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
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 of a 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,
expenses 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
- 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
- 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!