Keen On Retirement

Are Joe Namath and William Shatner giving you the best possible advice about Medicare? During the Medicare Open Enrollment period last fall, you probably saw TV ads for companies selling Medicare Advantage Plans featuring these and other senior celebrities. That's because, under most circumstances, the Open Enrollment period is the one time per year that seniors can change their Medicare coverage. And, in recent years, Medicare Advantage Plans have become a popular way for seniors to cover more of their health care needs. However, rising costs are causing many insurance companies to change, and in some cases, stop offering Advantage Plans. On today's show, we discuss how potential changes could affect the healthcare piece of your comprehensive financial plan.

While inflation has generally improved in the past year or so, folks are still paying more for goods and services than they're used to. From a financial planning perspective, this short-term experience of above-average inflation has some valuable long-term lessons for seniors: throughout the course of your retirement, you should plan to cover rising prices every year as you're living off a relatively fixed income. The Federal Reserve tries to maintain an inflation rate increase of 2% per year, which it believes translates to a more stable economy. And even in years when inflation rates are below that target, modest upticks in costs will continue to compound and grow year over year. Let's take a look at how inflation typically affects three top-line retirement spending categories and how comprehensive financial planning can give seniors the resources they need to adjust to rising costs.

Most soon-to-be retirees have a broad understanding of the differences between living off their assets and living off a monthly paycheck. But making that switch and adjusting to new spending habits can be more complicated than you might think, especially if you aren't prepared for the rules around withdrawing from your retirement accounts and how your relationship to your money might change. In his most recent webinar, Matt Wilson, CFP® Chief Investment Officer and President at Keen Wealth explained the importance of making a plan for your retirement spending before you actually retire. Today's episode touches on some of the topics that Matt's webinar covered in depth, as well as important follow-up questions we received about budgeting, required minimum distributions, and managing the psychological and emotional challenges of retirement.

As a retiree, you might be done cashing a regular paycheck. But, as far as the IRS is concerned, you probably aren't done earning income or, in most cases, paying taxes. In fact, without precise planning around how and when you start tapping into your nest egg, you could open yourself up to higher tax liabilities in retirement than you had when you were working full time. Here's a very basic example of a retirement withdrawal strategy checklist that we use at Keen Wealth to help retirees minimize their taxes and maximize their resources for living a full and rewarding retirement.

The power of the human spirit. Resilience. Forgiveness. Advocacy. Redemption. Character. Faith. These are just some of the words that came to mind when I reflected on our guest today, Stephany Bening, and the incredible story that she shares on this episode. Stephany and her children suffered a wrenching loss. But, guided by her faith, Stephany was able to turn that experience into a force for good that, hopefully, will make Missouri a lot safer and a little kinder for years to come.

Are you planning to spend more money or less money once you retire? Many retirees would answer, "About the same," and that makes sense. Folks figure that what they end up saving in professional expenses (commuting, meals, work clothes) and childcare, they'll shift over to things like taking vacations, joining their local country club, and some quality-of-life upgrades around the house. Sure, inflation will drive up the cost of some goods and services by a percent or two every year. But most seniors aren't looking for a lifestyle upgrade in retirement, and they want to avoid any serious downgrades. Maintaining the status quo, with a few well-earned splurges here and there, sounds like a dream. Financial professionals and economists used to assume consistent spending was, more or less, a likely retirement scenario as well. But decades of research and analysis have uncovered a "retirement consumption puzzle." Most new retirees actually spend less money than they did while they were working. Retiree spending rates then continue to decline throughout retirement, even as inflation keeps pushing consumer prices upwards. Let's break down the retirement consumption puzzle piece by piece and explore how Keen Wealth's comprehensive planning process can help folks assemble a reliable retirement spending plan.