Steps for Financial Readiness in Retirement Planning

Most advisors start the conversation at step four. Here is what steps one, two, and three actually look like and why skipping them is expensive. Step one: Spending clarity. Before any investment conversation, you need the real number for what you spend every month. Not an estimate. Not a rough sense. Most clients are off by 30 to 40%. That gap is where wealth quietly disappears — regardless of what returns the portfolio generates. Step two: Net worth mapping. Not just the portfolio. The flat you live in, the LIC policies from 2007, the ESOPs you haven't reviewed, the FDs across three different banks. Everything, in one place. Until this exists, any advice built on top of it is built on an incomplete picture. Step three: Money longevity. One question: does what you have, combined with what you're saving, last your lifetime at the lifestyle you want? This requires a proper financial plan, not a returns projection. This is where most clients encounter the answer they've been avoiding. Only after these three steps does the investment conversation make structural sense. Step four: which asset class, which product, what to buy is the only conversation most clients want to have. It is also the last one that should happen. The order matters. Not as a philosophy. As a sequence with real consequences when it gets ignored. #WealthManagement #FinancialPlanning #PersonalFinance #HouseOfAlpha #FeeonlyAdvisory

Most people think retirement planning is about saving money. But real security comes from knowing whether you’re actually on track. The reality? 🚫 People underestimate how much income they’ll need 🚫 Savings rates don’t match future lifestyle plans 🚫 Money sits idle instead of growing 🚫 Taxes and medical costs get ignored 🚫 Most don’t know their retirement “freedom number.” Here are 7 quick tests to check your readiness: 1. Income Gap Test ↬ Calculate yearly expenses and add inflation ↬ Compare what you’ll need vs. what you have 2. Savings Rate Test ↬ Aim to save 15–25% of income consistently ↬ Increase contributions as your income grows 3. Investment Growth Test ↬ Ensure your money is invested, not idle ↬ Target long-term 6–8% annual growth 4. RMD & Tax Test ↬ Know when required withdrawals begin ↬ Plan ahead for tax brackets and Roth strategies 5. Healthcare Test ↬ Estimate medical and insurance costs early ↬ Consider long-term care options before you need them 6. Lifestyle Test ↬ Define the life you want at 60+ ↬ Multiply lifestyle cost across 30 years 7. Freedom Number Test ↬ Total yearly expenses × 25 = retirement target ↬ If savings fall short, adjust now, not later Retirement isn’t about age. It’s about readiness. Which test do you need to work on first? Follow me Marc Henn for more. We want to help you Retire Early, Supercharge Your Cash Flow, and Minimize Taxes. Marc Henn is a licensed Investment Adviser with Harvest Financial Advisors, a registered entity with the U. S. Securities and Exchange Commission.

“I’ll have to work until I’m 60.” She said it with a sigh. Just a few years ago, her goal was to retire at 55. What changed? At age 42, she welcomed her son. Life’s greatest joy had also reshaped her financial future. During our meeting, she shared her concern:- “I have to say, it’s not encouraging at all. I wanted to retire at 55, but looking at my situation now, I think I’ll need to extend it to 60.” Her words carried both hope and worried. Like countless others, her priorities shifted as life unfolded in beautiful, unexpected ways. This wasn’t a failure of planning. It was a successful adaptation to life. Her plan needed to evolve, just as her life had. Having a child later brought immense joy, but also new financial layers:- childcare, education, and her own retirement. All unfolding within a tighter timeline. We identified three core challenges:- 📌 Shortened Savings Window – Only 13 years until her original retirement age, with savings not yet where they needed to be. 📌 Increased Financial Commitments – Funds once aimed at retirement were now lovingly redirected to her son. 📌 Extended Dependency Period – At 55, her son would only be 13. Her retirement would need to support them both. Retirement planning isn’t about sticking rigidly to one path. It’s about adapting to life’s changes with clarity and courage. Together, we built a new map forward: ↳The Power of Five More Years Extending her retirement target to 60 became her most powerful lever. As adding years of savings and compounding, while shortening the portfolio's required lifespan. ↳ Intentional Spending vs. Mindful Cutting We audited her cash flow not just to cut back, but to redirect. Every ringgit moved was a conscious choice funding either her son's future or her own. ↳Turbocharging Retirement Savings We maximized her EPF voluntary contributions and aligned her investment strategy to make the next 13 years work harder than the past 20 could have. ↳ Building a Separate “Future Fund” A dedicated education fund for her son was created. This critical step protects her retirement nest egg from becoming a college fund later. Life doesn’t always go as planned, and that’s okay. What matters is recognizing where you are and taking intentional steps forward. Her story isn't unique, but her response is commendable. She chose adaptation over anxiety, and action over avoidance. What about you? When was the last time your financial plan had a heart-to-heart with your life? If it's been a while or if life has thrown you a beautiful curveball, let that be your prompt. Revisit your plan. Adjust the timeline. Redefine the goals. Because the best retirement plan isn't the one written in stone. It's the one that grows and changes with you.

