Estate Planning

What Is the Guided Retirement System?

By Dean Barber

January 13, 2022

What Is the Guided Retirement System?

Key Points – What Is the Guided Retirement System?

  • How the Guided Retirement Works
  • The Guided Retirement System Is Like a GPS
  • Discovering What’s Really Important to You
  • How the Financial Plan Is Built
  • Your Plan Is Like a Blueprint of Your Dream Home
  • 18 minutes to read | 38 minutes to listen

You’ve probably heard Dean Barber and Bud Kasper mention the Guided Retirement System several times on America’s Wealth Management. Here is their step-by-step breakdown of the Guided Retirement System to ensure people understand what it is all about.

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How the Guided Retirement Works

Dean Barber: Thanks so much to those who join us on America’s Wealth Management Show. I’m your host, Dean Barber, along with Bud Kasper. Today we’re going to explain in detail what our Guided Retirement System is all about. I reference the Guided Retirement System a lot on America’s Wealth Management Show, but I think it would benefit everyone to fully understand what the Guided Retirement System is designed to do.

The Guided Retirement System Is Like a GPS

From a high level, the Guided Retirement System is designed to act like the GPS on your car or smartphone. For example, when my wife and I got in the car in Kansas City and headed south to Florida, we knew that we were going to make a couple of stops along the way. We were going to take our time getting there, and our first stop was Memphis, Tennessee.

When we get in the car, I set up my iPhone and plug in the address of the hotel in Memphis. The GPS tells us that we wiil get there at a certain time and the fastest route to take.

However, I already know that the GPS is wrong when I pull out of my driveway. The reason that it’s wrong is because it has no idea how fast I will drive, what kind of traffic I will hit, and how many times my wife is going to have to stop and use the restroom. I always blame that on her.

The GPS doesn’t know if we could have a flat tire, engine trouble, or anything like that. Nevertheless, it tells me what time should I arrive if I just went straight through based on the set of circumstances at that time.

That’s similar to our Guided Retirement System. We want to do first for our Guided Retirement System or any financial plan to work is know where we’re going. What is our objective? At what point do we want to get to financial independence and that type of thing? Then, we need to get very, very specific on the goals. Why is that so critical?

The Steps of the Guided Retirement System

Bud Kasper: Without a doubt. If you go into retirement or are preparing for a retirement and without some sort of structure that is identifies all the elements that are important to retirement success, then you’re flying blind. This goes back to the GPS comparison.

Step One: The Discovery Meeting

There are certain things that we need to be sure are correct for the client. In the Guided Retired System, we’ve created a system that addresses those. The discovery meeting is step one. That’s when we sit down and talk about what the client is about, what they’re trying to accomplish, what they have, and things like that.

Step Two: The Delivery Meeting

Then we go to the next step, which is the delivery meeting. We take all the information they provide us and delivering possible solutions. I say possible because we don’t know until we have the discussion with the client to understand whether we’re tracking with them in the exact position that would put them into retirement success.

Step Three: Implementation Meeting

Step three is implementation. After we’ve created the plan and gone through it with a fine-tooth comb by answering every question that could ever come up, our third step is to put the plan into action. That’s what we call the implementation meeting. This is also a confirmation meaning because it confirms what we came out of in step two and how the action plan will serve that exact purpose.

Review Meetings

Dean Barber: As critical as all that upfront work is, it’s not over after the implementation meeting. The implementation meeting is when the GPS gets turned on because we’ve identified where we’re going and we’ve agreed upon a cost to get there. When we implement that course, that’s when the Guided Retirement System gets turned on.

What we need to do then is monitor your progress toward those objectives and adjust them as needed. On a twice-a-year basis, we take a very, very deep dive into the financial plan and into the underlying assets. We make sure that everything stays on to track.

In one of those meetings, we develop a forward-looking tax plan. In another one of those meetings, we’ll look at all your risk management programs. On odd years, we’ll look at your estate plan. Every aspect of your financial plan is tied to the Guided Retirement System.

Financial Education Is Everything within the Guided Retirement System

To learn more about the Guided Retirement System, you can have a 20-minute ask-anything session with one of our CERTIFIED FINANCIAL PLANNER™ professionals. The Guided Retirement System was developed with the purpose providing people financial education and leading them to financial independence. You can read more about the Guided Retirement System and the path the financial independence in our latest article, 7 Ways to Build the Best Retirement Plan.

