Our Process

The Retirement Blueprint

Are you guesstimating your future self? Conventional financial planning software and “free” online tools use the replacement rate method based on outdated, generic rules of thumb. This simplistic method guesstimates targets for spending and saving. These targets are the basis for your whole financial plan. If they are wrong—too high or too low—the mistakes could compound over time and leave you in trouble.

We don’t believe in guesswork. We have a smarter approach.

We created the Retirement Blueprint to give our clients a simple but effective guideline to follow towards retirement that we believe gives them the highest chance of success.

Step 1: Sustainable Spending Plan

It’s virtually impossible to find your household’s highest sustainable spending level. Income and expenses change every year, and no financial decision stands alone: income affects taxes, taxes affect spending, Social Security benefits and retirement account withdrawals affect income, which affects taxes, and on and on.

The Retirement Blueprint makes it possible. It can correctly calculate the highest spending level your household’s income and assets can support and provide a plan to sustain and protect it for life. Our specialized software considers your particular variables and generates plans that work best for your situation.

Step 2: Retirement Income Plan

Believe it or not, there was a time in this country when people could retire gracefully and worry-free. Their employer would hold a little going-away party, present them with a shiny gold watch, and give them a guaranteed paycheck for life in the form of a nice pension to keep them comfortable during retirement and allow them to live happily ever after – just like the fairy tales of old. This, unfortunately, is no longer the case. It is more than likely that upon retiring, people will not receive a pension.

The first step in developing a successful income plan for retirement is understanding your options.

How we fund and live in retirement has fundamentally changed. Too often the retirement planning conversation focuses on accumulation – growing the pool of savings to have a larger pool to “draw down” in retirement. But this model forgets one important fact: the need for regular, reliable money income that you can budget on that doesn’t go away when you retire. At a time when people are living longer and facing risks to their savings, having a monthly income that is protected for life can be a vital part of your income planning in retirement.

Blue Monarch provides help in calculating your expected monthly income in retirement. We provide help calculating your accumulated savings so you can have an idea of how much income you can generate and how long that might last. Together, we will not forget to reflect on future issues, such as rising prices and unforeseen healthcare expenses. After looking at the numbers for all that, we outline the income you’ll need in retirement. A calculated expected monthly income based on current investments and other sources of income, like Social Security, and identify if there is a gap.

If we find a gap, we will then look at and discuss how much of that income can or should be protected or shielded from potential changes due to market downturns.

Step 3: Plan for Living With Health Issues

American’s average life expectancy is higher than it’s ever been and is still on the rise. For those in or approaching retirement, life expectancy looks very different even from what it used to 60 years ago. For example, in 1960, men aged 65 could expect to live another 13 years and women of the same age could expect to live another 16 years1. Today, those aged 65 can expect to live on average another 19 to 22 years, with a quarter of 65-year-olds expected to hit age 90, and 4 in 10 living past 95.

Overall, this is great news! But it isn’t without some concern. Now, the issue is finding a way to financially prepare.

Americans now face a much more complex retirement climate than their parents, with pensions all but extinct and more decisions to make about how income will flow in retirement. Some retirees may choose to take a “DIY” approach and choose firsthand how much money to contribute, which investment options to go with, and even how much to withdraw every year, but the potential margin of error here is high.

With more time in retirement, more expenses can be expected. Even a few extra years can become a financial burden if you don’t have the proper income plan to provide for you. Outside of housing, utilities, and other basic necessities, retirees can expect to need income sufficient to fund additional expenses like traveling, hobbies, giving to charities, and more.

Healthcare costs can also make a huge dent in your retirement income plan. Many health conditions can come unexpectedly and can take the harshest toll on your wallet. Studies suggest that the average healthy 65-year-old couple retiring this year will spend on average $315,000 in health-related expenses in retirement3.

1.Table 15. Life expectancy at birth, at age 65, and at age 75, by sex, race, and Hispanic origin: United States, selected years 1900–2016 (cdc.gov)

2. Health status – Life expectancy at 65 – OECD Data

3. Americans can expect to pay a lot more for medical care in retirement (cnbc.com)

Step 4: Understand Your Relationship With the IRS

Many considerations come into play as you financially prepare for your future. Chief among them, we believe, are three core considerations that form the foundation of your retirement income strategy. In our practice, we use these core considerations to evaluate your retirement income approach, and help you create a strategy that balances these important needs- while understanding the retirement relationship with the Internal Revenue Service you will have.

Risk Assessment of your Assets

You need to balance growth and stability as you grow your retirement funds, without assuming excessive risk to do it. Your retirement assets should embrace an appropriate amount of risk for your financial confidence and risk tolerance.

One key reason you’re accumulating funds? So you can enjoy an income level to support the retirement lifestyle you desire. Your retirement income strategy should help maximize the amount of income you can access in retirement.

Taxation of Your Retirement Assets

It’s important to make informed decisions about the tax status of your retirement assets, and to consider tax diversification within your retirement income strategy. When evaluating your potential retirement income, you’ll want to analyze the after-tax amount you’ll receive, which is the portion of your retirement funds you get to spend.

Taxes are an important topic when it comes to your retirement. After all, the more you pay in taxes, the less income you’ll have to spend.

Step 5: Estate Planning

The end of 2025, when a generous estate and gift tax break for the wealthy is set to expire, seems far off, but those looking to take advantage may be in poor shape if they delay action.

“There are a lot of people who want to kick the can down the road and say, ‘Well, why don’t we wait until the end of 2024 or 2025 and see how things are looking?'” said Brigette Engstrom, Chief Executive Officer and family income strategist.

For individual Americans, it’s currently possible to pass on up to a lifetime maximum of $12.92 million without paying tax, and that amount is doubled for married couples. At the beginning of 2026, those gift and estate tax exemption ceilings will be halved, falling back to their 2017 levels of around $5 million per individual, plus adjustments for inflation. In the meantime, the extra tax-free cushion could make a huge difference in the fortunes of families who can afford to build it by placing the exempt amounts into trusts.

“But waiting until late 2025 could be a big mistake,” Engstrom said, “given how estate planning lawyers and advisors will likely have their hands full by then helping lots of other wealthy procrastinators. Many people are setting up trusts right now. Really proactive clients that can afford to do so are making gifts right now.” There are several options that exist for advisors and estate planning experts to help clients prepare for the future. Regardless of which one a client decides to use, there are big dollars at stake if the deadline is missed.

Estates in excess of the lifetime limits “face a 40% tax on the amount above the levels. Also, after the end of 2025, federal individual tax rates, now at 37%, will rise to 39.6%.”

Industry experts are clearly lighting the path on how we can help clients make use of the next 2.5 years so they can actually ride into that sunset and not be blinded by it.

We’ll work alongside skilled attorneys with experience in living wills, trusts, powers of attorney, and other estate planning documents to help ensure your legacy is transferred to who you want and at the right time.

We can’t wait to meet you!

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