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Retirement planning is a complex task, as it requires careful consideration of various financial options that can impact a persons future financial security. Below we have illustrated five specific options for retirement planning: Impaired Life Annuities, Transfer Values, Unsecured Pensions, Phased Retirement, and Open Market Options. We look at the benefits and drawbacks of each option, as well as some tips for making the best financial decisions for your future planning.

Impaired Life Annuities

An annuity is a financial product that provides a regular income stream in exchange for a lump sum investment. An impaired life annuity is designed for individuals with certain health conditions that may shorten their life expectancy. These annuities offer higher pay-outs than standard annuities because the insurance company assumes the individual will have a shorter lifespan. This means that the payments from an impaired life annuity will be higher than a standard annuity, providing greater financial security to the individual.

The main advantage of impaired life annuities is that they offer higher pay-outs than standard annuities, providing a greater level of financial security to the individual. This can be particularly important for individuals with certain health conditions that may impact their lifespan. However, impaired life annuities are not suitable for everyone, as the pay-outs may not be worth the investment for individuals with longer life expectancies. It is important to shop around for the best rates and to seek advice from a financial advisor before making a decision.

Transfer Values

A transfer value is the cash value of a pension fund that can be transferred to another pension scheme. This can be a useful option for those who want to consolidate their pensions or move to a scheme with better benefits. A transfer value can be particularly beneficial if an individual has multiple pension schemes and wants to consolidate them into one. It can also be useful if an individual wants to move to a pension scheme with better benefits, such as lower fees or better investment returns.

However, it is important to consider the costs and benefits of transferring, as some schemes may charge high fees or have lower investment returns. In addition, it is important to check the terms and conditions of the existing pension scheme, as some schemes may not allow transfers. It is important to seek advice from a financial advisor before making a decision.

Unsecured Pensions

An unsecured pension is a type of income drawdown plan that allows individuals to withdraw income from their pension fund without having to buy an annuity. This option can provide greater flexibility than an annuity, as individuals can choose how much income they want to withdraw each year. However, it also carries greater investment risk, as the income is dependent on the performance of the pension fund.

Individuals may need to seek advice from a financial advisor before choosing this option, as it can be complex and requires careful management of investment risk. It is important to consider factors such as the investment returns, fees, and tax implications before making a decision.

Phased Retirement

Phased retirement is an option that allows individuals to gradually reduce their working hours or switch to part-time work before fully retiring. This can be a good option for those who want to ease into retirement or continue working in a reduced capacity. It can also be beneficial for those who want to boost their pension savings or extend their retirement income.

However, it is important to check with your employer or pension provider to see if phased retirement is an option. Some employers may not offer this option, and pension providers may have specific rules or restrictions on how retirement benefits can be taken. It is important to consider the financial implications of reduced working hours, such as a reduction in income, before making a decision.

Open Market Options

With this type of retirement planning option the individual is allowed to shop around for the best annuity rates rather than purchasing an annuity from their current pension provider. This means that individuals can compare rates and terms from various providers and select the best option for their needs.

There are several benefits to using Open Market Options for retirement planning. First, they provide individuals with greater flexibility and choice. This can help individuals to find an annuity that meets their specific financial needs and goals, rather than being limited to the options offered by their current pension provider. In addition, Open Market Options can help individuals to secure higher annuity rates, as they can compare rates and terms from multiple providers.

In Summary

Overall, retirement planning involves making careful decisions about various financial instruments that can impact an individual’s future financial security. It’s important to seek advice from a financial advisor and consider all the options available before making a decision.

Money is one of the top stressors for long-term couples.

And it’s a topic that makes many couples uncomfortable, whether they’ve just started dating or have been in a long-term relationship or married for years. For couples who understand the importance of getting their money matters out in the open but aren’t sure where to begin, starting a money date night tradition may be the answer.

Long gone are the days when only one partner (usually the man) held the money strings. These days in many relationships, both partners work and contribute financially to shared expenses. They both have stakes in their household’s financial situation, and their individual money habits can positively or adversely impact the other’s—especially if there isn’t an open line of communication.

The financial decisions you make as part of your partnership on expenses like the roof over your head, medical care, putting food on the table, your children’s school and college and your future retirement plans can have a big effect on your values and goals as individuals, as well as partners.

At times in my practice, money has been a sensitive issue with the couples I advise. Because money is often associated with one’s ability to take care of their family or their career success, it often informs each person’s attitude about their relationship, their life and even their social standing.

If one questions a partner about their money habits without a lot of sensitivity, they may become defensive, aggressive or even outright hostile. As with any crucial conversation, it’s important to strategize and plan discussions in collaboration with your partner.

Why is talking about money so important?

