Financial Freedom for Your Golden Years

WEALTH MANAGEMENT to help you thrive and live the  fulfilling life you always envisioned.

Aspiring and active retirees may face substantial complexities when it comes to planning for their financial lifestyle success, including:

Future Expenses

Inflation

Market Volatility

Tax Complexity

Longevity Risk

RetireMINT™ is an approach to total financial well-being that recognizes the needs of households living their golden years.

While the broad concept of retirement has evolved significantly over time, RetireMINT™ represents a season of reimagined identity, renewed vitality, and persistent opportunity. This is not an event—it is a fresh new chapter in life that spans years and stages. It is a dynamic journey that promotes personal growth and flourishing.

Moving on from a lifetime of career-focused obligations presents an opportunity to re-evaluate your individual identity and a multitude of possibilities for how to spend your time. There will be ongoing lifestyle choices to consider, many of which carry financial implications.

Should you spend more while healthy? Retire earlier? Support family members? Be more charitable? Go on that extra vacation? Or create a legacy for the next generation? These are common questions and retirees have a need to make these decisions with comfort and confidence.

As a collaborative partner for your financial success and well-being, Affinity Financial can help you balance the pressures of life’s complexities and transitions through proactive awareness and planning. Our primary focus is on helping you make smart choices with your money so you can live the best life possible with the resources you have.

Retiring in MINT condition means Financial Freedom for Your Golden Years

Prosper Through Retirement with These 4 Simple Steps

1. Attain Clarity and SIMPLIFY MONEY
2. Create a Robust ‘RETIREMENT PAYCHECK’
3. Reduce Risk and INVEST WISELY
4. Over Your Lifetime, REDUCE TAXES

Step 1

Attain Clarity & Simplify Money

Where you are today represents a lifetime of work, decisions, and experiences. As you prepare for major upcoming transitions within a work-optional lifestyle, its important to understand your current standing—financially, mentally, and emotionally. This clarity helps guide your personal vision through the RetireMINT™ years.

Simplifying your finances in advance of retirement can help reduce stress and make it easier to manage your money during retirement. Consider your Financial Inventory:

Money coming in (income) vs. Money going out (expenses)

What you own (assets) vs. What you owe (liabilities)

Provision for surviving spouse, Gift to heirs, Philanthropy

Actions You Can Take Now

  • Take inventory of your total assets and liabilities for a snapshot of overall financial health.
  • Consolidate retirement and investment accounts to better track progress and alignment with financial objectives.
  • Map out sources of income streams and assets available during retirement.
  • Maximize tax-efficient savings and growth during the peak earnings years to expand retirement safety and opportunity.
  • Develop a clear debt paydown or outright elimination plan to achieve financial freedom.
  • Build awareness of current spending plan and how expenses may adjust over the retirement transition years.
  • Optimize financials for any gaps between employment and retirement benefits, such as Medicare, Social Security, and pensions.

Crafting Your RetireMINT™ Vision

Retirement is not just a financial decision, but also an emotional one. It can come with a range of emotions, including excitement, fear, uncertainty, and loss. Emotional preparation for this major life transition can be just as important as financial preparation, and there are several things you can do to prepare for success:

  • Consider your post-career identity and what you are retiring towards, such as the revival of enduring passions or the cultivation of new skills. 

  • Envision your ideal day and ideal week,  since retirement offers the gift of doing the things that are most fulfilling and meaningful to you. 

  • Evaluate your social connections by developing interests and relationships outside of work. 

  • Create a plan for actively improving your health span for long-term mental and physical well-being. 

  • Talk to others about their retirement experiences for greater insight into the attributes of those who have and have not retired well.

Visioning Time!

Your ideal retirement will be characterized by your lifestyle aspirations and how your wealth can help you achieve them.  
It’s time to get clear on where you stand:  financially, mentally, and emotionally. These factors will help guide the playbook for your next stages of life. 

Your RetireMINT™Journey

Anticipation

0-10 Years Before Retirement

Optimism and excitement of
freedoms and time; uncertainty of next chapter.

Liberation/ Disorientation

0-2 Years After Retirement

The “Honeymoon” phase where freshly minted retirees explore newfound possibilities.

