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Financial Symmetry: Balancing Today with Retirement

When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, Chad Smith and Mike Eklund unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only financial advisors who answer questions about tax savings, investment decisions, and how to save more. If you’ve been putting off your financial to-do list or are just not sure what you’ve been missing, subscribe to the show and learn more at www.financialsymmetry.com. Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for over 20 years.
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Now displaying: February, 2020
Feb 24, 2020

Will your retirement regrets list be full of "I wish I would have...?" What if you could use regrets of other retirees to change or improve your current course?

Short Youtube Recap here: https://youtu.be/CiGxXeem2yI

Listening to the wisdom of those that have gone before you, can help you avoid their big mistakes and take advantage of financial opportunities you may have missed.

In our role as financial advisors, we have the unique opportunity of hearing a long list of retirement regrets. In listening to their perspectives, we gain an understanding of the path they took and the things they wish they could have done to prepare for retirement.

In this episode of the Financial Symmetry podcast with Chad Smith and Allison Berger, we break down the top retirement regrets that investors typically experience. Listen in so you can learn from others and ensure that you don’t make the same mistakes they did.

9 Avoidable Retirement Regrets

  1. I wish I had a detailed retirement plan. 3 out of 4 baby boomers don’t have a detailed retirement plan. Without a retirement plan, it makes it hard to anticipate what may come next. You'll need to consider those big purchases, how often will you buy cars, and if you are going to move. Life can feel much more uncertain in retirement, without the dependability of a steady income you’ve relied on your entire working life. Without a plan, opportunities could be passing you by each year.
  2. I wish I hadn’t planned to work so long. There are many people who plan to work until age 70, but due to unforeseen issues, they had to stop working before they were ready. Some had to stop due to family illness, layoffs, or forced early retirement. Whatever the reason, running what-if scenarios could leave you more prepared to face the unknown risks that are lurking.
  3. I wish I would have started saving in a tax-free account earlier. An often overlooked strategy while saving, is your lifetime tax rate. By focusing on tax-free savings, it creates flexibility for future retirement withdrawals. There are many that think they can’t take advantage of a Roth IRA due to having a high income, but there are options. Back-door Roths, after-tax 401k savings and HSA's all offer other opportunities. We've included past detailed episodes on all three in the links below.
  4. I wish I didn’t have such a big house. Many people become enamored with the idea of a mansion. So much that they sacrifice saving in retirement accounts. More expensive homes require more expensive upkeep. The social pressures in higher priced neighborhoods cause extra lifestyle creep. Years pass, and you realize savings isn't where you thought it would be. Once reaching retirement, downsizing becomes the new trend but moving is often delayed due to frustrations of moving and decluttering their homes.
  5. I wish I hadn’t worried so much about market drops. The idea that you could lose half of your savings is scary. There is always a reason you should not invest, but inflation is the silent killer that awaits you, if you don't. Finding the appropriate risk is vital to helping you sleep at night. Research shows a tremendous difference when missing the best days in the market. So while timing market drops is tempting, a buy and hold strategy with appropriate percentages of risk is your best bet.
  6. I wish I hadn’t counted on rental income. Be careful about counting on rental real estate if that is your plan. Assure you are factoring in all expenses to your calculation with forecasting returns on rental real estate. Appreciation rates will suffer, if proper maintenance is not kept up on properties. This could affect the long-term health of your financial plan.
  7. I wish I would have invested more in friendships. Think intentionally about how you will spend your time in retirement. Many people end up socially isolated in retirement. Retiring to something vs. from something can add to happiness levels and improve your odds of a successful retirement with less regret.
  8. I wish I hadn’t taken Social Security so early. Delaying Social Security can be a benefit in multiple ways. An alarming amount of people (57%) take Social Security before their full retirement age. This decreases the amount they could receive and provides more tax flexibility. Less guaranteed income, provides for more IRA/401k withdrawals at lower tax rates potentially.  If you are married, you might also consider the survivor benefit element. Listen in to hear details of the benefits of delaying your Social Security.
  9. I wish I had had more experiences. Many wish they had traveled more while they were healthy or while their kids were still at home. Too many look back with the regret of waiting to late to travel.

Outline of This Episode

  • [3:07] I wish I would have had a detailed plan earlier
  • [5:06] I wish I hadn’t planned to work so long
  • [7:07] I wish I would have started saving in a tax-free account earlier
  • [10:30] I wish I didn’t have such a big house
  • [12:47] I wish I hadn’t worried so much about market drops
  • [17:45] I wish I hadn’t counted on rental income
  • [20:33] I wish I would have invested more in friendships
  • [22:45] I wish I hadn’t taken Social Security so early
  • [26:00] I wish I had had more experiences

Resources & People Mentioned

The Financial Symmetry Podcast is an original podcast from Financial Symmetry in Raleigh, NC. To learn more about the show or the past 104 episodes, visit https://www.financialsymmetry.com/retirement-podcast/.

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Feb 10, 2020

How closely did you look at your Medicare premium notice letter this past December? If it mentioned an IRMAA adjustment, and you experienced a life-changing event, you may want to look again. There's a few steps you can take that can save you thousands of dollars in Medicare premiums. In this episode, we are breaking down the the tax cliff known as IRMAA and how proper planning can help you avoid overpaying for your Part B and Part D Medicare premiums.

YouTube recap: https://youtu.be/BQ7K_DeJiHs

What is IRMAA?

This often misunderstood or overlooked area of the tax code is how Medicare determines the premiums that are automatically taken from your Social Security check. IRMAA stands for Income Related Monthly Adjustment Amount. Understanding the IRMAA threshold is key to understanding your Medicare premium. 

Watch out for the IRMAA tax cliff

Generally, when you think about Medicare you think about age 65 and above. It’s actually important to begin thinking about Medicare when you are 63. Your Medicare premium at age 65 is actually based on the income that you made 2 years prior. So if you were in one of the higher income brackets before you retired, your Medicare premium will reflect that. There are 5 tiers of IRMAA and if you go even $1 over you will be knocked into the next bracket. If you end up in the highest tier you could be paying over $4000 in extra Medicare Part B premiums. 

How can you plan ahead?

Now that you know about IRMAA you can begin to plan ahead. If your AGI is $87,000 or less for singles or $174,000 or less for a married couple then you will qualify for the Medicare Part B baseline premium which is $144.66 per person per month. It’s important to understand your income sources and whether they are taxable or not. Knowing where you fit in the IRMAA tiers will save you money. Listen in to hear more about IRMAA and how it can affect your retirement plans. 

What can you do to appeal?

If you didn’t plan ahead and are stuck with high premiums you may be able to appeal. You can appeal based on marriage, divorce, death of a spouse, work stoppage, work reduction, or loss of income. If you qualify for an appeal then you’ll need to fill out an SSA44. There are 5 steps to follow to appeal process. Listen in to discover what you can do if IRMAA has got you down. 

Outline of This Episode

  • [3:27] Which parts of Medicare does IRMAA affect?
  • [7:20] An example
  • [9:55] How can you appeal?

Resources & People Mentioned

Connect with Grayson Blazek

Connect With Chad and Mike

Subscribe To This Podcast

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