what they actually can spend, or they’re overspending, and once again, it’s because they don’t have clarity.

Bud Kasper: That’s so true. In the same case with that, if you don’t know what you’re going to spend, you don’t know what you’re going to have to save. We’re talking about before you’re retired in the first part of the program today, so when you asked me to come up with my thoughts on this, the first thing I wrote down was, “Save, save, save.”

Dean Barber: Of course.

Bud Kasper: Yeah, we need to maximize our tax-deferred accounts, et cetera, et cetera, to be able to understand that, and then we’re going to simply ask the question, do I have enough? Well, you know what? You’re not going to know the honest answer unless you do a comprehensive financial plan.

2. Create a Comprehensive Plan

Dean Barber: That’s exactly right. That’s number two on our list of five things to do before retirement to prepare a comprehensive financial plan. 

When I say comprehensive, I don’t mean getting out an Excel spreadsheet and forecasting what your income will be off your assets.

That’s not a comprehensive financial plan. 

Deep Dive Into the Details

I’m talking about taking a deep dive into taxes, a deep dive into Social Security, a deep dive into risk management, and a deep dive into estate planning.

Bud Kasper: Medicare.

Dean Barber: Medicare. What will inflation do to you in retirement? And on the inflation part, we’ve talked about this before; different things inflate at different rates.

Bud Kasper: Right.

Dean Barber: Right?

Bud Kasper: Yeah. Healthcare is an example.

Plan How You Use Your Assets

Dean Barber: Exactly right. In that comprehensive plan, you also need to determine if your expenses will be finite, right? Or are will they be infinite? Could I retire with a small mortgage balance remaining? Well, if I do, yes, but I know there’s an ending date to that, so that goes back to the budget in the comprehensive financial plan.

Debt in Retirement

Bud Kasper: That was my number two, which was getting out of debt if you can get out of debt. Yeah, you’re right. Many people carry some debt into retirement; that’s not unusual, but you want to know where the end is.

Dean Barber: Right.

Bud Kasper: Such as a house payment, a car payment, et cetera, et cetera. As you stated earlier, though, cars are going to be needed, so you might say, “Well, I buy a car every four years, every six years.” Well, let’s put it in the plan.

Dean Barber: Absolutely.

Bud Kasper: Let’s understand the impact it’ll have on your total spending package.

How Often Do You Plan to…

Dean Barber: Absolutely, and you need to be monitoring those expenses before retirement. How often are you going to have to replace appliances, air conditioners, furnaces, those types of things? 

Are you going to need roof repair? Are you going to need new paint on the outside of your house? What are all the things that could potentially come up, right? That’s why you have to be detailed with that financial plan.

Bud Kasper: Yeah, and even though that sounds like a lot of information that you’re talking about there, Dean, it’s necessary. You only have to do it once; then, we’ll monitor it from that point forward and make sure we’re on track.

Try Out the Checklist

Dean Barber: Yeah, it is. It is totally necessary. So we’re talking about the five things to do before retirement. We’ve covered two of them so far. I want you to pick up a copy of our Retirement Plan Checklist, and there’s a lot more than five on the checklist, okay?

Bud Kasper: There are.

Dean Barber: Then I want you to schedule a complimentary consultation with a CERTIFIED FINANCIAL PLANNER™; we can do a virtual meeting or meet you in our offices. Start making some actual progress towards your retirement goals.

Bud Kasper: Yeah, that’s excellent.

Claiming Your Social Security

Dean Barber: We talked about budgeting and creating that comprehensive financial plan, but we glossed over one piece of that, and I want to go back to it, and that is your Social Security and how you claim your Social Security, making a plan for that before you retire.

Bud Kasper: Absolutely, Dean. People have spent their entire life putting money into this. Now you’ve got to think about how you’re going to get it out, and a lot of people think, well, just when I hit the age, I’m going to start taking that money out. Of course, we can calculate the financial plan to see how that impacts, but there are choices.

And the choices allow you to be able to postpone taking retirement. You’d say, why in the world would I do that? And the answer is because you’re growing at 6% and up to full retirement age. 

If you see in the plan that it would help you continue to defer taking Social Security, you get 8% up to the total maximum timeframe on Social Security, which would be 70.

Dean Barber: That’s right, and the average couple that’s 62 years old today will have somewhere North of 600 different iterations on how they can claim their Social Security. 