Now that we’ve given a broad outline of the steps within the Guided Retirement System, I want to go over each step in a little more detail. Let’s start with the discovery meeting.

Discovering What’s Really Important to You

The discovery meeting is where you establish foundation of your personal Guided Retirement System. When you’re going through that discovery meeting with one of CERTIFIED FINANCIAL PLANNER™ professionals, they are going to take a deep dive into what’s important to you. It’s not just a question of how much money you have and how much you want to spend.

That is what you typically find when you meet with people that call themselves financial advisors who attempt to put together very rough financial plans. To develop a plan through our Guided Retirement System, we need to dig deep. The discovery meeting usually takes an hour to an hour-and-a-half, but can even run up to two hours depending on the complexity of your financial situation.

We need to know everything that people want to do and we’ve put a dollar figure to each thing. Remember, when you reach that financial independence or retirement, whatever you want to call it, the paychecks are stopping.

It’s time for you to now ask your money to go to work for you and accomplish those things that you want to do. If you don’t know everything that a person is trying to accomplish and everything that they have, there’s no way you can activate that Guided Retirement System and have it done properly.

The Five Points of Data

Bud Kasper: That’s right. This is the fun part. I say that only because you bear your retirement soul and grade yourself as to how prepared you are. When we gather for the discovery meeting, we highlight five points of data: spending, savings, timing, legacy, and risk.

All of those need to be incorporated into the plan. This is when we’re asking some of the following questions.

  • Where have you saved money?
  • What other money sources are there, such as a pension or Social Security, that we can access in your retirement years?

And then there are questions that you should be asking, such as:

  • When should I take Social Security?
  • How do I maximize the Social Security results?
  • Will I have taxation with Social Security?

That’s just one little element. There are more facts and figures that need to be generated just around that one element of the plan. When we gather all the data, which takes a little bit of work to do, this is the point where you’re bearing your soul in terms of how prepared you are. Based upon the information that we’ve gathered, we create a retirement plan that will serve both the client and their spouse for the rest of their retirement lives.

The Spending Plan within Your Retirement Plan

Dean Barber: Then you go to the legacy part of that, but let’s back up to the spending. When we’re putting that Guided Retirement System together, the first thing we need to do is to step into the future and create your spending plan for when you’re no longer working. We must ask two very important questions.

  • How much money do you want to be able to spend during those years?
  • What do you want to spend it on?

The reason why it’s important to know how much you want to spend and what you want to spend it on is because the different things that you spend money on will inflate at a different rate.

How Inflation Impacts Your Spending Plan

Let’s say somebody has 10 years left on a 30-year mortgage when they retire. They included that in the monthly budget that they gave some other advisor and they just kept that spending budget going straight through retirement and put inflation on it. That’s wrong.

What you need to do is segment out those different things you’re spending on and how inflation relates to them. That mortgage, for example, is going to have a finite ending period. The mortgage payment is not going to go up with inflation. You need to know that and factor it into the plan correctly.

Your healthcare expenses are going to be another factor. Your Medicare expenses, those Medicare premiums, and all those related things are going to inflate at a different rate than the other things that you’re spending money on. We need to apply a different inflation rate to that than your vacations and those types of things.

Inflation Increase Hits 7%, Highest Since 1982

Bud Kasper: Let me add to that. This week, we received updated data that the inflation rate rose 7% last year. This is the highest rate since 1982. We don’t want to get a false read in the preparation for a retirement. We need to consider what inflation is today, but then we need to project around that because we know it’s not going to stay consistently in that level.

Hopefully we’ll start to see that decline in the next six months. Nevertheless, these are the contingencies that need to be addressed and discussed with our clients in preparation for retirement.

Inflation Is Addressed in Review Meetings

Dean Barber: We’ll skip around since Bud brought that up, but inflation is some that we regularly address during the review cycle. When people come in for reviews the first half of this year, we review that spending plan again and talk about how inflation has impacts your ability to do the things that you want to do.

We’ll ask you if we need to increase the cash flow to your checking account each month because of inflation. We do that every time we get together for a review with our clients. That’s part of the activation of the Guided Retirement System. It’s the same thing with a GPS because it’s constantly asking, “Where are we?” before relocating and redirecting you. It then gives you a new time for when you’re going to be there.

