Live the Dream

The investment goal while you are living the dream is to grow your income so you can keep pace with inflation. Rodgers & Associates helps you keep up by using to the 4% rule for prudent withdrawals as a guide. An industry study¹ found that an investment portfolio with the proper asset allocation may be able to sustain annual withdrawals of 4% and keep pace with inflation. We develop an investment policy for each client and then monitor their portfolio and withdrawals to verify the allocation is properly maintained and withdrawals are not excessive. Our regular portfolio review for each client provides confi­dence that their investment strategy is working and stays on track to reach their goals.

Did you know that Social Security can be taxable based on your income? Or that Medicare premiums are deter­mined by your Modified Adjusted Gross Income? Our tax-efficient approach to retirement planning, the New Three-Legged Stool™ strategy, is designed to minimize taxes and Medicare premiums. Part of each quarterly review is devoted to minimizing taxes by analyzing the best place to draw income for each client’s situation. A 2019 study² evaluated the impact of tax-efficient distri­b­u­tions on the sustain­ability of withdrawals and found the most tax-efficient sequence could extend the portfolio seven and a half years longer than the least tax-efficient sequence!

Many seniors rely on Medicare to provide their health insurance coverage. We educate our clients about healthcare coverage options because Medicare does not cover every­thing. There may be reasons a client should choose a Medicare Advantage plan over tradi­tional Medicare. We help our clients work through the pros and cons so that they can make a choice for their unique situation.  Choosing the right one can be compli­cated and each November, the selection must be reeval­uated during open enrollment.

When should you draw Social Security benefits? Should your spouse draw first? These are questions we help clients answer to get the most from this important government program. The Social Security website contains more than 2,700 separate rules governing when benefits can be claimed and how. It is important our clients get this right the first time. We feel a financial strategy should consider other income sources, taxes and potential health issues to determine the optimum time for each client to sign up for benefits.

One of the biggest financial challenges facing seniors is the fact that many people will need some form of living assis­tance in their final years, often referred to as long-term care (LTC). We work through the important issues concerning the potential need for LTC and help our clients evaluate the best way to guard against this risk. Our advisers stay up-to-date on the cost of LTC. We run a financial analysis to determine whether a client may be able to cover these costs out of their income and assets. Then a comparison is done among other options such as private insurance, and retirement commu­nities with assisted living. If our clients are consid­ering a retirement community, we can help them determine the best contract option for their situation. There is no simple solution to deter­mining a long-term care strategy. However, more options are typically available to those who start planning early while they are still healthy.