The Five Critical Puzzle Pieces of Your Retirement Plan – Part 2*

In Part 1 of The Five Critical Puzzle Pieces of Your Retirement Plan (here), we detailed how putting your retirement plan together is like fitting together or coordinating the pieces of a puzzle…some of which are constantly changing. We looked at the first of the five puzzle pieces, the Income Plan. In this post, we’ll explore the other four pieces.

By way of refresher, the five pieces to any retirement plan puzzle are:

  • The Income Plan
  • The Investment Plan
  • The Tax Plan
  • The Health / Life Insurance Plan
  • The Estate Plan

Let’s look first at the investment plan. After all, that funds your income plan.


In retirement, most people care far more about the return OF their money than the return ON it. That is, the only risk they care about is the risk of loss that could affect their income. Yes, return is needed in some capacity, but it’s not typically the driver it was during the working years.

With that in mind, once the plan need for current and future income has been established, you can go about the work of removing as many unknowns as possible. Using the income plan as the template in which to drop in an investment strategy can be very liberating. For most of my career, the coordination of these eluded me, forcing me to stick with traditional, stale strategies. By redefining the target – away from rate of return dependence alone– it allows us to think and proceed with much greater specific intent in our selection of solutions for income and inflation.


Do you think taxes are going to increase or decrease over the next twenty years? I certainly don’t pretend to have a crystal ball, but I’d say the current state of financial affairs in the U.S. are going to play a large role in the determination to raise taxes. We are at historic lows in rates now.

So why would someone retiring in a few years choose to ‘max out’ current 401k contributions today? You may find yourself withdrawing that for living expenses at the price of a much higher tax. From another perspective, what are you doing today to maximize the tax efficiency of the income you’ll need to live on after you retire?


How will you protect your savings for your spouse and heirs from a myriad of risks? Although important, the goal is not simply the legal avoidance of giving your money to the government. Think of it more in terms of providing efficiency of transfer and post-death benefits to your family. Simple things like titling accounts properly and naming beneficiaries correctly can go a long way toward efficiency.


Have you carefully considered the potential costs of retirement medical expenses and come to conclusions about how YOU are going to deal with them? If you retire early, what will you do about health insurance prior to Medicare? What about a potential nursing home stay (Long-Term Care); how’s that going to get handled? If self-insuring LTC, how does this affect your spouse and your existing income plan (among other areas)? Do you really need life insurance and what about non-traditional uses of it to mitigate other risks?

If you are working with advisors who are regularly engaging you in conversations that lead to action steps in each of these previous areas, then you’ve truly found a real advisor. Absent of that leadership, you’re probably making purchase decisions – not financial plans.

If you don’t have a retirement plan, it’s never too late to start. Contact us today and let us help you discover clear direction for your retirement future. We’ll provide a FREE analysis of where you currently stand against your goals and provide important recommendations for getting all the pieces of your retirement puzzle to fit together!

*Tax and Legal Disclaimer: Wootton Financial Group does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstances.

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