Loren the Game of Life it came out
in 1960. A board game that you had in your household growing up? Most definitely we played lot of games growing up and this is one
of them. Okay so today what we want to do is we want to go through the milestones of life we're
kind of going to do it in numbers. So in a way we're taking some liberties here the board game is
like a series of numbers as you move through life. And as we specifically talk about moving to and
through retirement what we want to do is give you strategies give you tips gives you things you
should be talking to a retirement planner about. And we'll have a little fun with the Game of Life
along the way.
But we should first talk about how we look at every retirement whether you come
talk with you Loren if you're 55 or 75. We apply five guiding principles to your retirement
to help you win the game of life. Yeah there's two distinct phases of life there's accumulation years
then there's the retirement years. And when it comes to those retirement years that's when it's
important to really start to get organized in the form of retirement plan. And in that retirement
plan there are five guiding principles. When you retire you still need income your W-2 wages
go away where's the income going to come from? When you take income you're still going to have to
pay taxes there's long-term care Medicare planning legacy planning and then of course the fifth one
is the investment planning principle. Okay so we have our cars this is the cutest little thing I've
got six people in my car because I've got four children and my husband in here. Loren has his
daughter Jace and the little dog Coco no Mocha, Mocha is in the car with Loren.
So Loren like I
said we're gonna have a little fun with this. Why don't you spin once for the first time and then
we won't spin to continue. But we'll get started on our game. Oh two, alright Loren gets started on
two. Would you like me to take the, goes he goes two. And let's draw a card just fun so we can kind
of refresh ourselves on what the cards are for the Game of Life. I'll draw the card, I'll answer the
first one. Alright you go first. Ah get a pool, I like this first card you probably like that
Jace would like to get a pool as well.
So it says pay the bank $50,000. Wow, pools are expensive.
Well, that sounds a lot like today's prices. So that's the first stop or the first card that we've
picked on the game of life. Now the first stop on your journey to and through retirement as we
pull the numbers kind of on your board game is age 50. So you're going through the game of
life you hit age 50.
What should you be thinking about in terms of retirement? From a retirement
planning standpoint age 50 is a milestone. A big portion of this milestone is now you're able
to contribute more towards your retirement savings than what you've ever been able to do before.
If you're under age 50 into your IRA the max you can contribute is $6,000 but at age 50 you
have a thousand dollar catch-up contribution. So a total now of $7,000 but here's
where the real fun comes into play. At age 50 is through your employer sponsor plans
your 401k plans. Before age 50 you could only contribute up to $19,500 you get an extra $6,500
contribution bonus if you will.
Once you obtain age 50 for a total contribution of $26,000. So
now if you're age 50 or beyond you can actually contribute the max to your 401k plan. And if you
qualify from an income standpoint also you can contribute the max to your IRA. So, the 7,000 plus
the 26.5 now you can start saving for retirement and accumulate that wealth a lot more quicker.
And you ever have conversations with people about you know is it usually a no-brainer contribute
that 6,500 or do they have to look at all the other moving pieces in their life too. Because at
50 I know I'll still have kids at home, a lot of people still have kids at home so that 6,500 feels
like a lot of money.
It does feel like a lot of money and so it's different for everybody. In each
one of these milestones that we talk about here on this on this show. The outcomes or the strategies
that you incorporate with it will be different for everybody. And that's the necessity of a
customized written plan as you make the transition from the working years to the retirement years.
Your life your circumstances your resources that you have your cash flow is different than most
other people. So your plan needs to be customized to your circumstance. Okay I have to spin I
know I cannot spin a two that's not hard to do, I got three okay I'm gonna take the bus here
go with me and the four kids we got three.
Alright here we go, promotion!
Your hard work paid off spin again. So a promotion obviously is a real piece of
retirement and the nice thing about a promotion is maybe you can contribute a little bit more to
that 401k or or do a little bit more retirement planning as those promotions come along so. Let's
talk about our next stop on the game of life retirement style and it's age 55. What do we need
to know there? Age 55 is an important milestone because now if you separate service from your
employer and you have an employer-sponsored plan now you have penalty free withdrawal privilege.
