So you are taking the lump sum payment as your retirement option from your employer, but what do you do next? At 80/20 Financial, we can walk you through this process because we've actually done it ourselves. If you work with us, this will be a summary of the process.
1.) We will open up an Individual Retirement Account, aka an IRA, in your name as soon as possible and have your lump sum transferred directly to your new IRA. The sooner we can set up your IRA the quicker we can get your lump sum transferred to your new IRA. We will complete all the paperwork for you and make this transition as painless as possible. We will review and designate beneficiaries at this time also.
2.) We will review your Retirement Income Plan to make sure we have every i dotted and every t crossed. Things may have changed since we first met and reviewed your plan. This is when we will make any necessary changes.
3.) We will distribute your IRA funds as discussed in your Retirement Income Plan. This is where your 4 bucket strategy approach will come to life. The 4 buckets will consist of your cash bucket, short term bucket, medium term bucket and long term bucket. The strategies in each bucket will vary according to your risk tolerance.
4.) We will set up your withdrawal schedule aka show me the money. If you will be taking distributions immediately, we will set those up biweekly or monthly based on your preference. If you will be taking distributions at a later date will discuss that also.
5.) We will discuss taxes and strategies to keep them as low as possible. Side note: No one wants to pay anymore than their fair share of taxes. That is our goal here. We will pay our fair share, but set up a strategy where we don't pay anymore than we have to.
Once the initial plan is set up, we will meet quarterly beginning the first year just to see how things are going and if we need to make any adjustments. After that first year we will back the scheduled meetings down to to twice per year. Ideally, we would meet the first few weeks of November and the first few weeks of May each year.
The meeting at the beginning of November gets us close to the end of the year so we con make any last minute tax adjustments if necessary and we want this done before the "Holidays" begin because we all know how fast time goes once the "Holiday Season" begins. We will also set our strategy for the following year at this time.
The meeting in May gets us a mid year type checkup before Summer takes full swing mode. We will address any concerns and make any necessary changes in the plan depending on what life has thrown at us up to that point.
At 80/20 Financial we expect life to change and we design your plan to change right along with it. We design these plans initially with safety, security and flexibility in mind. We want your money safe and secure but we also need it to be flexible so the plan can adapt when life does throw us that inevitable "curve ball." That's what sets our process apart. We plan for the possible in good times and bad times.
The greatest enemy of a good plan is the pursuit of a perfect plan. The perfect plan doesn't exist. In a partnership with you, we will start with a good plan and make better every day.
Contact us today, if you think we could work together.
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Thanks for reading,