So one of the things that we do as we’re building the plan is run all of those iterations. We say, well, okay, what’s it looks like claiming it at the earliest age possible, what’s it look like claiming it at the latest age possible and what are all the iterations in between. Right?

Bud Kasper: Right.

Dean Barber: And so we’d look at those, and we say, okay, let’s start plugging those different things into the plan itself to tell us which one of those claiming strategies give your plan the highest probability of success. Get a copy of our Social Security Decisions Guide.

3. Stress Test Your Retirement Plan

Dean Barber: So let’s go to number three. You and I both know that the day that we create that comprehensive financial plan, the very next day, something has changed.

Bud Kasper: No doubt.

Dean Barber: Right? Values of accounts have changed; maybe something happened in the political landscape, economic landscape.

Bud Kasper: Tax landscape.

Dean Barber: Tax landscape. Yep, absolutely. So what you want to do on number three, and this is a big one, is to stress test your plan. Remember, we built that ideal retirement with the budget and the comprehensive plan. Now we want to stress test it.

What is Stress Testing?

So stress testing, Bud, I think when we came up with this terminology, we just copied off the government. Remember back during the financial crisis, when they started stress testing the financial institutions?

Bud Kasper: Sure. The banks especially.

Dean Barber: When we plan that retirement and create that plan initially, I call it the Goldilocks retirement. Everything’s going to be just right. We’re going to live to our ideal age. 

We’re going to be healthy the whole time; the stock market’s going to be great. We’re going to have good interest rates; taxes aren’t going to go up. In fact, they might come down, and then you’ve got to think back, okay, is that reality?

The reality is no; it’s not. Anything could go wrong at any point in your retirement. So now you begin the stress test. 

How Do You Stress Test?

You want to stress test to see what happens if Social Security is reduced like many people are talking about by 2034. What happens if…

  • we have an increase in tax rates? 
  • interest rates spike?
  • we have another recession?
  • there is a stock market crash?
  • you have a premature death of a spouse?
  • somebody has to go into a nursing home?
  • you have a boomerang child coming back home?
  • you have grandkids that wind up needing financial support?

I mean, the list goes on and on and on.

Bud Kasper: Take into account spousal benefits, how they impact, and when you should take those.

Losing a Spouse

Dean Barber: One of the things that I don’t think most people think about is when one spouse passes away. When you stress test one spouse passing away, most people don’t get that surviving spouse will be in a higher tax bracket with the same income as a married couple.

Bud Kasper: Right. I think it is just sinful that the government does it that way, but that’s it. So we got to play by the rules. We have to understand it, and then we’ll have to plan around it.

Dean Barber: Yeah. So stress testing that plan. Bud, you and I have over 70 years of combined experience getting people to and through retirement, and I don’t think there’s a scenario that we haven’t come across. So again, we spread that throughout the organization.

We all learn from each other daily. So when we start talking about stress testing your plan, you may be as the individual you’re hiring us to do this, you may be saying, well, I don’t even know what to consider.

Well, we do. We know everything to consider. A lot of what to think is actually in our Retirement Plan Checklist. 

What About High Inflation?

Oh, another thing I didn’t talk about, what about high inflation? I mean, everybody’s talking about that today. All these trillions of dollars in stimulus and debt that we’re going into as a nation will cause inflation? If it does, how does higher inflation impact my ability to stay retired and do it comfortably?

Bud Kasper: I can tell you from, again, our experience, when I have ever run across a financial plan, and I’ll bet you Dean, and I mean this with all sincerity, I bet less than 5% of the people I’ve ever had the opportunity to sit down across the table from have even understood what financial planning was as opposed to exactly how it’s going to impact their lives.

Why Do You Stress Test?

Dean Barber: No, it’s complex, obviously, and there’s a lot of work that goes into it, but doing it right in the first place is the only way that the stress tests are going to come back right. Why do you stress test? 

Because you want to say, okay, if something happens, what is my plan to address that? And how do I mitigate all of those risks as efficiently as possible? And this is before retirement, don’t wait until you’re there. Right? This is your plan before retirement.

Bud Kasper: Yeah. Some assumptions have to be driven into that equation, if you will. If you saw an assumption similar to inflation, and let’s say 1% is what they worked into a plan from some other organization. 