And this is a very little known loophole as it relates to these employer-sponsored plans. So,
if you're working with your employer you're 56 years old you retire or you get laid off or you
just decide hey i'm going to go somewhere else if you take your distributions from that employer
plan you will not have to pay that 10% penalty even though you're under age 59 and a half.
lot of people think 59 and a half I take money out of my retirement plan I'm going to be imposed
that 10% penalty but if you take it after you separate service post 55 from that employer plan
you don't have that 10% penalty. And when you say take it can you take it all at once is that the
best strategy typically or do you want to spread that out? Well there's a couple different things
that goes into that. Let's say you can take it all once so if you have $200,000 underneath your
employer plan your 56 you leave that employer. You can take that full $200,000 out but if it's
pre-tax money meaning it's never been taxed before it's going to jump you up into a tax bracket that
So even though you can, you may not want. So you can't put it in an IRA or something right
away? You can put it into an IRA but once you do so now that money lives underneath the IRA rules.
Which means you cannot take it out until 59 and a half without the 10% penalty so here's where a
lot of the planning will come into play especially if you want to retire prior to 59 and a half.
Is you may choose to leave that $200,000 there maybe you have some other IRA money that you know
you're not going to use until post 59 and a half or you can say between 56 and 59 and a half you're
only going to need a 100,000 of that so many times the employer's plan will allow you to roll the
100,000 keep a 100,000 there and then you can use that for the penalty free cash flow.
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foreign 1950 as well I should state when you retired you.
weren'' t thinking about the golden years you weren ' t reasoning of traveling the world perhaps as long as.
as people today due to the fact that you maybe just live 10 more years in prior to you died yeah and also.
a great deal of the placements were laborer placements so you labor for 40 years your body is aching and.
a great deal of times retirement was compelled even if you couldn'' t they couldn ' t do that sort of job
. prior to whereas currently individuals rest behind a desk behind a computer system display and you can continue to do that.
for a while lots of people can if desired however the the retirement that people are taking a look at today.
primary traveling is a great deal much easier currently specifically worldwide traveling than what it was in the 50s.
and there'' s a great deal of various other activities that we can amuse ourselves keeping that we simply didn'' t. have in the 50s so quality of life is a lot better home entertainment alternatives are better and individuals.
are truly delighted to reach that time structure where they don'' t have to awaken and most likely to function every. day they can get up as well as do anything they select to do and now the the challenge is is just how do you.
finance that right just how do you just how do you fund your retired life Vision with the life cost savings that.
you'' ve you'' ve saved that you ' ve produced throughout your your shift framework which is.
something in the 50s they didn'' t need to take care of because really little of their retirement was.
reliant upon savings it was the pensions and Social Safety and security as we pointed out earlier and isn'' t. that the huge concern actually just how much am I going to spend in retired life as well as I understand I'' ve heard you.
talk about it'' s not actually a straight line it'' s a lot more possibly even a smiley face at the start.
perhaps you'' re spending a whole lot a little much less and also then possibly a whole lot once more what what represent.
that which is likewise a difference compared to 7 years earlier because when you retire in your two.
resources of retired life earnings are from assured resources that are defined your Social Safety and security.
payment was specified you understood precisely what that was your pension settlement was defined he recognized that.
that'' s specifically what that was that'' s all you needed to spend whereas today you have perhaps this pail.
of investment financial savings let'' s call it 5 hundred thousand dollars then you have fifteen hundred.
bucks a month coming from Social Protection and also you need 5 thousand dollars a month to live.
on well in the initial ten years of your retired life that'' s the Go-Go years when you have
a great deal of. energy You ' re motivated you'' re thrilled concerning this freedom of time and you intend to go off and also do all.
these things you never had time to do before well it'' s truly very easy after that to dip into more of that
500. 000 savings than than what maybe you must or the concern mark we typically get is can we right can you.
dip into that cost savings previously on right into retired life with the suggestion in mind that after 10 years of.
retirement throughout the slow-moving go years when you don'' t have as much motivation maybe you'' re you ' re. not feeling as energetic that you'' re not going to require as much cash to spend as what you did during.
the go go years so how how do you establish what this pot of of cash what this bucket of.
financial savings can really provide for you in the go go years versus the slow-moving go years and after that the no.
go years and the no go years remarkably for a great deal of senior citizens is where they need to spend a.
great deal of cash a lot more so than the Go-Go years since in the no go years this is where the.
long-lasting care expenditures seem to set in and also the the you understand the last expenditure that comes with.
durability where we might not be doing the important things we intend to do however we'' re costs money on the points.
that we need to invest money on like the health treatment and the long-lasting care thank you for watching.
this clip of retiring today if you have concerns about your retired life routine a free.
15-minute retirement checkup telephone call.