Most people think financial planning = managing investments.... That’s not how I see it. The real value comes from building a system that makes your money run smoothly, reduces stress, and frees up your time. Here’s what that looks like in practice: Step 1: Discovery We start with values, not balances. – What role does money play in your life? – What does financial independence feel like to you? – How much risk can you really live with? The answers tell me more than any statement ever could. Step 2: Goals We turn vague wishes into goals: – Reduce admin to 30 minutes/week – Automate savings across accounts – Set clear rules for real estate or private investments – Create a defined path to optional work by a target age Step 3: Operations This is where most plans die. Transfers, rollovers, logins, forms, beneficiaries. If you don’t engineer this part, the plan never leaves the page. We link accounts, consolidate clutter, document cost basis, and track every task until complete. Step 4: Cash Flow Variable income and lumpy bonuses require rules. We establish a baseline lifestyle number, a savings waterfall, and a lump sum bucket for major outlays. Step 5: Portfolio Design Diversification isn’t just stocks vs. bonds. We look at: – Balance sheet mix (cash, taxable, retirement, Roth, real estate) – Asset allocation (domestic vs. international, growth vs. value) – Liquidity (liquid vs. illiquid) Step 6: Implementation – Hold back the right cash for taxes and planned purchases – Invest the rest systematically (not based on vibes) – Use direct indexing for tax efficiency – Add municipal bonds when after-tax yield justifies it Step 7: Protection, Estate & Taxes We confirm insurance coverage, review estate docs, align beneficiaries, and coordinate directly with CPAs. No last-minute scrambles. Step 8: Cadence – Bi-weekly meetings until onboarding is complete – Quarterly reviews – Thematic deep dives on cash flow, investing, or liquidity events – Shared trackers with clear owners for every task The result: – Less stress, more clarity – Clients know what to save, where to save, and when to invest – Families spend less time chasing logins and more time making decisions Planning isn’t a pie chart. It’s a living system that connects values to actions, tasks to owners, and money to time. That's what I'm selling.

Lack of retirement savings increases the risk of severe anxiety or depression among older adults. According to a study published in Current Psychology, older adults without retirement savings were a staggering 3.6 times more likely to experience severe anxiety or depression compared to those with financial security. How can you avoid this? There are steps that you can take today to prepare for this. If you are behind on retirement savings: Consider increasing your contribution rate to tax-advantaged accounts like 401(k)s or IRAs. Even small increases can make a big difference over time thanks to compound growth. If you have maximized your 401(k) contributions for the year: Consider exploring additional tax-advantaged retirement accounts such as: → Traditional or Roth Individual Retirement Accounts (IRAs): In 2024 you can contribute up to $7,000 ($8,000 if age 50 or older) to an IRA each year.) Traditional IRA contributions are tax-deductible, while Roth IRA contributions are made with after-tax dollars but qualified withdrawals in retirement are tax-free. → Health Savings Accounts (HSAs): If you have a qualifying high-deductible health plan: In 2024 if you have a high-deductible health plan, you can contribute up to $4,150 for individual coverage or $8,300 for family coverage (plus $1,000 catch-up contribution if age 55 or older) to an HSA. Contributions are tax-deductible, and the money can be invested and withdrawn tax-free for qualified medical expenses. → Taxable brokerage accounts for long-term investments: You can open a regular brokerage account and invest in stocks, bonds, mutual funds, etc. There are no tax advantages for contributions, but you can believe from potential long-term capital gains treatment on investments held for over a year. The earlier you start saving and the more disciplined you are, the easier it will be to build sufficient retirement savings and avoid the anxiety that comes with financial insecurity later in life. An ounce of preparation is worth a pound of peace of mind and better mental health as you transition into your retirement years. = I’m Marc, a Certified Financial Planner. I help you build & protect wealth. Find my Featured section to learn more.