Our Guided Retirement System, while it’s not as automatic as a GPS, requires interaction with you and one of our CERTIFIED FINANCIAL PLANNER™ professionals. it accomplishes the same thing. Let’s say you are planning to retire five years from now. Last year, you thought your spending plan needed to be $10,000 a month. It might need to be $10,700 a month now to buy the same thing that $10,000 a month would’ve bought the year before. It all goes back. to that spending plan. What are you spending on and how have those different items and parts of your spending plan inflated?

Things Inflate at Different Rates

Bud Kasper: Exactly. Various aspects of our lives inflate at different rates. Some of those higher inflation rates may not impact our clients. For example, if the healthcare goes up, but you’re 62, retired, and don’t require any health money from your plan, then you’re not impacted by it.

However, there are necessities such as food and gasoline that are also impacted by inflation that impact you daily. We must consider that. The 7% current inflation rate doesn’t overly disturb me because it’s not the longer-term rate, but it is something we need to pay attention to. The pockets of inflation that impact the plan are where we need to concentrate and come up with a resolution.

Getting Organized Financially Is Critical

Dean Barber: I hope that you use this information to organize yourself and ready for that time of your life where you are financially independent. That’s when your money is working for you. It means that you’ve taken all things into consideration and if you choose to work, it’s only because you love it and not about the money. I want you to be that person, that couple.

There are some other great resources to help you out with that as well. That includes our latest article, 7 Ways to Build the Best Retirement Plan, Retiring with $1 Million video, and Retirement Plan Checklist. All those resources are designed to help you get started or make sure that you’re on the right track to get to your overall financial goals.

Along with utilizing those resources, you can set up a 20-minute, ask-anything session with one of our CERTIFIED FINANCIAL PLANNER™ professionals. You can get all your questions answered, and we’re not selling you anything.

Bud Kasper: I like to think that is our new year’s gift to people. You can sit down and talk with the CFP® professional about your personal situation and get answers. It’s a wonderful thing for us to share and it’s highly beneficial to people that are curious about their future.

Financial Independence Doesn’t Always Mean Retirement

Dean Barber: We’ve talked about financial independence several times on America’s Wealth Management Show. I want to reiterate that the objective of financial independence is for you to do the things you want to do each day because they are important to you and not for money.

If you’re enjoying your job but you have enough money to not work, you’re still financially independent. You’re just choosing to do what you want to do. There’s no secret that if Bud or I decide to retire tomorrow that we could because we’re financially independent. We don’t plan to retire anytime soon, but we know we could.

We don’t require our work to allow us to live our financial lives, and that’s really a great place to be. I have clients that knew that they were financially independent five to seven years—maybe even sometimes 10 years—before they retired because they truly enjoyed their jobs.

Financial independence doesn’t always mean retirement. It’s not synonymous with retirement. Being financially independent means that you can do whatever you want to do. It’s no longer about the money. Our Guided Retirement System is designed to get you to that point.

The Discovery Meeting Allows Us to Get to Know You on a Personal Level

Now that we’ve explained what the discovery meeting is the moment when our team begins to work for you, I want to talk about what we do behind the scenes after gathering someone’s information to start putting the plan together.

Bud Kasper: This is the critical aspect of planning. We’re gathering the information we need from our prospective clients to determine where they have money, real estate, etc. This is the fun part because this is when we get together with you to learn about you.

To be personal with this, we’ll have three people getting together with you to look at all the places you have saved money, property, real estate, Social Security benefits, pensions, etc. We’re scrutinizing this to determine when we can access this money. Is some of it available later in the retirement plan? Or is it in the current plan?

We evaluate that based upon what your personal objectives are in terms of retirement income for you and your spouse. Are you going to retire while your spouse continues to work or vice versa?  All these are so unique to each personal plan that we put together for perspective clients. It is so enlightening for people to suddenly see this come together.

Bringing in the Rest of Our Team

When we add the rest of our team—our tax people and CPAs—you see things from a little bit of a different slant. We’re aware that as a team, we all have responsibilities to the various aspects of retirement planning.

The CPAs are there to establish what we call a tax plan. This is different from tax returns. These are techniques to try to mitigate as much of Uncle Sam out of your retirement life as possible. Our CPAs are critical to the success that we have in developing a plan that truly represents the options associated with people that are about to retire.

