In Perspectives

At Legacy Trust, we have been contemplating the retirement planning advice that we have provided clients over the years.  This reflection has made us proud to have helped so many of our clients plan for their financial future, but it also left us believing the old adage “there is always room for improvement”.  We have always been good at answering the question “does my retiring client have enough money for a comfortable retirement”?  Although this is a VERY important question, having adequate capital is only one piece of the retirement planning puzzle.  It is also imperative that a plan for retirement consider many other risks that can irreparably harm the adequacy of the capital you have built over your working career.  Covering all the issues is not possible in one blog post, so we will summarize the major points in this post and provide additional detail through a series of future posts.

Capital Adequacy – Making sure you have enough financial resources to provide for a long retirement is the starting point of any good retirement plan.  Developing an inventory of your savings and investments, pensions, Social Security and other available resources is a relatively simple starting point.  Understanding your retirement expenses can be more difficult, as they will change over a long-life expectancy.  We believe the best method for determining your retirement expenses is to start with your current expenses and adjust them for the changes you expect in retirement.  Some of the more typical adjustments include reduced retirement savings, fewer work-related expenses and higher medical costs, as examples.  However, everyone will have their own unique circumstances, making “rules of thumb” unreliable at best.

Maximizing Employee Benefits – We all work hard during our careers to build enough financial resources to enjoy a comfortable retirement.  We often take advantage of employee benefit plans that may come with complicated choices when we retire.  Unfortunately, Human Resources professionals are not always able to help you make the best decisions and making the wrong ones can significantly reduce the long-term value of these assets through accelerated income taxes and other factors.  It is important that you find an advisor willing and able to help you understand these benefits and the related choices, to maximize the value you realize from these important retirement resources.

Creating a Tax Efficient Income Plan – Developing a strategy to turn your retirement resources into a “paycheck” can be a tricky endeavor filled with difficult decisions.  Having a thoughtful long-term income plan that coordinates when you liquify each of your retirement resources will reduce the likelihood of capital-diminishing impacts like taxes, penalties and fees.  It will also provide insight into the timing of relying on other resources such as Social Security benefits, pensions and other assets.

Understanding your Social Security Benefits – Social Security benefits are one of the most mis-understood resources available to people in retirement.  In addition to wondering what funding for Social Security benefits will look like in the future, the rules are complicated and confusing.  If you are married, maximizing retirement benefits you must consider each spouse’s circumstances including your earning records, current and anticipated health status, other income, cash needs, and the structure of your available retirement assets.  There is no one correct strategy for taking your Social Security and rules of thumb will often lead you to poor decisions.  Legacy Trust’s retirement planning process is designed to develop a strategy specific to your circumstances.

Understanding your Medicare and Medicare Supplement Choices – Perhaps the only thing more misunderstood than Social Security benefits is Medicare and Medicare supplements.  The rules are complicated and the enrollment deadlines are critical.  Simple missteps can result in life-long financial penalties and misinformed choices can lock you into plans that will ultimately cost you thousands more per year when compared to others that are available.  There are multiple forms of Medicare Supplement plans available and you may only get “one realistic bite at the apple” when determining the best plan for you.  Unfortunately, many choose the plan that is easiest to understand but may not be the best financial choice.  We can help you understand the differences and the deadlines and choose the strategy that is best for you.

Planning for the Challenges of a Long Life Expectancy – It is hard to make the case that you can live too long, but a long life will inevitably put stress on your retirement resources.  Age will increase the likelihood of long-term care expenses and an increased need for assistance in the home.  Unfortunately, many these costs can be very sudden, very large and may not be covered by Medicare and private medical insurance.  Unfortunately, the availability of affordable long-term care insurance is becoming more and more difficult to find.  Therefore, one must carefully consider their options and we can help you do just that.

Structuring Your Retirement Portfolio to Reduce the Impact of Market Volatility – A good investment plan, especially one that carefully considers your cash needs, is perhaps the most important step in retirement planning.  It will balance the income you need in the short term against the growth required to combat inflation over time.  Perhaps most importantly, it will help you to maintain discipline during periods of market disruption, when it is tempting to “throw in the towel”.  It is our job to help you carefully consider all the above factors to develop a thoughtful investment plan, keep you focused on the plan and make on-course corrections as your circumstances change.

The Importance of Effective Estate Planning – It is also important to properly plan for the distribution of your assets when you are done with them, but just as important to plan for a period of incapacity, as well.  Regularly reassessing your estate plan and ensuring that it is consistent with your desires will provide peace of mind throughout your retirement.  Choosing someone to manage the fruits of your life’s work when you cannot is an often forgotten but important task.  Don’t leave it to the state and the courts to decide.

Be on the lookout for the next blog in our Comprehensive Retirement Planning series where we will delve into Capital Adequacy and as always, please do not hesitate to reach out with any questions to a Legacy Trust professional at (616) 454-2852.

Legacy Trust and Your Right to Financial Privacy

At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

Strict security measures – We take the security of information very seriously. We have established security standards and procedures to prevent access to client information. We maintain physical, electronic and procedural safeguards to guard client information.

Limited employee access – We have established procedures to limit employee access to information to only those employees with a business reason for accessing such information. We educate our employees about the importance of confidentiality and client privacy. We take appropriate disciplinary measures to enforce employee responsibilities regarding client information.

Why we collect information – We collect information about you to:

  • accurately identify you;
  • protect and administer your records, accounts and funds;
  • help us design or improve our products and services;
  • understand your financial needs;
  • save you time when you apply for new products and services; offer you quality products and services; and comply with certain laws and regulations;

We collect information – We collect and maintain your personal information so that we can provide investment management and other services to you. The types and categories of information that we collect and maintain about you include:

  • Information we receive from you to open an account or provide investment advice or other services to you (such as your home address, social security number, telephone, financial information and investment objectives).
  • Information that we generate to service your account or from our transactions with you (such as account statements and other financial information).
  • Information on your transactions with nonaffiliated third parties.

We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

  • Disclosures to nonaffiliated companies as permitted by law, including those who help us service your account (such as providing account information to brokers and custodians).
  • Other limited disclosures as permitted by law, for example, required reports to government entities.

We do not share your information with third parties for marketing purposes. We do not sell your information.

Former clients – If you end your relationship with us, we will continue to adhere to the privacy policies and practices described in this notice.


Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

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