By John J. Checki Jr., CPA, CFP®, CRC® and J.J. Checki III
A client asked, “We have worked hard. We had and educated our kids, and are enjoying our grandchildren. Heck, we have been saving and investing, since we graduated from college. Now we would like to make some plans to see if we can retire. We have one question: ‘How can I be sure I won’t run out of money while we are doing what is important to me and my family?’ Oh, one more question, ‘How do we pay our bills?’”
How much money do we have? How long do we plan on living? (No kidding.) Who are we planning on supporting? (Yes, there are some people approaching retirement and still have their children and/or grandchildren living with them.) Health, just how healthy or sick are we and what is our family history? Do we still have a mortgage, car loans, credit cards with balances, a Home Equity Loan? What are we planning on doing when we are not working? Do we want to travel, buy a second home in Colorado? What are our spending habits and needs? What do we do for fun? And how expensive is that? Hobbies, do we have hobbies, or horses, or boats, or motorcycles or collect cars or art or watches? How is our family doing? Taxes, do we pay our taxes on time or do we owe some? Any legal actions pending or do you anticipate any developing? And, how do we make our decisions?
The Possible Solution
I don’t know how some folks wing it when it comes to planning ahead, and I don’t recommend closing our eyes and running as fast as we can either. We have a process, and a series of questions that help us help you identify your Values, Goals, Assets, Liabilities, Hopes, Dreams, Process (how you like to process), Relationships, Health Issues, Hobbies, Family, Travel, and whatever else pops up during the interview. The only way to get to know the possible solution is to know the problem and the solution that makes the most sense to you.
Illustrate the Issue
After years of having people reach retirement age, whether by choice or by notice, we now have a process, methods, and experience (which is constantly being updated), to help us give you some illustrations of how this has worked and could work.
Case One: Modest Lifestyle and Inheritance Late In Life
Some people chose their families well and inherited money. The lucky ones inherited later in life. They were college educated, taught school, saved, and approached retirement age, and just in time, a trust kicked in and helped them retire. The key was not the inheritance. They had modest expectations and lifestyle, they had worked, saved, built a cabin on a local lake (by hand themselves), and made a life for themselves, then money fell out of the trust to help fund that next stage in life. The lady passed away the first day of this year and her husband is doing his best to live one step at a time as he grieves and tries to be there for the rest of his family and friends. By the way, having family, friends, church, and people who care about us is a real bonus when we jump from work to whoops. You have to fill that time previously spent at work and commuting with some new adventures.
Case Two: Married Once, Children, Work, Save/Invest
Before the books came out years ago on who the millionaires are and how they really live, simple common sense told us the story. Prepare for the future. Get an education, profession, or skill, settle down, raise a family, buy one home and stay there, save 10%, and put it where it has the potential to grow, and golly miss molly, life seemed to work out. (No guarantees implied.)
Personally, I have seen and counseled couples who did all of the above and did just fine and still are. They tend to buy a car or truck and keep it for a long time, buy one home and keep it, get married once and stay married. Oh, yes, in time there is sickness as well as health. With some planning and action, trips of a lifetime were taken sooner rather than later so when they entered the doctor-to-doctor stage of life they had nice memories of trips taken.
Case Three: Saved/Invested, Just Can’t Seem To Spend Money
Some clients were scared to death years ago, so they worked lived modestly, saved, begged for guarantees and floors under their investments, and finally accumulated the magic number to begin retirement. Great, then worked several more years, saved more. Finally retired and hardly spend their Social Security income. Yep, they are not spending the money they piled up, and now that they are 70 ½, they are taking money out of their IRAs like the government said they are supposed to. Still not spending the withdrawals. Yes, I have asked them to travel and spend more, and they are doing their best. No, they do not want to adopt you.
Case Four: Legacy in the Works
Okay you are 95 sneaking up on 96 and the company informs you, both take this money and pay the taxes or we will annuitize it for you and you will lose control of your funds. So, we came up with a plan, and are funding that plan for the next couple of generations, doing our best with legal counsel to protect the next generation from lawsuits, future ex-spouses, and creditors.
The best advice I have heard is, “Live modestly and save aggressively.” Faith seems to help, along with having a passionate purpose and mission in life.
Securities are offered through Securities America Inc., member FINRA and SIPC, Advisor services offered through Securities America Advisors., an SEC Registered Investment Advisor. John Checki, Jr. Representative. This is not a CPA Firm.
John and his firm have been helping some of the nicest families in North Dallas, Richardson, Plano, and Frisco for about 30 years. We specialize in Wealth Management for Baby Boomers and have a unique and complete Wealth Management Process. You can read the rest of our story on my website. My proudest accomplishment is my family: Children, Grandchildren, and Wife. We love to travel, scuba dive, take pictures, study, and attend family and church gatherings.