Risk & Business Magazine Marcotte The Magazine - Winter 2018 | Page 31

RETIREMENT the projected total income up against your essential expenses and see how much you have left over. coinciding with your entry into retirement may make you want to revisit your portfolio allocations as well. Try living on that level of monthly income for a month or more while you are still working. If it covers your necessary monthly expenses and not much else, then some adjustments in your retirement strategy might be needed, like a housing change or a change in your retirement date. Take a second look at your projected monthly income. Will it be consistent? If it will vary, you will want to address that. If you are in line for a pension, you will face a major, likely irrevocable, financial decision: should it be single life, or joint- and-survivor? The latter option would reduce your pension income in retirement but give your spouse 50 percent or more of your pension payments after you die. Your employer might also offer you a lump-sum pension buyout; if that turns out to be the case, you will have to decide if the lump sum constitutes the better deal versus a lifelong income stream. 1 SEE HOW IT FEELS TO RETIRE. Before you conclude your career, try to arrange some “previews” of your retirement lifestyle. If you want to serve your community, volunteer avidly for a month or two to get a taste of what daily volunteer work is like. If you see yourself traveling enthusiastically at the start of retirement, take a dream vacation or even a couple of consecutive trips (if your schedule allows) to see how they truly fit into your financial picture. YOUR “REHEARSAL” NEED NOT BE LAST MINUTE. If you think you will retire at 65, you could try doing this at 63, 60, or even before then. The earlier your attempt, the more time you have to alter your retirement plan if needed. WHAT ELSE SHOULD YOU CONSIDER AS YOU REHEARSE? Besides income, expenses, and the day-to- day retirement experience, there are a few other factors to gauge. How much cash do you have on hand? Starting retirement with a strong cash position provides you with some insulation if you happen to retire during a market downturn. The possibility of a bear market How about your entry into Medicare? You may enroll in it at medicare.gov within a six-month window of your 65th birthday (that is, beginning three months prior to your birthday month and ending three months after it). If you sign up before your birthday, you will be covered beginning on the first day of your birthday month. Sign up following your 65th birthday and you may have to wait a few months for coverage to begin. 2 If you plan to stay on the job after 65, sign up for Medicare Part A anyway (the part that pays for hospital care) within the usual six-month window. It will not cost you anything to do so, and sometimes Part A makes up for shortcomings in employer- sponsored health plans. You can enroll in Part B and other Medicare component parts later—within eight months of your retirement, to be precise. You will want to pay attention to that eight-month deadline, as your premiums will jump 10 percent This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. + Citations. 1 kiplinger.com/article/retirement/T047-C000-S002-put-your-pension-to-work.html [1/16] 2 medicare.gov/sign-up-change-plans/get-parts-a-and-b/when-coverage-starts/when-coverage-starts.html [10/20/16] 3 fool.com/investing/2016/09/18/5-tips-to-avoiding-common-medicare-missteps.aspx [9/18/16] for every 12-month period afterward that you refrain from enrolling. If you pay for your own insurance, you will still need to enroll in Medicare when you are eligible (Medicare will make that coverage superfluous, so you can anticipate dropping it). 3 REHEARSING FOR RETIREMENT CAN BE VERY INSIGHTFUL. Some new retirees leave work abruptly only to have their financial and lifestyle assumptions jarred. As you want to make a smooth retirement transition to a future that corresponds to your expectations, test- driving your retirement before it begins is only wise. BY: JOSEPH JOHN VICE PRESIDENT, FINANCIAL PLANNER Joseph John, a University of Nebraska – Kearney graduate, has over 25 years experience in the financial services industry. Joe is one of the principals of Marcotte and serves on the Board of Directors. Joe works with his clients on a one-on-one basis by providing personalized, fee-based financial planning and wealth management services. Joe has earned his Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC), Registered Health Underwriter (RHU), and Registered Employee Benefits Consultant (REBC) designations. Joe is a Registered Investment Advisor (RIA), and is licensed in Life, Health and Annuities Insurance and FINRA Series 6, 63 and 65 registrations. He is a Qualifying and Life member of the Million Dollar Round Table. You can reach Joe at 402- 970-3336 or [email protected] 31