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Balancing Your Buckets

Are some of your savings buckets too small? We can help. 

We often encounter pre-retirees who have worked a career for 25 or 35 years, and are suddenly within that three-years-to-three-weeks timeline of retirement. They come into our office seeking advice, they asked for a referral (thanks!) and called us up. 

When we discuss their financial picture, we typically find that the majority of these people have their biggest bucket of savings in a work retirement plan. Sometimes, they’ll have another smaller bucket like a Roth, or they’ll have some cash stashed at the bank in a checking or savings account. The last two buckets we see are cash value in a life insurance policy, and what we call non-qualified accounts with stocks and bonds that are funded with after-tax dollars, so when they sell they’re only subject to capital gains taxes – where there are gains. 

Now, let’s visualize that we’re all on a beach somewhere – sounds nice right? It’s a beautiful summer day. Now, think back to when you were a kid headed for the beach, and your parents bought you one of those sand castle starter kits with all those colorful plastic buckets and trowels. Remember how those different buckets all nested within one another, making packing up and traveling easy? 

Opening up that kit and lining up those buckets, seeing the different shapes, sizes and colors, is similar to talking about your finances and the buckets you’ve saved, and one question a lot of people ask in their 40s is, how are my buckets looking? How’s my overall financial picture? If we catch you early enough, we’ll try to even out the amount in any particular bucket, not just for diversity, but because we also want to make sure you’re taking advantage of tax deferment, while managing the efficiency and flexibility of your taxable accounts as well. 

But back to those pre-retirees who come in three weeks before they retire – for these folks, we’re simply building them a growth and income plan that is designed to help provide them with some money and make it last as long as possible – perhaps even for future generations or estate gifts down the road. At this stage, there’s not much we can do about their buckets for retirement. But I do know that at the end of the process with these folks, they usually say something along the lines of how much more comfortable they feel, how glad they are they came in, and how they wish they’d met us 20 years ago. 

There’s the point folks – whether you’re 55 and have 10 years to go, 45 and have 20 years to go, or you’re 35 and you just bought your first house and you can’t fathom retirement in 30 years, you need to get in here and talk to us. We can help you set up a plan to start building that sandcastle of your dreams, and hopefully, you’re so successful in that plan that you can also buy a boat, and then a bigger boat when you hit your midlife crisis. Call us today. We’ll keep the coffee hot. 

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