Paraclete Life Planning

Hope and Pray is NOT a Retirement Strategy

Do you have a retirement plan beyond "save and hope it is enough when the time comes"?
Most people could tell you what age they want to retire by, what they want their house to look like, where they live, what their hobbies are etc.
​
But they cannot tell you how they will afford it, much less for how long.
Retirement is some far off, distant thing that gets here when it gets here and we assume we will be ready by then.
​
I will tell you this- those most exposed are the ones complaining about inflation right now while fighting over releases of shoes, gaming systems, Stanley cups, using afterpay and klarna on their amazon carts etc.

With no 'guarantee' of Social Security being fully funded and available when millennials come around to retirement- we should perceive it more as a 'retirement bonus' than anything else.

If by chance you no longer have the ability to take that control of your retirement savings into your own hands, and must rely on Social Security, then you have to do what you have to do.

I must preface the rest of this by saying- everyone is different. Everyone has different goals, situations, incomes, debts etc. If one-size-fits-all plans were any good, financial advisors would become obsolete.

The "set it and forget it" approach is like using a hammer to drive in a screw- it may work, but that isn't the most efficient way to approach the goal. We must be equally if not more so tactful in our approach in growing our nest egg than just by brute funding.

If my approach is to achieve a retirement that is as close to tax-free as possible- I am planning out my account spend down so that I can minimize what taxable income I have in my later years.

For millennials, we are in the accumulation phase currently. If we were to sculpt a large statue (retirement), we must first mine a large piece of marble (accumulation).

The accounts we stash those investable funds into, directly impacts the amount of marble we are left with when it comes time for sculpting. Either I pay the necessary taxes now and have tax free funds in later years, or I reduce my taxable income now in exchange for paying tax on the money in later years.

I am a FIRM believer that every account has its purpose and I don't believe any one particular account is greatly superior to another.

Nothing listed here is a suggestion, solicitation, or recommendation- this strategy suits me individually and is not constructed with considerations to your specific financial goals or situation.​
However, if I were to construct a plan for myself- I would invest in my workplace sponsored plan (401(k), 403(b), 457, TSP etc.) UP TO THE MATCH OFFERED. Next I would MAX out my Roth IRA contributions (provided it made sense tax wise and my income did not disqualify me). After/while maxing out the Roth IRA, if I have a high deductible health insurance plan, fund and max out a Health Savings Account (HSA). This is where I may differ from others- I would fund a cash value life insurance policy. While I am young enough to capture manageable rates and in good health, this living benefit policy can supplement my retirement goals and be a cash access buffer through my working years if needed. This policy is used with the specific purpose of being a Life Insurance Retirement Plan (LIRP).
You may come across some telling you to bypass the rest and just dump every bit of excess you have into just the LIRP-
A life insurance policy is NOT a replacement for all else mentioned above. It can be used in conjunction with the rest, but not in place of.

​

The 'Three Legged Stool' retirement strategy is propped up on
1) Social Security
2) A Pension Plan (now your defined contribution work plan)
and
3) Personal Savings/Investments.

Our fear is that too many people are trying to make a stool work on 2 legs and bypassing the necessity of the third leg - personal savings/investments.

DO NOT downplay its significance or overlook its importance.

Your future is determined by your actions today.
Future you is depending on the current you to keep the promises you made to yesterday you.

Don't rob future you of peace, happiness and joy because present you wanted it instead.
Defer some and allow time to compound its value for future you to thank current you for.

​

​

Paraclete Life Planning L.L.C. is a registered investment advisory firm offering advisory services in the State of Florida and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Paraclete Life Planning L.L.C. in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption.
All written content on this site is for information purposes only. Opinions expressed herein are solely those of PLP, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant, or legal counsel prior to implementation.

Questions, comments, topic suggestions? johnny@paracletelife.com Reach Out