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Listen to Johnson Brunetti's Money Wisdom with Joel Johnson CFP®, host of Better Money Television program and Forbes Contributor. Gain true financial wisdom and advice aimed at educating you about all of your financial options when it comes to retirement so you can make the best decisions for you and your family. Get information and education that can bring you peace of mind with your savings and retirement. Whether it’s your 401k account, IRA, or an underperforming asset, Joel Johnson can answer your questions and make you more aware of issues that may affect you.

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Jun 29, 2018

Learn about all of the different gaps that you need to be aware of when planning your financial and retirement plan. Along with, how to replace the income lost within those gaps.

Main Questions Asked:

What are some of the financial gaps that come up during retirement?

How to create paychecks for life that make up for money lost after stopping working?

Key Lessons Learned:

Gaps in Retirement Planning

  • The paycheck gap. How do you supplement your loss of a regular paycheck? Fill the gap created by the loss a of paycheck with investments and money that you have saved. This takes careful planning and consideration of possible life circumstances.
  • Social Security or Medicare gap. If you retire before 65, you may have a gap before Medicare kicks in. You also get a smaller benefit if you retire early. Questions about health insurance and retirement planning can be answered by creating a plan and working with a qualified advisor to find the right strategies.
  • Inflation gap. Inflation is one of the most insidious things to hit you during retirement years. Depending on how long you live, expensed could triple during retirement. How are you going to triple your income? It’s important to have a plan that takes into account the inflation gap.
  • Long-term care gap. Everything can be great until someone needs long-term care. You need a plan that covers contingencies for long-term care and the increased expenses that go along with that.
  • Widow’s gap. The income gap that is created with the death of the first spouse. One social security check goes away and retirement plans can change. There has to be a plan in place to cover expenses lost if this gap arises. This could be income made up in investments or even a second amount of savings.

Good Things or Bad Things to Put Off

  • Putting off or deferring taxes. This is a good thing when you are in a high tax bracket now. With after tax contributions, the money can grow tax free and can even be accessed before retiring. Deferring taxes depends on the tax bracket you are in today, and what the bracket will be when you retire. Roth conversions can make sense for some individuals.
  • Eliminating debt. There is freedom that comes from not owing anyone anything. It’s not just about the money. Pay off the high interest debt first. Pay down everything you can even your mortgage. Although, it can even make sense for some to have a mortgage during retirement.
  • Setting up legal and estate documents. Take care of this right away. Look into getting an estate plan, a trust, or even a trust where you control the way people spend your money. Estate planning encompasses asset protection, reduction of assets and fees, and control.
  • Starting your Social Security. The less money you have, the longer you should wait to draw Social Security. This is another retirement asset. Look at it as another asset and decide the best strategy for your individual circumstances.

Links To Resources Mentioned

Money Map Retirement Review


Thank you for listening!