STRATEGIC WEALTH, LLC
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Retirement Planning

Retirement Planning

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When it comes to your retirement, cash flow planning is often at least as important as the returns you receive on your investments. 

Why? 

Well, think about how your financial affairs can be categorized into three types of money.
  1. Accumulated money - This the money you have accumulated at this point in your life. Think 401(k)s, IRAs, investment real estate, and business interests. 
  2. Lifestyle money - This is the money used to for mortgage payments, insurance, food, entertainment, and the like.
  3. Transferred money - This is the money that is flowing out the backdoor - unknowingly and often unnecessarily - in the form of taxes, non-deductible interest, the structure of mortgages, the use of qualified retirement plans, investment expenses, and insurance.

Opportunity Cost

Transferred dollars aren't the only cost though, because there is also an opportunity cost on those lost dollars. And remember, opportunity cost is simply a fancy way of saying that when you lose a dollar, you didn't lose just the dollar. You also lost the interest that dollar could have earned for you. 
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Consider the average American and their $10,000 of credit card debt. If we assume an interest rate of 19% on the debt and the payment of interest only every year, most people believe that the cost of the credit card would be $38,000 at the end of 20 years. 

Not so. If this particularly person felt they 
could earn 7% on his/her money, the opportunity cost was actually $77,891!

Importance of Capital

When it comes to your retirement, capital is incredibly important.

Your ability to build capital is derived, in large part, from your cash flow. Most people are reluctant to engage in the financial planning process because they think they are going to have to reduce their lifestyle money in order to increase their accumulated money.

We can often find savings as a result of
 our focus on reducing unnecessary wealth transfers. This results in an increase in your cash flow during your working years, and that increased cash flow can be redirected to your accumulated money.... without decreasing your current lifestyle.

We use a similar approach for those approaching retirement and those already in retirement.

Whether we are reducing your insurance cost, maximizing Social Security; reducing taxes on investments through portfolio design, product choice,  or through the timing of distributions from retirement plans; or decreasing the unrecognized expenses on your investments; the goal is to increase your capital!

Golf Analogy

Imagine that we could send you to play golf at Augusta National, arguably the game's most beautiful course. In going, we have two things to offer, but you can choose only one. You can have the clubs of any of the finest players to have ever played the game. Or you can have their swing. 

​What do you choose?
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Clubs vs. Swing

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Of course, you choose the swing! 

We are the pro in this golf analogy. We are going to take you to the practice tee and watch how you swing. In the process, we are going to help you with your mechanics. Then, we are going to talk about course management. In the game of golf, just like in retirement, you have many club options in your bag. Sometimes, it makes sense to pull the driver out of the bag and try to kill the ball. If your successful, great!

If you shank it, that is ok, because you've looked at the fairway and know it's wide enough to avoid serious errors.  

In other situations though, the fairways are narrow and have sand traps everywhere. Furthermore, the green is on an island and it's a windy day. In that situation, it may be smart to keep the driver in the bag and use a different club. You may not hit it as far, but you have a lot more control over where it goes. 

Do you see the analogy to your investments?

When it is time to go buy clubs, we aren't going to take you to Sam's club. Instead, we are going to the pro shop and fill your bag with clubs designed for your swing.

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​​BUSINESS PLANNING

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Strategic Wealth, LLC | 5957 Shiloh Rd, Suite 114 | Alpharetta, GA 30005 | (678) 456-5060
  • About Us
    • Our Beginning
    • Why Us?
    • Services & Fees
  • What We Do
    • Personal Planning >
      • Family Bank
      • Retirement Planning
      • Investment Management
      • Charitable Planning
      • Risk Management
      • Social Security Optimization
    • Business Planning >
      • Expense Reductions & Tax Credits
      • Business Valuations
      • Buy-Sell Agreements
    • Case Studies
  • Client Access
  • Articles
  • Contact Us