Reinvention

3-14 Years After Retirement

The heart of retirement with big decisions like:
where to live, daily purpose, & access to things of enjoyment.

Reflection/ Resolution

15+ Years After Retirement

Happiness, contentment, and
enjoyment remain strong; thoughts of legacy and health caregiving increase.

Step 2

Create a Robust ‘Retirement Paycheck’

Global trends have led to an increase in accountability for self-funding retirement. This has led to a greater reliance on retirees’ personal portfolios. The goal is to create a robust, reliable,  and sustainable income stream that you cannot outlive during the retirement years. This is your  ‘Retirement Paycheck.’ 

Common Retirement Income Sources:

Fixed Sources

Lifetime guaranteed income that is  predictable and uniform
• Social Security
• Pensions
• Annuities
• Deferred Compensation

Flexible Sources

Income from controlled asset ownership (dividends,  interest, proceeds from sales).

    1. Non-retirement accounts (Cash checking & savings, Brokerage, Cash value of insurance)
    2. Traditional retirement accounts (401k, 403b, 457, IRA, SEP-IRA, SIMPLE IRA, Employer profit-sharing plans)
    3. Tax-Free retirement accounts (Roth 401k, Roth 403b, Roth IRA, Health Savings Account)
    4. Tangible assets – Real estate (Home, rental properties, land), Collectibles, Precious metals and gems, Vehicles
    5. Business ownership and Passive business income

Human Capital

Income from skills, knowledge, and experiences

    1. Full employment
    2. Part-time employment

Event-Driven Flows

Income or asset transfers, often related to the passing of a loved one

    1. Inheritance
    2. Insurance payout

Fixed vs. Flexible

Fixed Sources decisions (like Social Security or pensions) are typically one-time and irrevocable.

Flexible Sources tend to be more confounding to retirees because of uncertainties (liquidity, taxation, investment returns, inflation, market volatility, timing of spending needs, and total personal life expectancy.

Introducing... Retirement Income Guardrails

The RetireMINT™ approach is to leverage the wisdom of academic research, prudence, and accountability to develop a safe portfolio withdrawal strategy. In practice, this type of  “income guardrails” framework is a dynamic approach that addresses the needs for both structure and flexibility. 

Steps for this collaborative process involve: 

  • Set an initial annual percentage of the portfolio permitted to be withdrawn—the initial rate will be largely dependent on the portfolio investment mix, tax impact, and time horizon.  

  • Establish portfolio value guardrails to define the upper and lower levels that would require a  review for potential withdrawal amount adjustment—such a review could occur due to actual spending needs being above or below anticipated needs, general market volatility, or portfolio outperformance/underperformance. 

  • Within predetermined guardrails, there is flexibility to adjust withdrawals as needed to meet individual life circumstances and maintain inflation-adjusted spending demands. For example, a large or unexpected expense in a given year might draw down a portfolio closer to the lower asset guardrail. Conversely, a year with lower expenses or higher investment returns might push account values toward the higher guardrail. 

Think of the income guardrails approach to retirement spending like driving on a highway.  You have a speed limit that defines the maximum safe speed you can travel without putting yourself at risk. In the same way, the safe withdrawal rate is like the speed limit for your retirement portfolio. It defines the maximum amount you can withdraw each year without putting your financial freedom at risk. 

Just like you might adjust your speed based on traffic conditions or weather, you might need to adjust your retirement spending based on your individual circumstances. That’s where the guardrails come in. They define the upper and lower limits of your spending, like the guardrails on a highway that keep you safely on the road. 

This type of lifetime income stream framework addresses the desire for long-term financial security alongside a yearning to enjoy the golden years with abundant fulfillment.  

Step 3

Invest Wisely

The investment portfolio is a major component of any retirement plan, and it is vital that asset allocation across all accounts are in sync with your personal financial plan. A well-designed investment strategy accommodates your financial obligations today, and your objectives throughout the upcoming decades. Markers of such an investment framework include:

  • Sufficient cash-on-hand to cover withdrawals and emergency reserves, to avoid a need to sell assets at inopportune times. 

