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LEGACY INSIGHTS

Legacy Benefit Advisors’ Quarterly Newsletter

2024 • Quarter 4 • Issue 12

 
 

Robert Dumais

Principal, LBA

 
 

FROM THE DESK OF BOB DUMAIS:

Dear Robert,


LBA is trying a new format with our quarterly newsletter and we're calling it "Legacy Insights". We plan to only focus on one topic in each issue. We hope this will offer more depth and clarity as we tackle the various issues we all face in the retirement planning process.


As we welcome the season of Autumn, this issue has one goal - to help you answer the question:

"How can I be sure I'm taking the rights step to achieve the retirement I’ve dreamed of?"


This question can be intimidating at best, but the advisors at LBA have done this many times before and are here to support you every step of the way.


Warm regards,


Bob Dumais

Principal, Legacy Benefit Advisors

 
 

IMPORTANT REMINDER

Before we dig in, this is a reminder that October 15th marks the beginning of Medicare open enrollment season, which runs through December 7th. It is a time when you can review your Medicare selections and make changes (limitations may apply).

"One size does not fit all!"

Choosing the right Medicare plan is crucial for your health and financial security. Keep in mind that your Medicare choice is not "one and done". Changes in your health, lifestyle, or budget may suggest that you revisit your selection on a regular basis to see that it is still the best fit for you moving forward.


ALERT: Beginning in 2025 there will be a number of changes to the prescription drug component of Medicare, Part D. We strongly suggest that you contact one of the LBA’s advisers to discuss the changes that are coming, and to discuss how you can maximize your benefit. Upcoming changes look to be positive from a coverage perspective, but we are anxious to see how premiums will be impacted.


At LBA, we are dedicated to helping you make the best Medicare choice for your unique situation, and we offer annual reviews at no cost. Our team is here to provide personalized advice and support.

 
 
 

MASTERING THE ART OF RETIREMENT

It’s all about "WHAT"!

What is the purpose of Retirement Planning?

What is so important about retirement planning?

Retirement planning is crucial as a foundation for financial security and peace of mind. Without a solid plan, you risk running out of money, facing unexpected healthcare costs, or not being able to maintain your desired lifestyle.

By planning ahead, you can:

  • Ensure that you have enough savings
  • Maximize Benefits like Social Security and Medicare
  • Make informed decisions about investments and debt management

Ultimately, effective retirement planning with the support of the team at LBA will empower you to enjoy your retirement years with confidence.



What are the Benefits of starting retirement planning early? 

Early planning offers significant advantages, including the power of compound interest, which can greatly increase your savings over time. 


Early planning allows you to set clear financial goals, adjust your strategy as needed, and take advantage of long-term investment opportunities with higher growth potential. It also provides more time to manage debt, build an emergency fund, and ensure you are adequately prepared for whatever comes your way. 


By starting early, you reduce the stress of last-minute planning and can retire with greater financial security and peace of mind.



What are some common misconceptions about retirement age and savings?


Many people mistakenly believe that they can start saving for retirement later in life and still accumulate enough funds. They underestimate the time and money needed to reach their retirement goals.


Assuming Social Security alone will be sufficient to cover all retirement expenses, can lead to financial shortfalls. 


Some people assume they will be able to work indefinitely, not accounting for health issues or job market changes that could force early retirement. Not considering all variables can result in inadequate savings and financial strain during retirement.


 
 

NOW THAT'S FUNNY

 
 
 
 
 

What are the

7 Key Components

of a Retirement Plan?

1) What are Your Retirement Goals?


What lifestyle do you want in retirement and is it realistic?


Envisioning your retirement lifestyle is the first step toward determining whether it's realistic. Consider how you want to spend your time—whether that means traveling, pursuing hobbies or buying your dream home. Each of these choices carries different financial implications. Assessing your current savings, anticipating income sources, and calculating the longevity of your assets are crucial in determining your future lifestyle.



2) What Medicare Plan is Best for Me?


What are the differences between Medicare parts A, B, C, and D that I need to know about?

  • Choosing the Best Medicare Plan is critically important, and your health, lifestyle and budget are factors that must be considered!

What are the Different Parts of Medicare?

  • Part A: Hospital stays, skilled nursing, hospice, some home health care. 
  • Part B: Outpatient care, doctor visits, preventive services, some home health care. 
  • Part C (Medicare Advantage): An alternative to Original Medicare, these plans often include dental, vision, prescription drug, and other coverages. 
  • Part D: Prescription drug coverage, standalone or included in Medicare Advantage plans. 

What is the right Medicare plan for me? Start by assessing your Healthcare needs. 

