Financial Planning for Retirement | Capital Planning Associates

Financial Services

One stop. Many options.

Preparing for retirement should create excitement, not concern. Yet for many, that’s not necessarily the case.

According to a recent study, 64% of pre-retirees do not have a plan for how much money they will spend each year in retirement and where that money will come from.¹ Additionally, more than two-thirds of Americans (67%) say the nation faces a retirement crisis. More than half (56%) are concerned that they won’t be able to achieve a financially secure retirement.²

That’s where we come in.

We use insurance products, such as fixed annuities, and a variety of investment products to help you build financial strategies. From tax-efficient strategies to investment advice to protecting some of your assets — we’ll cover as many bases as possible to help you create a strategy that supports your retirement lifestyle and long-term financial goals.

Once we understand your financial situation, risk tolerance and investment objectives, we can help you decide which types of products and services fit within your financial strategy.

¹ Greenwald Research. SOA Research Institute. February 2022. “2021 Retirement Risk Survey.” https://www.soa.org/48fd8a/globalassets/assets/files/resources/research-report/2021/risks-retirement-findings.pdf/ Accessed Sept. 30, 2022.

² Tyler Bond, Dan Doonan and Kelly Kenneally. National Institute on Retirement Security. February 2021. “Retirement Insecurity 2021: Americans’ Views of Retirement.” https://www.nirsonline.org/wp-content/uploads/2021/02/FINAL-Retirement-Insecurity-2021-.pdf. Accessed Sept. 30, 2022.

At Capital Planning Associates, we can offer you the following products and services:

(Click the images below to learn more about each service)

Retirement Income Strategies

Life expectancy in the United States continues to be around all-time high levels.¹ While that’s great news, one drawback to a longer life is the greater possibility of outliving your savings. In fact, in one study, 40% of Americans surveyed said they fear retirement more than death.²

¹ Elizabeth Arias, Betzaida Tejada-Vera, Kenneth Kochanek and Farida Ahmad. National Vital Statistics System. Aug. 2022. “Provisional Life Expectancy Estimates for 2021.” https://www.cdc.gov/nchs/data/vsrr/vsrr023.pdf. Accessed Sept. 30, 2022.

² Gabrielle Olya. Yahoo via GoBankingRates. Aug. 1, 2021. “40% of Americans Fear Retirement More Than Death — Here’s Why.” https://www.yahoo.com/video/40-americans-fear-retirement-more-220049051.html#:~:text=Retirement%20Is%20a%20Scary%20Prospect,gap%20when%20comparing%20age%20groups. Accessed Sept. 30, 2022.

Wealth Management & Investments

Wealth Management

Generally speaking, the longer you invest the more potential your money has to grow. If you are still trying to recover from losses in recent years and you’re looking to get back on track to accumulating wealth, you may want to consider a more aggressive asset allocation with at least a portion of your money. However, those who’ve lost in the stock market may sometimes be a little more wary of approaches that increase their market risks.

If that sounds like you, there are more conservative investment options available that provide the potential for wealth accumulation. Using these investment options in conjunction with insurance contracts such as annuities can help you design a more conservative retirement strategy. After all, the last thing you want to do in retirement is lose more ground during another market correction.

Investments

You worked hard for your assets. Now they can work for you.

Inflation, unexpected expenses, once-in-a-lifetime travel opportunities… Predicting the unpredictable is impossible. That’s why it may be prudent to have a certain amount of your nest egg in investment products.

Investing involves risk, and there are no ways to guarantee that you won’t lose money, but having a certain portion of your assets in the market gives you the opportunity to build on your existing wealth. Over time, that growth potential could help you offset the effects of inflation and other factors that erode the purchasing power of your assets — assets you may be counting on to see you to and through retirement.

From stocks and bonds to mutual funds and retirement accounts, we welcome the opportunity to help you figure out where investment products might fit in your overall financial strategy.

Asset Protection

You’ve got plans — a lot of them. Wouldn’t it be more fun to focus on your dreams than constantly worry about what the market’s doing?

Diversifying your retirement assets among a variety of vehicles — including a mix of both insurance products and investments, depending on what is appropriate for your situation — may offer you the best chance of meeting your retirement income goals.

