2013 Garrett Planning Network Retreat

The Garrett Planning Network 13th Annual Retreat was recently held in Kansas City, Missouri. I am a member of the Garrett Planning Network. It is a group of about 300 financial planners that offer financial planning on an hourly basis, each member owns their own firm. I have written about the Garrett Planning Network before.

I attended the conference and earned continuing education credits by going to various educational programs, which I need so that I can keep my designations and licenses such as:

  • CERTIFIED FINANCIAL PLANNER™
  • CHARTERED RETIREMENT PLANNING COUNSELOR℠
  • NAPFA Registered Financial Advisor

During the four day conference I attended various educational programs such as:

  • State of the Industry
  • The 7Twelve Portfolio: A Better Balanced Portfolio
  • Long Term Care Planning – Past Present Future
  • Estate Planning Update
  • And others

Ron Rhoades, JD, CFP ®  of ScholarFi, Inc., gave one of the Keynote addresses on the state of the Industry:  Will Fiduciary Duties be expanded – by the DOL or the SEC? In the fast-paced presentation, professor Rhoades covered various trends about the CFP Board, marketing of financial services and future effective business models.

Craig L. Israelsen, Ph.D. gave a keynote address on the 7Twelve Portfolio: A Better Balanced Portfolio. Laurence B. Siegel, another keynote speaker, spoke on Wake up and Smell the Coffee! Investors are Poorly Prepared for Retirement – A Balance Sheet Solution.

Throughout the year, the Garrett Planning Network, has three or four conference calls each month.  One of the most beneficial outcomes of my annual trip to this retreat, is getting together with this group in person. On Thursday I was with a group of Garrett Planning Network members and Sheryl Garrett as Sheryl rang the closing bell at the BATS Global Markets stock exchange, the third largest exchange in the world. We took a tour of the exchange.  It was inspiring to learn about the volume of trades that goes through there.

Another a highlight for me, is that I met Gail Marks Jarvis and she signed a copy of her new book for me. She is a very knowledgeable journalist for the Chicago Tribune and really roots for the consumer.  One discussion point that really connected with me was something she mentioned at the book signing table.  She talked about the fact that investors do not care about percentages they care about dollars.  Their dollars.  I agree wholeheartedly.  It is something that I have kept in mind for years when I talk with someone about what allocation model is best for them.

Garrett Planning Network is a terrific group of professional financial planners who, like me, work with clients on an hourly basis.  We share ideas and act as a resource for each other all year, so it is so nice to get together once a year and see each other again.

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Long Term Care Insurance: Protect your nest egg

You spend your entire working career putting aside money in order to have a sufficient nest egg in retirement so that you can do the activities that you enjoy with the people you care about most.

There are risks to that goal that you need to be aware of and you need to take steps to mitigate that risk.

One of those risks is that you or your spouse will become ill and need some type of expensive assisted living care for an extended period of time.

Cost of care in Missouri

In the state of Missouri the average cost of assisted living care is $54,000 a year.  Consider what impact a three year, $162,000 stay would have on your portfolio while a spouse is still living at home with the usual bills.  Or, if you are single, you will often still have your usual day-to-day living expenses because family members are often hesitant to sell your home, in the hopes that you will return, or they are not yet ready for the task of selling.  Now consider the fact that healthcare costs are increasing faster than the standard rate of inflation and you can see how an extended stay could be a risk to your retirement goals.

Purchasing a policy 

A Long Term Care policy can cover different types of nursing care ranging from in home care to a private room with fully-assisted living care.

You can purchase a policy to cover the majority of the cost, or even just a portion in order to help offset the cost, if something were to happen to you.

Purchasing a LTC policy can help preserve your assets so that they can last your lifetime, and help financially protect a spouse should one of you require expensive care.

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Retirement Plan: 10 Expenses to Consider

Part of the process of determining if you can afford to retire, is to run the numbers to see if the amount of money you have saved plus any expected income you may receive from pensions and Social Security will cover all of your expected expenses throughout retirement.

After working with people for so many years, the one thing I have noticed is that many people have faithfully kept spreadsheets of their day-to-day living expenses and have used those figures to help create their retirement plan.  People often come to me to check their thinking, when they are a few years away from retirement, to make sure they are on track to retire.