We have the same thing with estate planning and attorneys that we coordinate with from that perspective. We also have Medicare specialists. When we say, “Guided Retirement system,” we’re talking about a team of professionals that brings unique skills to offer added value to the experience.

How the Financial Plan Is Built within The Guided Retirement System

Dean Barber: Right. I want to go over some details on the building of that plan. It starts with our centralized financial planning department. They take the data that has been gathered by one of the CERTIFIED FINANCIAL PLANNER™ professionals and build that financial plan.

When they’re building that financial plan, they’re trying to determine several different things. They want to determine the proper asset allocation and Social Security strategy. In other words, when should you claim and when should your spouse claim? What is the proper spending order from which accounts?

Determining Your Probability for Success

They’re really taking a deep dive into this whole thing. When they initially build the plan, they determine what the plan would look like if they didn’t change anything. What would your probability of success be?

For example, let’s say that the plan is built and initially comes in at an 80% probability of success. That means that 80% of the time, you could follow that spending plan that you set out and keep up with the inflation numbers that we’ve put in the plan without having to ever reduce your paycheck, your retirement income.

Twenty percent of the time in that example, you may have to make an adjustment to your spending. However, 80% of the time it works. Then, the team of CERTIFIED FINANCIAL PLANNER™ professionals determines what adjustments to make to bring that probability of success up to 85%, 90%, 95%, or 99%. To do that, they have discussions with the CPA to see how taxes can be mitigated. Will that give a higher probably of success?

What about different asset allocation or using different Social Security claiming strategies? The list goes on and one with fine-tuning that plan to understand which adjustments can be made. Most of the time, they’re not huge adjustments. They’re just little tweaks.

That’s kind of like the GPS system. You’re going along, but then you need to stop and fill up the car with gas. You spend about 20 minutes to get gas and/or grab bite to eat. Suddenly, you get back in your car and it tells you your new time of arrival. That’s what this plan is doing on a consistent basis is really making sure that you stay on track for that.

The Differences Between a CFP® Professional and Someone Who Just Calls Themselves a Financial Planner

Bud Kasper: Absolutely. I want to make a couple of other necessary points. There are a lot of people that call themselves financial planners. However, it’s vitally important for future retirees and retirees to know whether they are accredited. Only CERTIFIED FINANCIAL PLANNER™ professionals and a few others are accredited designations clarifies if that person has the education and background to work that way.

My next point is to explain what fiduciary means. It becomes more and more important as we move forward because the government is starting to get a little bit more engaged. Fiduciary simply means that the interest of our clients must always legally come first. That’s important because that is an absolute commitment. In breach of that, you’ve just broken the law. Therefore, it’s a necessity that people understand that they’re working with people that are that way.

We see misrepresentations of people that call themselves planners that really are just selling products all the time. Therefore, because they don’t want to be bound by a fiduciary standard, they don’t have to be. But whose interest are they serving at that point?

Dean Barber: Exactly. That’s a great point. The bottom line is once we’ve gathered all the information from you through that discovery meeting, our team of CERTIFIED FINANCIAL PLANNER™ professionals, CPAs, estate planning attorneys, etc. all go to work for you. It’s at the point where you really get to understand what’s going on.

It’s Time for the Delivery Meeting

Once that team of professionals builds your plan, it’s time now for the delivery meeting. Here’s the way I like to think about that. It’s like going to an architect to design your dream home. You can visualize that dream home, but you need to translate all that information to the architect so that they can draw up the blueprints.

Your Financial Plan Is Like the Blueprint of a Dream Home

If you miss one detail or the architect hears something that wasn’t exactly what you meant, the time when you meet with the architect goes through the blueprints is your opportunity to fine tune those blueprints and make sure that they heard everything correctly.

I’ve done that before. The initial blueprint ends up being different than the final blueprint because you start to see things a little bit differently. You start to see things that you didn’t know were there or didn’t know were possible.

That’s the way I like to think of our delivery meeting of our Guided Retirement System to our perspective clients. This is where we’re going to lay out for you what we’ve heard, what we think, and how it all plays out for you. That’s when you get to sit down and say, “What if we did this or that different? What if we added an extra vacation in every other year?”

It’s at that point in your Guided Retirement System™ that it’s all about you. That delivery meeting sometimes might take an hour and a half to two hours because you really are going in and fine tuning. What is that experience like for people in the delivery meeting, Bud?

The Delivery Meeting Can Be an Eye-Opening Experience

Bud Kasper: I can say it in one word. Wow. It’s so eye opening when they understand the detail associated with it. A large majority of people that we meet with have never seen anything with this type of detail.

I love Dean’s analogy of the blueprint because that’s where you get to tell the person what you want to see. You’ve got a vision and want the accuracy of that to be built into your home by the professional creating that blueprint.

A Team of Professionals that Works Together for You

That’s a wonderful thing, but now what? The blueprint needs to be handed off to the supervisor of the construction so that they fully understand what it represents. Maybe they have feedback. What if a wall needs to be moved over another 18 inches to accommodate a hallway that is a little bit larger?

Now the contractor needs to talk to the electrician, plumber, and all the other experts that are building that home to the specs that were created by the person buying the home. Only through the eyes of the professionals can that dream home come true.

Dean Barber: That’s a great way to put that, Bud. Instead of architects, plumbers, and electricians, we have the CFP® professional, CPA, estate planning attorney, risk management person, and Social Security and Medicare experts. All that is being looked at by a team of professionals to build your Guided Retirement System™.

Up Next Are the Implementation Meeting and Reviews

Then comes the ongoing monitoring of that plan with all those professionals during review meetings. Bud and I realized several years ago that if you’re going to do comprehensive financial planning, it’s impossible to have a single individual do it all unless they only have a handful of clients.

Even then, it’s difficult because you need to have those subject-matter experts in all the different areas coordinating and working together. In some cases, those experts are sitting together in the same room together with the client to make sure that everybody is hearing things properly. Then, they can put their heads together and make the right things happen. That collaboration and teamwork is such a key part of our Guided Retirement System™.

Bud Kasper: Absolutely. And that’s only the beginning. After we’ve implemented the plan, we want to have another meeting to make sure that we are accurate in the positions that we have as we move forward for every aspect of the plan. It’s a critical factor and something that is ongoing.

That’s why we insist that we meet every six months. I have clients that say, “Do we really need meet? Everything’s going so well. I’m so busy with my retirement, etc.” The answer is yes because things move, amounts and wishes change.

Dean Barber: Tax codes change.

Bud Kasper: That’s a big one.

Retirement Is When the Magic Happens, But Watch Out for Some Early Tricks

Dean Barber: Inflation changes. It’s our job. It’s our professional obligation to our clients to make sure that we’re staying up to speed on what we created for them. Once you step into retirement, the magic starts to happen. But those early years of your retirement can also be some of the most dangerous when it comes to the withdrawals.

Bud and I will talk more about that on The Guided Retirement Show™ on January 18. Join Bud and I as we discuss risk with sequence of returns. That’s one of the biggest risks that comes early in retirement.

Look for the The Guided Retirement Show™ on your favorite podcast app. Make sure to subscribe to it. You can also find it out on YouTube and can subscribe to the YouTube channel.

Now that you understand what is our Guided Retirement System is all about, it’s time to take action. Get yourself into a position where you can claim financial independence as soon as possible. Many of may already be there and don’t even know it. Work because you want to, not because you think you need to.

We’re Happy to Answer More Questions About the Guided Retirement System

In closing, remember to check out our latest article, 7 Ways to Build the Best Retirement Plan. I also encourage you to pick up a copy of the Retirement Plan Checklist and watch our Retiring with $1 Million video. Last, but not least, schedule a complimentary consultation or 20-minute session in which you can meet with one of our CERTIFIED FINANCIAL PLANNER™ professionals at no obligation and ask them anything.

Bud Kasper: If you’ve never experienced something like this, you do not know what you’re missing. There is no cost or obligation to find out, so please join us. Let us share our years of experience and expertise with you to give you a framework of how retirement should be approached.

Dean Barber: It’s been a long time—35 years for me and 38 for Bud. It’s as fun today as it’s ever been. Some of the technology and things that we’ve developed are making it even better for our clients.

We appreciate everyone who joins us for America’s Wealth Management Show. I’m your host, Dean Barber, along with Bud Kasper. Stay healthy, stay safe. We’ll be back with you next week same time, same place.

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Investment advisory services offered through Modern Wealth Management, Inc., an SEC Registered Investment Adviser.

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.