That’s ridiculous. I mean, you don’t have a plan there. You’ve got somebody who doesn’t understand planning for one thing. And it’s not just isolated to that because you have to inflate stuff at different rates.

Health Care Inflation

Bud Kasper: As an example, when we look at healthcare right now, we’re looking at what? 6.88% is the number we’re using on that. That’s a far cry from 3.6% on normal inflation, which is greater than what inflation is currently.

Dean Barber: Right. And you can always tell when a plan’s been shortcutted when somebody says, well, okay, here’s your dollar amount that you’re going to spend. And they’re just going to assume that everything will inflate at the same rate, but it’s not. You got to have healthcare.

At the very least, healthcare needs to be carved out of there, but you could even be more specific and say, well, how quickly are things like energy costs and those things riding? 

How quickly are my property taxes increasing? Those are all things that are a reality throughout retirement, and we can do some analysis on that to make sure that we’re applying the proper inflation rate to each of your budget items.

Bud Kasper: Yeah. That’s that a five-letter word, taxes. And how are we going to deal with those? We must get our arms around because there are many things we could do in retirement on taxing that will have a lifetime benefit to you and your spouse, and we need to identify those.

4. Build a Long-Term Tax Plan

Dean Barber: Right. Well, that goes to number four on five things to do before retirement. Number four is to do a long-term tax analysis to see how you get your money into your checking account with the least amount of taxes possible each year, right? 

So you’re making 15 to 20-year projections before you ever get to retirement, but that’s what our guided retirement system is designed to do.

When we put that financial plan together, step two for us is to sit down with our in-house CPAs and say, “All right, look at this from a tax perspective for us so that we know what our game plan is going to be on how we’re going to get money out of which accounts and how we’re going to be able to control our taxes in retirement.”

Bud Kasper: Right. It’s so important and so often, especially for people who do it yourself, to understand the implication that taxes have on your plan’s different aspects.

Check Out Our Podcast

Dean Barber: By the way, I want to tell you that we have another podcast out there called The Guided Retirement Show™. And we’re able to do it without commercial interruptions, and we have more long-form discussions where we get into a significant amount of detail on some of these topics. You can find it on your favorite podcast app.

Look, we have topics from properly claiming Social Security to getting the most out of your investments and building the right portfolio in retirement, and reducing your taxes in retirement. 

The difference between Roth and traditional, we talk about Roth conversions on and on the list goes. I think we’re up to 44 podcasts out there, and a lot of great information on that. Find The Guided Retirement Show™ on your favorite podcast app.

Bud Kasper: We’ve prided ourselves on this show to concentrate on education, helping people understand the implications of different aspects of retirement planning. 

In the course of that, these podcasts have become essential, I’ll say. I’ll repeat that, essential for people to view and understand. 

Find Additional Education

It’s a great way of introducing yourself to the process that we call the Guided Retirement System™.

Dean Barber: So pick up a copy of the Social Security Decisions Guide along with the Retirement Plan Checklist

And schedule a complimentary consultation with a CERTIFIED FINANCIAL PLANNER™. We can visit with you by phone, virtual meeting, or we’re happy to meet in the office.

Dean Barber: All right. Now, guess what we haven’t talked about yet?

Bud Kasper: What?

Dean Barber: Building your portfolio. That’s step five on the five things to do before retirement.

5. Building Your Portfolio

You might be thinking, “Well, Dean, why in the world would I do all of these other things before I build my portfolio?” There’s a very good reason for it because the options for how you construct a portfolio are endless. There are so many different things that you can do. The question is: What does your money need to do?

Bud Kasper: Right. To make your plans and succeed.

Dean Barber: I bet there’s not a day that goes by Bud that somebody doesn’t come up to me and say, “Well, Dean, what do you think about this stock? Or what do you think about this fund? Or what do you think about this investment? You think that’s a good investment?” 

I’m like, “Well, you know what? That’s not the right question.” Because if you came to me and you had a hammer in your hand, and you said, “Is this a good tool?” I would say, “Well, what are you going to do with it?”

Bud Kasper: Only if you have a nail.

Why Do I Need to Budget After I Retire?

