Doctrine for Dollars

Written by Doug Dahmer  |  January 20, 2015

1. You need to plan for your retirement. No, really. You need to plan for your retirement.

The baby boomers who succeed in their retirement years will be the ones who develop a real, practical and actionable road map of the outcomes they desire most with the associated timelines and costs. With this information they can start to lay out the activities and financial strategies they need to put in place to achieve these outcomes.
It is not the physical plan that is critical, it is the lessons you learn through the planning process. And it is these lessons that keep us from making the big mistakes. The mistakes that lead to you outliving your money. These lessons also uncover the tax, asset management and government benefit opportunities that can add hundreds of thousands of dollars to your lifetime assets and cash flow.

That’s it. It really is that simple. Ignore this at your genuine peril. I’m sorry.

2. You need help to do it, but you’ll have trouble finding it.

Planning that can actually help you requires three things: your commitment, a trained retirement income specialist and an integrated planning software platform robust enough to manage the complex tax, cash flow optimization and government benefit calculations.

A blend of proven approaches to retirement planning with the technology to bring out specific benefits in a real life application is the target state for this emerging specialty.

Very few investment advisors are trained or experienced in retirement income planning and fewer still have access to real planning tools beyond straight-line duration calculators.

3. You need to turn your assets into a sustainable income stream.

While many people wish for the guaranteed income from a company or public service pension plan, there are many advantages to having assets not just income. Drawdown flexibility, tax minimization and estate planning among them. The central task before you is to take your accumulated assets and manage them in such a way as to let the tax advantaged, optimized capital growth and income provide the income required by your retirement plan, over your lifetime. Highly personalized, pension style investment management can do it.

4. Variability enriches. Volatility beggars.

Your plan will show you that in retirement you will have years when you spend more than others. This variability is fertile ground for retirement income planning allowing you to minimize taxes and optimize cash flow putting more money in your pocket.

Financial market volatility on the other hand is the destroyer of wealth. Traditional investment strategies and bad timing conspire to imperil your retirement unless you see to managing your money with a pension style approach designed to accommodate the inevitable market turmoil.

5. Make little mistakes.

Everyone makes mistakes. The real secret is to make little ones for which you don’t pay the rest of your life. Retirement planning, pension style investment management and forward looking tax planning are helpful in keeping mistakes in check.

6. Don’t wonder where that money went.

Everyone has expenditures that are below the radar. These are insidious expenditures you will have not thought about for months or years and they will suck you dry. Until you know what they are you can’t correct them. They could be too much householder insurance, extra club fees or auto-renew services, whatever they are they can add up to thousands. Always know what you spend where.

7. Whatever you do, don’t do what you’re doing.

Tax and investment strategies that worked well in your accumulation years can be disastrous in retirement.

There are significant tax traps looming for the unprepared retiree that can only be mitigated with proper tax planning.

Buy and hold, is the mantra of the investment salesperson. It is the most common investment strategy and will inevitably, if followed in retirement, hurt you. Your draw down years need a very different investment strategy.

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