Module III Bootcamp

1. Module III Bootcamp
Comprehensive Retirement
Planning

2. Retirement Planning 101
Accumulation
…the challenge involved in
efficiently turning income into
wealth
Decumulation
…the challenge involved in efficiently
turning wealth into income
• Emotional
• Variety of income sources with
various rules and tax implications
• Possibility of new income sources
Starting with the Social Security filing
decision, an advisor can learn their
clients’ other needs:
• Estate Planning
• Medicare
• Long term care
• Life insurance
• Annuities
• Real estate / Mortgages
• Etc.

3. Fixed vs Variable Spending
Fixed Essential Expenses
• Mortgage
• Property Taxes
• Home Insurance
• Medicare Part B Premiums
• Income Taxes
• Other Fixed Expenses
Variable Discretionary Expenses
• Household/Utilities
• Food, groceries, dining out
• Transportation
• Health Care
• Personal Care
• Travel/Entertainment

4. The three-legged stool shown in Figure 1.2 became a metaphor for how the post-World War II generation looked at
planning for retirement. The three legs represented an employer pension, employee savings, and Social Security. Each
leg was needed to build a strong retirement foundation and without one, the three-legged stool would not function.
The Three-Legged Stool

5. Tax-Efficient Retirement Strategies
Plan Timing of Social Security
Higher portion of Combined Income results
in lower taxation
Shift taxable investments from
income to growth-type
Lower AGI to lower Social Security taxation
Shift funds to tax-deferred or –
preferred accounts or products
Lower AGI
Traditional Retirement Advice
• Claim Social Security early
• Draw upon taxable, non-retirement
accounts first
• Leave IRA accounts alone until age 73
RMDs
Wiser Way to Examine
• Delay and strategize Social Security
claiming decision
• Draw down RMD account funds early
(i.e., age 62 to 70)
• Lower IRA RMDs later may reduce
taxes on SS

6. 3 Keys to Know
1. Happy retirees started planning at least 5 years early
2. RMD age has been increasing: currently starts at 73 if not 72 on/before Jan 1, 2023. SECURE 2.0 Act
3. May start withdrawing at 59 ½ without penalty
Portion of income from SS can =

7. Program Solvency & Solution
1983 Amendments were meant to extend solvency until 2020
This is has been exceeded! Solvent until 2034 currently.
The excess funds will then run out, and the system will again be “pay as you go,” if no
action is taken.
• Change COLA determination
• Increase retirement age or
eligibility age
• Modify PIA calculation
• Increase payroll taxes
• Increase/eliminate
maximum taxable earnings
• Modify benefit taxation
• Invest trust funds
• Modify family benefits