He’s 29 years old. 8 years of pro ball. MLB career over. Total career earnings: $10,000,000 Total saved: $3,000,000 That alone puts him ahead of most. But here’s the real issue most people miss 👇 From age 30 to 60, there’s a gap. No MLB salary. No MLB pension yet. Spending still happening. This is where careers quietly unravel. Instead of reacting later, we built the plan immediately. Here’s how 👇 — Step 1: Roll over the MLB 401(k) The league plan did its job during his playing days. But now? He’s no longer earning MLB income. His taxable income is temporarily low. That’s leverage. We rolled his MLB 401(k) into an IRA to unlock better control and planning flexibility. — Step 2: Strategic Roth conversions Low-income years are rare for pro athletes. This is the window. Each year, we intentionally convert a portion of his traditional IRA into a Roth IRA: • Filling up lower tax brackets • Locking in known tax rates • Creating tax-free money for life Instead of paying high marginal rates later, we’re prepaying taxes when they’re cheapest. That’s not market timing. That’s tax timing. This alone can result in hundreds of thousands (or more) off your lifetime tax bill. — Step 3: Close the income gap He doesn’t need to “retire” forever. But he does need predictable cash flow until the MLB pension turns on. So we mapped out: • Annual spending needs • Investment income to bridge the gap • A second career to start closing that income & spending gap. It doesn’t have to be his “forever” thing but we are taking action, getting reps, and learning skills. The goal isn’t max net worth on paper. It’s control. Enough liquidity to live well. Enough runway to never feel rushed into bad decisions. Enough urgency to get moving towards the next thing. — The result? He enters his 30s with: • $3M saved • A growing Roth bucket • A clear plan until his MLB pension starts • Zero panic about “what’s next” Most players think the hard part is making the money. It’s not. The hard part is making it last after the uniform comes off.

I had a great conversation this week with a 50-year-old prospect who asked a simple but important question: 👉 “If I retire at 62, how much income can I expect each month?” The answer isn’t a guess — it’s a process. Here’s how we walked through it together: 1️⃣ Start with what you have saved today. His total investments formed the foundation of the conversation. 2️⃣ Look at ongoing contributions. How much is being added each year — and are we maximizing employer matches? 3️⃣ Apply a reasonable rate of return. Nothing extreme. Just disciplined, long-term assumptions based on history and risk tolerance. 4️⃣ Determine a sustainable distribution rate. What percentage can we safely withdraw each year without jeopardizing long-term security? 5️⃣ Convert that to a monthly income number. Because people don’t live life in annual increments — they live it month to month. 6️⃣ Convert future dollars back into today’s dollars. Inflation is real. A $12K/mo lifestyle in the future may only feel like $8K/mo today. 7️⃣ Discuss asset allocation as retirement approaches. The mix of growth and safety becomes increasingly important as the retirement date nears. 8️⃣ Highlight the role of fixed income. Stability, predictability, and downside protection matter — especially when you’re drawing from your portfolio. These conversations are my favorite because they take a big, overwhelming question and break it into something clear, logical, and actionable. If you're wondering what your retirement income picture looks like — whether you're 45, 50, or 60 — I’m always happy to run the numbers. Because clarity creates confidence.