Dean Barber: Right. We go through budgeting, creating the comprehensive plan, stress testing the plan, doing the long-term tax analysis because, by the time we’ve got all of that done, we’ve answered the riddle that everybody needs to answer. That riddle is: What does your money need to do for your retirement to be successful? 

Once we know that and we won’t know it until we’ve gone through these other four steps, then and only then can we construct a portfolio.

Bud Kasper: The interesting thing about that Dean in the detail of the plan is that you don’t need to have a specific return steady all the way through. 

We’re not going to get that. So you will see that through the exercise of Social Security, taxation and Medicare, and the other factors that will impact what your needs are every year. 

In some years, it might be you only need one and a half percent return. In another year in my hypothetical here, it might be that you need a 3% return or whatever the case may be. 

Therefore, having a portfolio designed to mitigate downturn but still succeeds in getting what the need is in every specific year is what it’s about.

Our Investment Philosophy

Dean Barber: Yeah. Our view and our investment philosophy is pretty simple. The investment philosophy goes like this. We know that risk is ever-present. Once we know what your money needs to do, our job is to construct that portfolio and do what needs doing with the very least amount of risk possible. That’s our investment philosophy. And so we follow that.

A Client Example

Bud Kasper: Yes, I’m going to add that. Recently, with one of my clients, we harvested some losses, and now the audience is going. You mean you had losses? Well, on certain aspects of the portfolio. 

The overall return was positive, but we could do something from a tax position, Dean, to go in there and sell these specific stocks in the portfolio. It determined the loss associated with it. For what purpose? 

For purposes in the future, when we have some gains, it didn’t mean that the whole portfolio was down, but aspects of it weren’t positive. Therefore what? Let’s get as much positivity out of that as possible by exercising that tax strategy.

Dean Barber: Yeah, so that’s your tax-loss harvesting right there. And, of course, there’s not anything that goes straight up all of the time.

It’s not a DIY Job

All right, so I would say that this is not a do-it-yourself job, and it is very complex, and if you start with the portfolio construction, your emotions of fear and greed will drive your investment decisions. Go through steps one through four first, and then build your portfolio. 

Income in a Low Interest Rate Environment

To learn more, there are a couple of things I want to point your attention to. We did a show just a few weeks ago here on America’s Wealth Management Show called Income in a Low-Interest Rate Environment. As I said at the beginning of the segment here, you can find America’s Wealth Management Show on your favorite podcast app.

Dean Barber: And I think this one was probably three weeks ago that we did that show on Income in a Low-Interest Rate Environment. If you missed it, listen to it because we dive deeper into some of those things. 

The other thing I want you to do is I want you to take a test drive on our Guided Retirement System™. And to do that, schedule a complimentary consultation with a CERTIFIED FINANCIAL PLANNER™. 

We’ll walk you through exactly how that’s going to work and what it all entails. Pick the time that you want to visit with us and choose whether you want to visit by phone or by virtual meeting or if you want to meet in person. We get started on all of these items and more that are also in our Retirement Plan Checklist.

Comprehensive Financial Planning

Bud Kasper: Right. You look at these comprehensive financial plans and begin to understand the necessary information that needs to be put into the plan to know how it will fit in your specific situation. 

If we look at investments per se, and we take the existing portfolio of the person we have the interview with at that time. And we look at where the return is, and we ask the question: Is this the type of portfolio that will succeed moving forward when I retire?

Dean Barber: Well, that’s part of the stress testing that we talked about because we’re in a stress test and say, “What happens in a down market to this type of portfolio?”

Bud Kasper: Right. And many times when we then look at that portfolio, we say in the stress test is you say, “What happens if we go through the great recession again? How would this portfolio hold up? Oh, it’d lose what? 28%? Oh, I can’t let that happen.” 

Well, if that’s the case, why are you positioned that way? Let’s understand what the pluses and minuses are with an allocated portfolio. Even more critically in retirement, because you’re not putting more money in so, therefore, I’m speaking of an IRA or a 401(k), of course. Therefore we need to understand exactly the downside risk associated with it.

5 Things to Do After Retiring

Dean Barber: Absolutely. All right. Let’s get to the five things now that we want you to do after retirement. The first thing is you got to start with the F-word.

Bud Kasper: I’m not going to say it.

Dean Barber: Fun.

Bud Kasper: Finance.

