Reviewing Your Retirement Checklist

By Chris Duderstadt

December 13, 2023

Reviewing Your Retirement Checklist

Key Points – Reviewing Your Retirement Checklist 

  • Are You Properly Incorporating Inflation into Your Financial Plan?
  • Couples Retirement Planning
  • Planning for Unexpected Expenses
  • Stress Testing Your Financial Plan
  • 7 Minutes to Read | 16 Minutes to Watch

Reviewing Your Retirement Plan Checklist

Another year is almost in the books. The beginning of a new year is a great time to review our Retirement Plan Checklist. That’s exactly what Dean Barber and Bud Kasper, CFP®, AIF® will be doing on today’s show.

Schedule a Meeting Get the Retirement Plan Checklist

Make sure to follow along as Dean and Bud  review a few of those 30 questions on the Retirement Plan Checklist. This white paper is comprised of 30 yes-or-no questions that gauge your retirement readiness. It also includes age-based and date-based timelines that are filled with critical things to consider leading up to and during retirement. If you haven’t already downloaded a copy of the Retirement Plan Checklist, get your copy below.

Retirement Checklist

Retirement Plan Checklist

The Origin of Our Retirement Plan Checklist

Our whole idea behind the Retirement Plan Checklist came about when we discovered that people have way more questions than they do answers. But even with more questions than answers, we realized that people were still ill-equipped to ask the right questions. So many people don’t even realize that the distributions coming out of their 401(k)s are going to be taxable once they’ve been rolled over.

“It’s not that people aren’t smart. There are a lot of very smart people. But if you’re not familiar with the material that we work with every day, you need to avail yourself of that additional knowledge so you can make a good decision for yourself and your family.” – Bud Kasper, CFP®, AIF®

Dean and Bud have been through the Retirement Plan Checklist countless clients over the years. Now that Dean is 58, he’s starting to review the Retirement Plan Checklist from a different viewpoint, as he thinks about what he’s going to do when he retires.

“Now, it is more of a psychological or emotional type of a thing. Do I ever see myself ever not doing anything? That’s very difficult for me right now. That’s why I want people to start looking at the Retirement Plan Checklist so they can understand what needs to happen.” – Dean Barber

There are some people that loathe their job so much that they can’t wait to retire. Some people are OK with leaving their job if it means they need to work part-time still. Either way, they need to know how much they need to have the life that they want to live. Even if you’re psychologically not ready to retire, it’s critical to start understanding all the nuances when it comes to retirement planning 10 to 15 years before retirement.

A Few of the Checklist Items

No. 1: I have taken into consideration inflation and have been conservative in my planning, using a 3% to 4% per year inflation rate.

Let’s just right into reviewing a few of the items on the 30-question checklist portion of the Retirement Plan Checklist. We’ll start with No. 1. Why did we put that in there? When people would meet with us for the first time and had already built a financial plan, so many of them were only applying a 1% or 2% inflation factor to their plan. There’s a major impact between using a 1% or 2% inflation factor versus 3% or 4% on the long-term viability of the plan.

From 2007-2008 through 2020, the average inflation rate was 1.5%, 2%. People were thinking that was the new normal with inflation. We knew that wasn’t the case, and the past few years has proved that.

“We look at a longer-term historical average for inflation. That’s pushing 4% per year even though it’s not a straight line.” – Dean Barber

Your plan needs to be built to handle that 4% per year inflation. If it’s not, instead of your lifestyle staying the same because your income is rising, suddenly your income stays flat and your lifestyle begins to reduce. Nobody wants to go into retirement thinking about reducing their lifestyle every year because things are going to get more expensive.

Certain Expenses Inflate at Different Rates

We also know about that when it comes to inflation that you need to inflate different expenses at different rates. That’s an important part of the planning process.

“What you don’t want to do is under inflate. If you’re doing that, you’re lying to yourself.” – Bud Kasper, CFP®, AIF®

On the other hand, if you over inflate, that means that you might have more money left over at the end or that you could spend more than what you need to.

No. 4: I have taken into consideration what is important to my family and me, and my retirement plan is built around those goals.

The next question we want to review in our Retirement Plan Checklist is No. 4. A lot of times, couples will go into retirement and the spouses will have different ideas. There’s typically friction that is created because one spouse who is usually scared to spend and the other who is ready to spend in retirement on the things they’ve always wanted to do. The spouse that is scared to spend will probably be quick to say that they can’t afford to do all that.

“If you don’t build it into the plan to prove that it can be done, that conflict won’t go away.” – Dean Barber

Last week, Bud received a phone call from the wife of one of his client couples. She said her husband was spending too much money. Bud asked if she’d talked to him about it, but she was hesitant to do so because he’s pretty sensitive about it.