It's never too late to get your retirement plan back on track. Here are five quick and easy ways to make impactful changes: 1. Increase Your Contributions Max out your 401(k) or IRA contributions if possible. If you’re over 50, take advantage of catch-up contributions to accelerate your savings. 2. Optimize Your Tax Strategy Don’t let taxes eat into your savings. Consider strategies like Roth conversions or tax-efficient withdrawals. These can lower your tax burden and help preserve your retirement income over time. 3. Reevaluate Your Asset Allocation Review your investment mix to make sure it aligns with your retirement timeline and risk tolerance. As you get closer to retirement, a well-diversified portfolio can help protect your savings from market volatility. 4. Assess Your Retirement Goals Take some time to clarify your retirement goals. How much will you need for the lifestyle you envision? Defining your target can help you plan more effectively and close any savings gaps. 5. Plan for Healthcare Costs Healthcare can be a significant expense in retirement. Make sure you’re accounting for potential medical costs. Explore options like HSAs or long-term care insurance. It’s never too late to make meaningful adjustments and build the retirement you want. Message me today to start putting these tips into action and regain control over your retirement future.

Your financial health deserves more than a one-time check-up. This summer, we're diving deep to ensure every aspect of your plan is optimized. Here's what's on our agenda: 1. Tax Review & Analysis:     → Analyze tax returns. → Provide Tax Observation Report summaries. 2. Ongoing Financial Plan Updates:     → Update financial plans and scorecards. → Integrate new data. 3. Insurance Reviews:     → Even years: Medicare and life insurance. → Odd years: Long-term care, property, and casualty insurance. → Ensure alignment and adjust as needed. 4. Estate Planning: → Consider charitable giving. → Discuss gifting and tax risks. → Review estate plan documents. → Provide insights and observations. By staying proactive, we ensure your financial strategy is not only current but also robust enough to meet your goals. DM  "Blueprint" to get started on your personalized financial review.

Chart of the week: Build a retirement income portfolio based on ability and willingness to take risk. It's one of the most frequent questions I'm asked... How should I investment my portfolio earmarked for retirement just prior to or during retirement? It comes up all the time, but particularly during times of market or economic stress when uncertainty about the performance of stocks rises. Stocks are still critical in a retirement portfolio, for most investors. But so are more stable investments, in our view, including cash, short-term reserves/investments, and bonds. You could use a general 60 percent stock, 40% bonds and cash "guideline." Or you could personalize your approach. I suggest the latter. The question to ask is... How much money may I need soon, from your investments? This requires creating either an assessment of how much you've been spending, or how much you plan to spend, as well as accounting for other potential income sources such as Social Security, annuity, pension, part-time work, or other sources. 1️⃣ Once you've done this calculation, considering set aside a year of what you'll need over and above those sources of income from your portfolio into cash investments such as a yield-bearing money market account. Spend from this account. 2️⃣ Then, multiple the amount by somewhere between 2 and 4, depending on your tolerance for investment risk. Keep that amount, equal roughly to 2-4 years of withdrawals, in steady investments to provide liquidity (meaning not just the ability to sell the investment, but do it at a price that's not highly dependent on the economy or market) and stability to whether a bear market and/or fund spending if needed from the portfolio. 3️⃣ Last, create and invest a long-term portfolio that includes stocks and bonds based on your risk tolerance and time horizon. This provides growth potential and funds future spending. Consider an example... What if you plan to withdraw about 5% from your portfolio next year and spend about the same amount per year in the next 2-3 years without much change in your income sources? Working backward, using the personalized steps above, this brings you close to a "traditional" 60/40 stock/bonds & cash portfolio used as a rule of thumb for retirement. But on your terms, based on your needs. The chart below provides an illustration. If you need help, as always complete a personalized plan and work with a professional retirement planner and advisor. #retirementportfolio #financialplanning #risktolerance #riskcapacity