What's the best way to create a retirement income plan?
According to Michael Lonier, RMA, of Lonier Financial Advisory, it requires a four-step process that is based on the Investments & Wealth Institute's Retirement Management Advisor certification.
The first step in the process is information gathering that uncovers, among other things, goals, and priorities.
The second step requires crunching numbers, including anticipated income and expenses in retirement and creating a household balance sheet. The household balance sheet reflects the present value of anticipated income in retirement and anticipated expenses.
This step also involves identifying a tax-efficient withdrawal strategy, optimizing Social Security, and selecting the appropriate Medicare plans.
The third step involves implementing the plan using what some would call a retirement policy statement. It involved making sure assets are allocated in the right risk-management techniques and those assets are located in the right accounts. It also requires establishing spending and reserves accounts for everyday spending and emergencies.
The last step? Monitoring the plan. This typically entails monthly tracking and adjustments of the risk management allocations, as well as current income and expenses.