Couples Retirement Planning

This couple is just starting their retirement years. So, Bud told her to have them schedule a meeting with him so they could talk through it together. In this case, the husband wanted a new laptop. At that point, the husband wasn’t overspending. But could there have been an issue if his desire to spend had compounded and they waited to have that conversation? It’s possible. That’s why it’s critical to regularly review your goals-based plan with a CFP® Professional.

“It’s the early phase of retirement. Understand what you have and what the projections are. We have covered those—through Social Security taxation and all the other things that we needed to go about.” – Bud Kasper, CFP®, AIF®

It’s so important for both spouses to have an equal voice in terms of how their money is invested, how to protect their assets, who their beneficiaries will be, etc.

No. 5: I have thought about additional budget items during my retirement, such as new cars, housing expenses, dental, medical, grandchildren’s college, etc.

That leads us right into reviewing No. 5 on the Retirement Plan Checklist. It’s crucial to think about those types of things. When you’re working, you have a paycheck coming in. Chances are that you’re saving part of that paycheck. You know you have cash reserves that are building. You have automatic savings into your 401(k) and your health care and taxes have already been taken care of.

As those additional expenses come up, someone might take those out of their savings. But if you don’t budget for those throughout retirement and anticipate those expenses are going to come up, those could derail your retirement. They could change the way that you want to do the things that you really want to do. Budgeting for unexpected expenses leads us right into the importance of stress testing your financial plan.

No. 10: My retirement plan has been stress-tested to take into consideration the possibility of poor market conditions at any point in my retirement.

When you review the Retirement Plan Checklist, you’ll notice that stress testing is mentioned several times. Think about these various scenarios—the Dot-Com Bubble, the COVID-19 pandemic, and the Great Recession. No one could have predicted the exact economic fallout of each of those events. But if you don’t plan for the possibility of having long-term market downturns during your retirement, your retirement could suddenly be flipped upside down. That’s where stress testing comes in. While we can’t predict when those type of economic cycles happen, we can prepare for them by seeing if your plan could survive those previous events.

“Returns don’t happen in a straight line. We talk all the time about sequence of returns. The sequence of returns can be all mixed up. You could have great returns early in retirement, bad returns mid retirement, or have bad returns at the very beginning of retirement.” – Dean Barber

When we build someone’s plan, we’ll stress test it to see what happens if there is a bear market in the first three years of retirement. Will it survive based on their current asset allocation? If the answer is no, we need to examine what type of portfolio would survive in a bear market condition in those early years of retirement.

Bucketing Strategies

Then, you start thinking about bucketing your money. You have a short-term bucket which you’re going to spend from. Then, you have an intermediate-term bucket, which is going to be looking for a little bit more growth. And then you have your longer-term bucket, which is invested for growth. That you know that the money that you’re spending is going to be safe and you don’t have to worry about selling something at a loss or a discount to fund your retirement.

No. 17: My retirement plan considers taxes in such a way that I will know which account to spend from first to keep taxes as low as possible.

Next, we want to review No. 17 on our Retirement Plan Checklist. That’s one of the most critical items on our checklist. If you can’t answer yes to that, what are you missing? Reducing long-term tax liability can make a tremendous impact on your retirement.

You have more control over your taxes during retirement than any other time during your lifetime.” – Dean Barber

No. 26: I have a proactive retirement planning advisor and CPA who work together to help lower my current taxes and in years looking forward.

This ties right in with Question No. 26. Is your CPA working with your CFP® Professional? It’s very rare for that to be the case, but it’s critical that they’re working together. That’s why we have CPAs working in-house. And we don’t do that strictly for tax preparation purposes. Tax preparation is reporting history. We’re talking about proactive, forward-looking tax strategies that can lower taxes over your lifetime.

“You need the CPA for the return. But you need them even more for the planning because that’s going to impact your return.” – Bud Kasper, CFP®, AIF®

There’s Much More to Review in Our Retirement Plan Checklist

There’s so much more to review in our Retirement Plan Checklist, so make sure that you download a copy. If you are within earshot of retirement, take some time to review it and start planning.

If you have questions about any of the 30 questions or the retirement considerations mentioned in the age-and date-based timelines, let us know. You can schedule a conversation with one of our team members below.

Schedule a Meeting

As Dean and Bud mentioned, make sure you’re reviewing the Retirement Plan Checklist with your spouse as well. It’s crucial to be on the same page with your spouse throughout the retirement planning process.

Reviewing Your Retirement Checklist | Watch Guide

00:00 – Introduction
01:45 – Diving into the Retirement Plan Checklist
04:35 – Checklist Item #1 – Address Inflation!
07:31 – Checklist Item #4 – Family & Goals
10:02 – Checklist Item #5 – New Cars, New Roof, Extra Expenses
11:09 – Checklist Item #10 – Stress Test Your Financial Plan
– Checklist Item #17 – Taxes and Spending in Retirement
14:08 – Checklist Item #26 – Are your CPA and CFP® Professional Working Together?
15:10 – There Is More to Learn


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The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Adviser. 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.