  • Current Health: Consider chronic conditions, medications, and doctor visits. 
  • Preferred Providers: Ensure your doctors and hospitals are “in-network”. 
  • Prescription Drugs: Check the formulary of Part D or Medicare Advantage plans. Carriers can make changes from year to year. 
  • Compare Premiums: Monthly payments can significantly vary by plan. 
  • Deductibles and Co-pays: Out-of-pocket costs for services and medications. 
  • Out-of-Pocket Maximum: The most you'll pay in a year, crucial for managing expenses. 
  • Review Additional Benefit: Many Medicare Advantage plans offer extras not covered by original Medicare, such as dental, vision, hearing, and wellness programs. Assess these based on your needs. 
  • Use Available Resources: Legacy Benefit Advisors offers NO COST, Personalized, Unbiased support.


3) What, if Any, Debt Are You Carrying?


What should I do about debt before retiring?

  • High-interest debts, such as credit card balances and personal loans, should be prioritized, as they can quickly erode your retirement savings if left unchecked. Eliminating mortgage debt, if possible, before retirement will allow your retirement income to stretch further. Don’t forget to also consider those unexpected expenses that will certainly arise.


4) What is Your Current Status?


What is your current financial situation, your physical health and lifestyle aspirations?

  • Assessing your current financial situation, physical health, and lifestyle aspirations are critical in creating a realistic and personalized retirement plan. Understanding your finances involves evaluating your income, savings, investments, debts and anticipated expenses, to determine how well positioned you are. 
  • Your physical health can influence both your retirement timeline and healthcare needs. Your aspirations—whether it’s traveling, pursuing hobbies, or relocating —will also impact how much you need to save, and the kind of retirement plan you should create.
  • By taking a holistic view of these factors, you can develop a strategy that aligns with your goals and ensures a fulfilling retirement.


5) What Sustainable Income Sources Do You Have?


What Social Security, Pensions, and other retirement income sources do you have?

  • Social Security, Pensions, and other retirement income sources play a crucial role in providing financial stability. Social Security acts as a foundational source of income, helping to cover basic living expenses, while pensions, for those who have them, can offer a supplemental and steady income stream. 
  • Other sources like 401(k) plans, IRAs, and personal savings provide the flexibility to supplement your income, fund discretionary spending, and achieve your desired lifestyle. These combined income streams create a diversified financial safety net that ensures you can maintain your desired live style. 

What amount of income do you need to retire comfortably?

  • A common rule of thumb is aiming to replace 70-80% of your pre-retirement income, but this can vary significantly based on individual circumstances and retirement goals. Additionally, factoring in inflation and potential changes in spending habits are important considerations to ensure that your retirement income is sufficient.


6) What Age-Appropriate Investment Strategies Have You Considered?


What investment options should you consider? (401(k), IRA, Roth IRA, etc.).

  • It's essential to explore a variety of investment options to build a robust and diversified portfolio. Traditional 401(k) plans and IRAs offer tax-deferred growth, meaning you don't pay taxes on contributions and earnings until you withdraw funds in retirement. These are particularly beneficial if you expect to be in a lower tax bracket later. Roth IRAs, on the other hand, provide tax-free growth and withdrawals, making them an excellent choice if you anticipate higher taxes in retirement. Additionally, you may consider diversifying with investment vehicles such as Annuities to minimize risk while maximizing your returns. Fixed and fixed-indexed annuities are very safe and will typically generate higher returns than other options. Each option has its own advantages, so don’t tread these waters alone. LBA is here to support you every step of the way.


7) What Healthcare Planning Have You Considered?


What Life Insurance Options Have You Planned For?

  • Incorporating life insurance into your retirement strategy can provide a multifaceted financial safety net that extends beyond just securing a death benefit for your loved ones. A well-structured life insurance policy can offer cash value accumulation, which can be accessed as a tax-advantaged source of income during retirement. Additionally, life insurance can be a key tool in estate planning, helping to preserve your wealth for future generations. With LBA’s expert guidance, you can integrate life insurance into your plan, ensuring financial security for your loved ones after you’re gone. 

What is your Plan for Long-Term Care?

  • Statistics show that 70% of adults will require long-term care at some point, and the average stay is 27 months. With current costs nearing $16,000 per month, without a plan your nest egg can be quickly wiped away.
  • Long-term care is a critical component of retirement planning. While long term care insurance may be difficult to secure, many life insurance products and annuities are now available with long-term care riders that can minimize the financial burden.

Effectively planning your retirement process requires a comprehensive approach that should not be taken lightly. The Independent advisors at LBA will help you every step of the way, providing annual reviews to help you address life’s unexpected challenges.


Services are at NO COST to you. Don’t go it alone, mistakes may be irreversible. We are here to help!

 
 
 

NOW THAT'S FUNNY

There are lots of reasons why people retire!

 
 
 

LBA Newsletter Library - A Great Resource

We have covered so many critical topics in our many quarterly newsletters over the past few years. We've created a simple roadmap to all of these great articles for your benefit.

CLICK HERE TO SEE ALL OUR RETIREMENT ARTICLES
 
 
 
LBA consultants aremembers of
OPEIU Local 25
 
Robert Dumais, Principal

275 West Natick Road
Suite 450
Warwick, RI 02886

401-868-1400 (O)
774-991-3369 (M)
401-737-0330 (F)

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