Dean Barber: It’s fun. It’s time to have fun, Bud. You’ve worked your whole life to get to a point where your money will go to work for you. Obviously, this is a time to celebrate. This is a time to have fun. 

1. Review Your Budget, Again

However, when we do retire, what we’re going to start with is something boring again. You have to review that budget. I want you to review the budget right after you retire, make sure that everything is there, that you want to be there. 

At the end of the first year, I want you to go back and want you to review what you spent and how it compared to what you budgeted for?

Then review that in your overall plan so that you can say, “Okay, did this work? Is this where I wanted it to be?” That’s a key element in that budget. And it will be really for the rest of your life if you want to get the most out of your retirement.

Bud Kasper: The interesting thing is the individuality associated with this because in so many cases, people say, “Well, I’m going to replace the car every four years.” Well, let’s take a look at that. Let’s look at the impact. That’s part of what this is all about.

Dean Barber: The reason why I say, “I want you to review your budget, and I want you to be very specific.” Is that I don’t want you to get into retirement and sacrifice your lifestyle because you’re underspending because you don’t understand what it is that you could be doing.

Bud Kasper: Good point.

Don’t Underspend

Dean Barber: That’s the reason why I’m saying review your budget. I just had a conversation with one of my clients here, just this last week, Bud. 

And he told his wife, he said, “Look what Dean’s telling us. It’s time for us to start spending some of this money. We’ve been scrimping and saving too long.” Again, you get that fear aspect of it out there of spending too much, but they’re way underspending.

2. Claim Your Social Security and Medicare

After reviewing your budget, the second thing to do after retirement is to claim your Social Security. Now, I’m not saying that you claim Social Security on the date that you retire. But Social Security claiming is going to be one of those things that you’re going to do. 

Remember before retirement, we said, you’re going to prepare a comprehensive plan. And we said part of that comprehensive plan is creating your Social Security strategy. And that Social Security strategy is going to tell you when should your spouse claim Social Security and when should you claim Social Security and why? 

Now it’s time to do that, and some of those Social Security claiming strategies can’t be done online. Many of it can, but some of them you’re going to need to go in and sit down with somebody at the Social Security Administration. 

Often, if you’re using some of the Social Security claiming strategies that we recommend to get the most out of Social Security, sometimes the person you’re talking to at the Social Security administration might go, “What?”

Bud Kasper: Yes. You’ve got an excellent story about that, Dean. Please share it with our audience.

Sometimes Even the Social Security Administration is Confused

Dean Barber: What happened was this guy had retired, and he started claiming his Social Security at 62, and he went back to work because he was bored. 

So he started making more money than he was allowed to receive his Social Security benefits still. So basically, his Social Security benefits shut off. But they’re still on, so the day he turned 66, he’s going to start getting the check again.

So what happened was, I said, “Okay, you’re still working. We don’t want these Social Security benefits to kick back on right now because 85% of those will be taxable if you do. That will throw you up into the next tax bracket and start causing more capital gains and dividends to be taxed at a higher rate. The list goes on and on. It’s also going to cause Medicare premiums to be higher,” et cetera, et cetera. 

And he’s like, “Okay, what do I do?” 

I said, “You go down to the Social Security office, and you withdraw your application.” 

He goes down, and he tells the person, he goes, “Well, I want to,” he didn’t use the term “withdraw.” 

He said, “I want to suspend my benefits. I don’t want them to start at age 66.” 

They said, “Well, you can’t do that. You already signed up at 62, so as soon as you turn 66, they’re going to come back on.”

Bud Kasper: He called you back, didn’t he?

Dean Barber: He called me back, and he said, “Dean, they say I can’t do it.” I’m like, “Are you still there?” And he’s like, “Yeah, I’m in the parking lot.” I said, “Go back in.” 

So he went back in, we got finally up to a third level supervisor, and finally, they were like, “Oh, you want to withdraw the application? Yes, you can do that. You can do that.” 

Once again, the people at the Social Security offices, well they do an excellent job at what they know. The Social Security system is still uber complex, so understand what will happen and how to claim your Social Security.

Don’t Forget About Medicare

You’re also going to want to sign up for Medicare. When you sign up for Medicare, you’re going to want to understand the different Medicare options and what kind of supplements you’re going to need on top of that. 

