When you complete a crossword puzzle, every letter and word needs to be right in order to achieve success. Similarly, a financial plan has a lot of intersecting parts that need to be aligned in order to achieve your goals. Are you ready to play?
Click the timestamps below to jump ahead in the episode…
Other Retirement Facts:
As we all try to stay put and stay busy at home, some of us are getting into puzzles and games. Today we have a financial crossword puzzle. Building a financial plan can have several parallels to completing a crossword puzzle. As soon as you get one part filled in, the other segments of the plan build off of that. Do you have all of the pieces in place correctly?
When you look toward retirement, a big piece of the puzzle is determining how much income you will need in retirement. Sometimes people can come up with numbers that don’t line up with their actual needs. Are you factoring in more than just basic utilities? What do you want your retirement to look like?
Another key piece is figuring out your risk tolerance. It’s easy to have a seemingly high risk tolerance when things are going well. But when the market is down, how risky can you truly be? Understanding the reality of risk is important in order to position your investments accordingly.
As you build out your plan, is life insurance something that should factor into it? Some think that once the kids are out of the house and the mortgage is paid off that you don’t need it anymore. Is this really the case? What factors do you need to consider if one spouse passes away? Or if you need long-term care?
Taxes are another big area that can sometimes get overlooked. Assuming that taxes will be lower in retirement is not a solid strategy. Taxes are bound to change and for most people won’t be lower for all of retirement.
Are all of your financial pieces lining up the way they should for a cohesive plan?
Listen to the full episode or click on the timestamps below to hear more about a specific element of financial planning.
0:45 – Financial planning is a lot like doing a crossword puzzle.
2:27 – Puzzle line #1: Determining how much income we need in retirement.
6:17 – Puzzle line #2: Determining the proper amount of risk.
10:33 – Puzzle line #3: Should you have life insurance?
13:42 – Puzzle line #4: Addressing long-term care expenses.
16:35 – Puzzle line #5: Taxes won’t stay the same as right now in the long-term.
19:32 – Puzzle line #6: How much can you realistically withdraw from savings?
21:02 – Mailbag: Selling the farm and about to retire. What should you do with the money?
A Quotable Moment: