Retirement Planning	Estate Planning	Mutual Funds	Annuities	Long-Term Care Insurance

Retirement Planning
Developing an Effective Strategy

by Glen A. Ladau, CFP®, CPA, CLU

Many people mistakenly believe "making more money" is the only goal of developing a sound financial strategy. While this is a key goal of the strategy, it is not the only goal. An effective strategy addresses three primary areas: Savings, Growth and Protection.

Savings

It is easy to think about saving in the traditional sense - a working family saving a portion of their paycheck each week, putting it away for college or retirement. During retirement, saving still should be a concern, but in a different context. If we can reduce the amount of money we lose each year as a result of inefficiencies in our strategy, this is saving. Tax savings is a great example. We must be careful not to save taxes at the expense of having less money. Anyone can pay less tax by making less money. However, an effective retirement strategy will seek to improve cash flow while minimizing tax.

Growth

Growth is the second important area to address. Once again, it is easy to understand the importance of growth when we think about a young family saving for their children's college education or for retirement. But does a retiree really need to be concerned with growth? Absolutely! Growth is especially important during retirement for a number of reasons. First, people are living longer. Many retirees have fifteen, twenty, twenty-five or even thirty years to plan for. According to IRS tables, the joint life expectancy of a couple, both aged 75, is greater than 16 years. This means that at age 75, to ensure not outliving your money, you must plan for even longer than this. Additionally, growth of principal allows for growth of cash flow (or income), ensuring your purchasing power does not diminish as prices of goods increase. If your principal does not grow, you will have less and less purchasing power as prices increase. Even at a modest inflation rate, prices go up.

Protection

Protection is the third important area to address in developing a financial strategy. What good is accumulating assets and having them grow if we ignore the fact that we could lose them at the snap of our fingers. Protection can take many forms. Most of us own homeowners insurance, auto insurance and/or health insurance to protect our assets. Although homeowners insurance does not protect our homes from being damaged in a storm, it does provide us with the funds necessary to replace or repair our home should we need to. Certainly, health insurance does not protect us from getting sick. Yet it does provide us with the money needed to pay for medical care, should we need it. Long-term care insurance is a form of protection often overlooked. Although it will not protect us from needing care, it can protect our assets from being depleted if we need to pay for care.

Estate Planning is another important form of protection. Currently, up to 55% of our estate may be used to pay estate tax, leaving only 45% for our beneficiaries. Proper estate planning can improve this percentage. Depending upon the size of your estate, you may not completely eliminate estate tax but you can minimize it.

Although these three areas are important features of any financial strategy, the most important feature is that it must allow you to meet your goals and objectives in the most efficient and effective manner. You should work with a Certified Financial Planner who helps you evaluate your current financial situation and takes the time to learn your objectives. Your advisor can make recommendations on how to save, how your money can continue to grow and work for you during retirement, how to protect your assets and how to leave more to your heirs and less to the IRS.

Glen Ladau, President of The Matrix Financial Group, is a graduate of the Wharton School of Finance, a Certified Financial Planner, Certified Public Accountant and Chartered Life Underwriter. As registered securities representatives and licensed life and health insurance agents, Glen and the team of professionals at The Matrix Financial Group are dedicated to helping our clients maximize their financial potential.

If you are retired or thinking about retiring soon and would like to discuss your goals and options, call Glen Ladau at The Matrix Financial Group

The Matrix Financial Group

7284 W Palmetto Park Rd
Boca Raton, FL 33433

Suite 206

Boca Raton (561) 394-3040
Broward (954) 797-0002
Palm Beach (561) 296-0740
Toll Free (888) 356-3900
www.matrixsouthflorida.com
glen@matrixsouthflorida.com

It is important to keep in mind the financial situation of each individual is unique and, therefore, your investment decisions should not be based solely on the concepts and information presented in this article.
Securities Offered Through ValMark Securities, Inc. Member FINRA (http://www.FINRA.org), SIPC
Investment Advisory Services Offered Through ValMark Advisers, Inc. a SEC Registered Investment Advisor
The Matrix Financial Group is a separate entity from ValMark Securities, Inc. and ValMark Advisers, Inc.