  • Adequate long-term market growth potential, primarily through stocks, to combat inflation and ensure you don’t outlive your assets. 

  • Smart global diversification across asset classes and business sectors, in order to smooth out the ride with a mix of assets featuring different risk and return characteristics. 

  • Enough downside protection against inevitable market drops and downturns that will occur periodically. 

  • Alignment with financial tolerance and emotional comfort for price fluctuations and total risk exposure. 

  • A focus on total return with deliberate reduction of investment expenses,  turnover, and taxes. 

  • Periodic rebalancing to mitigate portfolio drift and help ensure that asset allocation remains aligned over time. 

  • A personal commitment to stay disciplined through market swings to unlock better long-term outcomes. 

Overall, the right mix of stocks, bonds,  cash, and other investments must align with personal retirement objectives,  recognizing the need for income,  growth, and stability.

A portfolio invested wisely focuses on actions that can add value and lead to a better investment experience by helping to reduce overall investment risk and potentially improve long-term returns.

Step 4

Lower Taxes Over Lifetime

Tax rules and regulations seem to change every year, and it doesn’t appear to be getting any less complicated. It takes a professional to help navigate the many nuances of taxation and keep your hard-earned resources working best for you.

Taxes in retirement can be meaningfully impacted by the forms of assets owned, timing of account distributions, source of income, types of accounts utilized, personal residence, and eligibility for certain deductions and credits.

One key strategy for managing the taxation of retirement income involves the acceleration or delay of income from Three Tax Buckets. The idea behind the three tax buckets philosophy is to diversify your retirement income sources across these different buckets. 

By having a mix of taxable, tax-deferred, and tax-free income, you gain flexibility in managing your tax liability during retirement. This strategy allows you to strategically withdraw funds from each bucket based on your income needs and current tax situation. It can help optimize your retirement income and potentially minimize your overall tax burden.

Saving Money

You have control. Affinity Financial helps take you from being a passive taxpayer to an active tax minimizer.

Your 3 Tax Buckets

Taxed NOW

TAXABLE Income sources are fully taxable as income is earned, often at ordinary income tax rates.

  • Bank Savings 
  • Money Markets & CD’s · Non-Retirement 
  • Investments

Taxed LATER

TAX-DEFFERED Income, dividends, and earnings grow without any tax due. A taxable event only occurs at the time of withdrawal, giving the investor an element of control to time income taxation.

  • 401(k) or 403(b) 
  • SEP, Simple, Traditional IRA ·
  • Annuity 
  • Real Estate

Taxed NEVER

TAX-FREE The assets are not subject to income tax. Once in the bucket, all income, growth and withdrawals are tax-free.

  • Roth IRA 
  • In-State Municipal Bonds
  • Life Insurance / Cash value

THE BOTTOM LINE:

It’s time to MINT your Financial Freedom

Retirement can be a series of challenging and complex life transitions. Here are some  of the most common mistakes to avoid: 

  • Underestimating retirement expenses and failing to account for unexpected expenses, such as residence changes,  healthcare costs, or travel spending. 
  • Failing to match investment strategies with changing financial needs in retirement. This could mean investing too heavily in risky or illiquid assets, focusing too much on income over total return,  or holding too much cash for short-term comfort at the expense of long-term sustainability. 
  • Withdrawing too much too soon, makes future needs a challenge to meet. 
  • Overlooking tax implications of income,  investment, and life decisions. 
  • Neglecting social connections and a  healthy post-career lifestyle vision that embraces leisure, connection, renewal,  and engagement.

Why seek professional partnership?

(Instead of doing this yourself?)

The golden years of retirement hold exciting possibilities, and today’s retirees have more choices,  opportunities, and freedoms than ever before. The reality is, though, that living well in retirement isn’t guaranteed. It requires a strategy to help you get there and regular monitoring to stay on track.  Collaboration with a qualified financial advisor can offer the Competence, Coaching, Convenience,  and Continuity that inspires confidence to live your unique RetireMINT™ vision to the fullest. 

You never finish designing your life. This fresh chapter of your personal journey is a joyous and never-ending design project of building your way forward toward your affinities… 

It’s time to plan for prosperity

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