We have three different shows on The Guided Retirement Show™, where we talk with Medicare expert Tom Allen and help you understand the ins and outs of Medicare. Look for The Guided Retirement Show™ on your favorite podcast app and check out all the Medicare episodes.

Bud Kasper: When it comes to Medicare planning, it becomes probably one of the most critical parts of the comprehensive financial plan. People retiring before the age of 65 and having put money aside to pay for independent insurance before Medicare kicks in is a real game-changer from that perspective.

3. Start Doing Roth Conversions

Dean Barber: Yep. No question about it. All right, so the third thing to do after retirement starts your Roth conversions.

Bud Kasper: You bet. If you can do that, right?

Dean Barber: Yep. And so you might say, “Wait a minute, Roth conversions after retirement?” Absolutely. That is one of the best times to do Roth conversions is after retirement. Why? Because you get to control where the money’s coming from that you plan to spend. 

So if you’ve built your tax diversification right before retirement and you have enough money in a taxable account, you can live off of that with very little taxes due. 

Then you can continue to defer your Social Security for a little while and then start converting your IRA over to a Roth IRA and maximizing the different brackets, whatever makes sense within your plan. 

But Roth conversions during retirement are one of the most significant tax benefits that you are going to get, not just for you but also for those you care about when you pass on to leave the money.

Bud Kasper: Yeah. When I look at it over the last three years specifically, we have done more Roth conversions than ever, but you made a point here that needs to be understood. 

When you do a Roth conversion, and you’re going to convert, let’s say $50,000 out of your traditional IRA over into a Roth IRA, you need to pay the tax in the conversion year. It helps if you have another account that you’ve already paid taxes on to pay the tax on the conversion. I hope people understand it that way.

Dean Barber: Right. That’s your tax diversification.

Bud Kasper: But once you’ve converted, no more tax on that money.

Dean Barber: Right, ever.

Bud Kasper: Never. We always like to say, especially in the 401(k) field, what’s your choice? Do you want to pay the tax on the seed when you’re putting it in? Or you want to pay it on the harvest several years later when it’s compounded and grown?

Dean Barber: I’d rather pay the taxes on the seed.

Bud Kasper: Me too.

4. Keep 18 to 24 Months of Required Spending in a Safe Place

Dean Barber: Yes. All right, so item number four after retirement, I want you to keep 18 to 24 months of your mandatory spending from your portfolio in a very safe position. And I mean that always, not just initially when you retire. I want you always to keep that. 

Why? Because we know that there will be times when longer-term investments will be down in value. You don’t want to have to sell them to generate your income. You always want to ensure that you’re keeping adequate money for your income in a very safe position. 

You’re going to spend down that principal, and when you make some money on the other side, on the longer-term buckets, then you’re going to refill that short-term bucket again.

Bud Kasper: Yeah. Whether you have a short term patch of time where you’re not making money in your portfolio, and you’re all worried about what that’s going to mean in the long run, it shouldn’t mean anything because if you’ve got enough money put aside for your income needs and as Dean said, where are you? 

One year, 18 months, 24 months, whatever the case may be, quit worrying about it. We’ve taken care of the income side. All we need is time on the side of the markets.

5. Review & Monitor Your Plan at Least Twice a Year

Dean Barber: All right, so that leads to item number five of what to do after retirement. This one’s pretty simple, but it takes time. You need to monitor and review your entire financial plan, including your Social Security plan, your Medicare, your insurance, your estate plan, your tax plan, and your investment. The whole thing needs to be monitored and updated at least twice per year.

Bud Kasper: And that’s what we do. We meet at least two times a year to make sure we’re updating the plan, and we’re on top of the situation.

Dean Barber: Obviously, you can do it more if your situation is more complex, but at least twice per year, you should be reviewing all of this.

Bud Kasper: I agree.

Learn More About Retirement Planning

Dean Barber: All right. But you can’t review it if you don’t have a plan. The first thing I want you to do is I want you to click here to schedule a complimentary consultation. And pick up a copy of the Social Security Decisions Guide as well as the Retirement Plan Checklist. 

Dean Barber: Well, we hope you’ve gotten a lot out of our show today on the five things to do before and after retiring. Like Bud said earlier, our goal here is to educate. We are fiduciaries and don’t have financial products to sell. We’re here to work with you if you decide you want to work with us. Schedule that complimentary consultation. 

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.


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The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.