There are 3 Phases of Retirement that our listeners are in and working towards.
3 Phases of Retirement: Work, Income, Transfer
This is our 20’s, 30’s, and 40’s. We are working, building our retirements.
Focus in this first phase is building our assets, growing our families, and getting into The American Dream.
401k, IRA’s and Roth IRA’s are your kick start toward retirement. If you leave your employer, that 401k is available to rollover into an IRA, and we have many great options to protect and grow those IRA’s and Roth IRA’s. Rule 1…Don’t Lose It (remember the tortoise and the hare!)
THE RED ZONE… is called approximately 5 to 15 years prior to retirement, so at age 50 to 65. We are at the end of the Work Phase, and we must begin to “transition” toward retirement.
In this transition we begin to reduce risk of loss, maximize our savings from our checkbook to our Put & Keep Retirement Accounts, and work towards positioning our retirement accounts for income, and less and less for risky growth.
Susie Roman said recently on The Today Show... ”when you are 10 to 15 years from retirement, you must move your assets out of risk into safety so that they will be there when you need them”.
We are retired. Whew! Finally. Now, what is #1 risk to your retirement? Yes… LOSS!
We say on the radio show every week… "everyone has the same needs in retirement, and everyone makes the same mistakes".
Retiree Mistake List
Leaving your assets at risk
Large sums in banks or money markets (guaranteed to lose 50 to 70%!..to inflation)
No income Plan
No Retirement Plan on Paper… reportability assures responsibility!
No Plan to Minimize Taxes
Taxes robbing your Social Security
No provisions for “What If”
Is at that point when all of your retirement needs are met or exceeded. At this point we have to address a proper plan to “Transfer” your Estate to your Legacy.
Like it or not, the IRS has an employee sitting down at Denny’s waiting for those “un-planned” transfers.
IRA’s…yes, your spouse will inherit that IRA as a Spousal Beneficiary IRA. But Ed Slott our RETIREMENT TAX EXPERT on PBS, warns that your IRA over time and at transfer can be a “TAX TIME BOMB’…if left unplanned.
Estate Taxes…while not an issue in 2010, is a growing concern to your Estate. No one knows when that transfer might occur! Ask Elvis, Anna Nicole Smith,or Jim Kick the marathon champ.
Do you know, properly planned you can leave a much larger Estate to your heirs TAX FREE, than fully taxable?!?!