Anyone who invests in the market should understand it involves the potential risk of principal. So, to provide some security not found in the stock market, you may want to include some insurance products in your financial strategy. These products, such as annuities, can provide supplemental income throughout retirement and protect your money from declines due to stock market losses.

Annuities

Today’s retirees have a greater responsibility for saving for their own retirement than in the past. State and local government pension plans are typically underfunded, cutting back on benefits and raising employee contributions.¹ In the private sector, only 15% of private industry workers had access to a defined benefit retirement plan from their employer in 2020.²

¹ Pew. Sept. 14, 2021. “The State Pension Funding Gap: Plans Have Stabilized in Wake of Pandemic.” https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2021/09/the-state-pension-funding-gap-plans-have-stabilized-in-wake-of-pandemic. Accessed Sept. 30, 2022.

² U.S. Bureau of Labor Statistics. March 1, 2021. “67 percent of private industry workers had access to retirement plans in 2020.” https://www.bls.gov/opub/ted/2021/67-percent-of-private-industry-workers-had-access-to-retirement-plans-in-2020.htm. Accessed Sept. 30, 2022.

Life Insurance

If helping loved ones maintain a standard of living and avoid financial hardships after your passing is a priority for you, life insurance products can help. A general rule is that you may want to seek coverage between five and seven times your gross annual income. As far as the various types of policies go, they can generally be placed into one of two categories: term and permanent.

Term insurance generally provides coverage for a specified period of time and pays out a specified amount of coverage to your beneficiaries only if you die within that time period. A permanent insurance policy, on the other hand, will stay permanently in effect for the rest of your life, as long as premiums continue to be paid.

Tax-Efficient Strategies

Rising taxes may be a concern for anyone — especially for individuals approaching retirement. Having a solid strategy in place for how you will pay taxes on your retirement income can be an important component to living on a fixed income and avoiding surprises come tax time.

Investing in or purchasing a tax-deferred vehicle means your money can compound interest for years, without paying current income taxes, potentially allowing it to earn interest at a faster rate. Tax-deferred vehicles only allow you to defer paying income taxes until the money is withdrawn — presumably during retirement when you may be in a lower tax bracket. However, few financial vehicles avoid taxes altogether.

Because tax-deferred vehicles are generally designed to help individuals work toward specific long-term goals, there may be restrictions on when money can be withdrawn without penalty. Early withdrawals may be subject to charges and fees. Withdrawals prior to age 59 ½ may be subject to an additional 10 percent federal tax.

Our firm is not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. You should consult a legal or tax professional on any such matters.

Long-Term Care Strategies

As the oldest baby boomers begin to wind through their 70s, one of the biggest concerns may not be outliving income, but outliving good health. For retirees, home health care can cost around $60,000 or more per year¹ and nursing home care can run as high as $108,000 per year.² Does your retirement income strategy account for this kind of possibility? Would you be prepared for twice that amount as a married couple?

^1,2 Genworth. “Cost of Care Survey 2021.” https://www.genworth.com/aging-and-you/finances/cost-of-care.html. Accessed Sept. 30, 2022.

Ira & 401(k) Rollovers

When you change jobs or retire, there are four things you can generally do with the assets in any employer-sponsored retirement plan:

Leave the money where it is.
Take the cash (and pay income taxes and perhaps a 10 percent additional federal tax if you are younger than age 59½).
Transfer the money to another employer plan (if the new plan allows).
Roll the money over into an IRA.

Rolling over from one qualified plan to another qualified plan allows your money to continue growing tax-deferred until you receive distributions in retirement. We can help you determine if a rollover is the right move for you.

Ira Legacy Planning

IRA accounts have become one of the largest types of assets inherited by loved ones. If you don’t anticipate needing your IRA money in retirement, you may wish to consider a legacy planning strategy that potentially reduces taxes and increases the payout your beneficiaries will receive upon your death.

You may want to use some of the value in your IRA to provide your beneficiaries with a regular stream of income while leaving the balance of IRA assets invested for tax-deferred growth. The result may yield substantially more money paid out over the course of your beneficiaries’ lifetimes.

We can help you evaluate your financial situation to determine if IRA legacy planning could help you, and we can work with attorneys and tax professionals to help you meet your goal of structuring a long-lasting inheritance for your loved ones.