Police and Firefighters - Guns and Hoses Retirement Guide
Deferred Compensation Contributions
Why You Need a Health Care Power of Attorney
While you're at it, get a Financial Power of Attorney
Where there’s a Will, there’s a way
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Guns & Hoses PDF to access forms and checklists to help with your retirement planning.
Life’s Seven Big Objectives
In financial planning, we find most people have a set of objectives during their lifetimes. Good planning allows us to accomplish some or all of these objectives. See if any of these apply to you:
- RETIRE: Most of us would like to retire and live comfortably until we die. We use a little different version of ‘replacement ratio’. Our version of comfortable retirement is to have 100% of your current net after-tax income, with inflation, forever. So if you make $120,000 and live on $80,000, we’d like you to be able to have $80,000 a year, with inflation, into perpetuity.
- COLLEGE: Most of us would like our kids or grandkids to have good jobs and move out of the house. In today’s world, a college degree is very important and a graduate degree is considered mandatory for many positions. There are vastly different ways to save and provide for education, many with tax advantages.
- CASH: Most of us would like to have enough cash (we mean money markets or bank accounts, not greenbacks) to weather most financial storms, without hitting credit cards or lines of credit. We suggest setting a nest-egg goal of three month’s expenses in a money market fund. If the fund gets too big, invest the overage. Too small, fill up the cup.
- DEBT: Don’t have any. We live in a world where the average American’s 401(k) balance is less than their credit card balance. Get rid of debt, the worst debt first, like credit card balances (you can have a credit card, just not a credit card balance), move onto the rest, up to and including the mortgage. Getting rid of debt is the same as making an investment…except it’s riskless.
- HEALTH: Stay healthy and afford good health care. Health care is getting more and more expensive and it’s becoming unclear who will pay for it. First, stay healthy: eat right, exercise and take care of yourself. Second, have a side fund of money to pay for the extra cost of health care in retirement. You may need it.
- LONG TERM CARE: Be able to live in old age with dignity and without being a burden on others. Health care is one thing, but there’s a possibility you may need help with other daily activities of life. Look into having enough capital to cover your long term care needs, or insure the prospective cost.
- ESTATE: Most of us would like to leave our money to people or places we like, not lawyers, son-in-laws, or the government. Get your beneficiary designations straight, get a Durable Power of Attorney, get a Medical Power of Attorney, get a Will, and consider a Trust. The only time we really need an estate plan is when you can’t do one.
Do any of these objectives sound like something you want to do? Set your goals and make a plan of action. This book will provide a good starting point for you. If you want some professional help, give us a call.