However, I often discover that people overlook the irregular expenses when planning for retirement on their own.   And it is the irregular expenses that can derail a retirement plan, and cause stress and sleepless nights.  The tricky thing of course is trying to see into the future and figure out what possible expenses can occur.

Here is list of some of the potential items that you might consider adding to your retirement plan.  They won’t all pertain to you, but I hope they will get you thinking about what your retirement could look like, and help you plan for your future.

Replacing cars

I often hear people say that they will just use the same car throughout retirement.   And if you do not work with retired people on a regular basis like I do, I can see where you might think that.  When you are pre-retirement age, retirement seems like a phase of life that is a mysterious unknown.  So I ask them how often they replace their car, and I usually hear answers like every 6 years or every 10 years, and everything in between.  A married couple that retires at 65 and drives until 85, replacing cars every 6 years,  will buy 6 cars in retirement.  I wrote a blog about the impact of inflation on car prices in retirement, many people are very surprised when I show them the expected price of the last car they will buy in retirement.

Travel for fun

When I ask people what they want to do when they retire, travel is one of the first things people say.  If you see travel in your future, think about how often, and what type of travel, do some internet searching to get a ball park estimate of the cost that would be involved.

Travel to see the grandkids

Don’t forget about travel to see the grandkids, I mean your adult children.  Who am I kidding?  You are taking a trip to see those adorable grandkids!  If your family is like so many these days, you might have to hop on a plane to feel those little arms wrapped around you.  With Skype, you don’t have to be there to see them anymore.  But no technology can replace an in-person visit.   Trust me; you will want to plan for this expense.

50th Wedding Anniversary Celebration

In this day and age, fifty years of marriage is an especially wonderful milestone.  Some families have a dinner reception, inviting extended family and close friends, which can be the size of a small wedding reception.  I have also seen couples treat families to Disney vacations or to cruises.  If you have dreams of recognizing a milestone with a special celebration, don’t forget to plan for it so that when the time comes, you can relax and enjoy it.

Medicare

What?  It isn’t free?  No, I am sorry to have to tell you, it isn’t.  And I find that I am often the first to break this news to people.   Because if they have never had to help a family member through the process of signing up for Medicare and they are more than a few years away from retirement, then researching “How does Medicare work?” usually hasn’t crossed their mind.   Luckily there are some good resources such as www.medicare.gov and for Missouri residents https://missouriclaim.org/.

Long Term Care/Nursing Care

In 2012 the average annual cost of care in a nursing home in Missouri is approximately $55,000.  The cost of nursing care has been increasing considerably faster than inflation.   One way to offset the risk to your portfolio is to consider Long Term Care insurance that would cover a portion or all of the cost of care, depending on your risk tolerance and the affordability of the premium.  I am a fee-only advisor so I do not offer insurance products, but I have recommended that some clients get Long Term Care insurance.  Other clients have been able to self-insure, each situation is different.  But you do need to consider the impact a stay would have on your portfolio.  To learn more read my blog post Long Term Care Insurance: Protect your nest egg.

Big delayed purchases

Have you been dreaming of a cross country trip in a motor home?  Or does the water call your name so a boat is more to your liking?  Don’t forget to set aside some money for upkeep and repairs.

Home Improvements and Major Maintenance

If you are in your forever home, factoring in the large inevitable maintenance projects such as replacing a roof or HVAC system will help prevent money stress later on down the road.  Also, after a few decades, kitchens and baths tend to need updates.  Remodels with an eye toward aging gracefully in place are also becoming quite popular.  Consider the age of your home and prior remodels when planning future income needs.

College and Wedding/Rehearsal Dinner

Depending on the age of your children, you may have college and wedding/rehearsal dinner expenses in retirement.

Care for a Family Member

Will a loved one be financially dependent upon you, such as a parent or a special needs child?  If so, you might consider meeting with an elder care attorney or estate planning attorney that specializes in special needs trusts.

These are a few areas to consider in addition to everyday living expenses when you are creating your retirement plan.

 

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