If you’re on the fence about initiating regular conversations with your partner about money, an online survey by Ramsey Solutions found that couples who rated their marriage as “great” talk daily or weekly with their spouse about money. And those who didn’t rated their marriage as just “okay” or even “in crises.”1

How to get started with money date nights

To facilitate better money conversations, consider planning regular money date nights:

Schedule a certain day and time to get together, say the third Sunday of each month.

Choose a place where you won’t get disturbed, switch off your mobile phones and minimize other distractions.

Your date night can take place over dinner at a restaurant, on the beach or during a picnic in the park.

If it’s your first official money date, picking a neutral location can make the experience more relaxing.

The purpose of your money date should obviously not be to harass each other or push each other’s buttons. For better and for worse, you’re in it together and two heads are better than one when it comes to making financial decisions. You should approach every money date with a “better together” attitude.

What financial topics should be on the agenda for your money date night?

My husband I pick a money-related date night “theme” and review one aspect of our financial life. We always making sure to end the date with something fun like a cocktail or dessert—or both! Here is a list of suggested topics to get you started:

Do a high level review of your ongoing bills and expenses

Discuss your collective or individual debts such as credit cards, mortgages and car loans, taking a look at the current interest rates and remaining balance

Look at your sources of anticipated income including salary, bonuses, commissions, property rents or an inheritance

Talk about big goals you’re dreaming of, like buying a second home, funding college for your kids or grand kids, working less or retirement

While it’s obvious that the dollars and cents of your shared life should be discussed, what’s even more important is to talk about during these get-togethers are the emotions your money situation brings to the surface.

Five emotion-based topics to include on your money date night agenda

Talking about money can be awkward in the beginning, even if you’ve been together for a long time. Actually, even if you’re having regular dates nights like I am, there are still times that things get awkward between us! But if you can agree ahead of time that the goal of talking is to become more connected to one another, it can make the discussion go a little smoother.

Listed below are five suggested topics that are oriented more towards the non-monetary side of your financial relationship:

#1 Your childhood experiences with money

What did you learn about money growing up? Did your parents openly talk about money, or was the subject taboo? What is your first memory about money?

In more traditional families, the finances were often monitored and controlled by the father figure and weren’t shared with the mother or children. On the other hand, in many families, children are openly encouraged to talk about money. Maybe as a kid someone helped plan a garage sale or sold lemonade.

Having a deeper understanding about each of your backgrounds and money-handling experiences can shed some light on why each of you make the financial decisions that you do today.

#2 What are your most important life values, and how do those relate to your money?

Exploring each other’s most important life values even if they don’t directly relate to money can serve as an important foundation for making better financial decisions together.

Is one of your values being able to work a flexible job to spend more time with your kids? Avoiding debt at all costs? Exploring the world to open your eyes to other cultures? Living modestly to avoid materialism and give back to others?

Discovering what really makes your partner tick will bring you closer together and give you the motivation that’s often lacking to make better financial decisions.

#3 How do those values translate to more quantifiable and specific money goals?

Once you’ve explored each of your most important values and whether those do or don’t align, it’s time to turn those values into shared short- and long-term goals.

Ask questions like these: How much should we have set aside for an emergency fund? What’s most important to save for in the coming five years? is it buying an investment property? Funding the kids’ 529s or taking a big vacation to celebrate a milestone? When do you think you’d like to work less or retire?

And perhaps most important, discuss the steps can you take together to honor each other’s core values and accomplish your financial goals while living the kind of lifestyle you’d like to have today.

#4 Are there perceivable money problems?

If one of the partners in a relationship is feeling resentful about money-related issues or decisions made by the other, it can cause a lot of strife. Whereas openly airing them can reduce conflict and bring a couple closer together.

Do you experience any ongoing stress about money? Are there some expenses you find unnecessary that we might eliminate or reduce? Is there debts that can be more quickly eliminated with frugality, better money management, asking for a raise or looking for a better job?

#5 What are the good things that are happening in our financial life?

Sharing progress fills us with gratitude and encourages us to strive harder. Talk together about what you’re most proud of when it comes to your finances.

Are you consistently reducing your debt? Did you recently get a promotion or a raise? Have you signed a lucrative contract? Has the value of the property inflated? Even celebrating small wins like reducing the number of times each of you is eating lunch out each week can go a long way towards building a sense of togetherness.

They may not qualify as romantic, but money date nights might lead to more romance!

Studies have shown that money-related worries are the leading cause of stress. The chart below from the American Psychological Association’s annual Stress in AmericaTM survey 2 shows that 65% of respondents are worried about money and 65% are worried about the economy.

So You Got a Raise (or Promotion or Job Offer): Now What?

I’ve had clients ask me what they should do when they’re rewarded for their hard work with a nice bonus, a raise or a job offer. They wonder if it’s time to break open the bubbly and celebrate with a lifestyle upgrade, or whether they should buckle down and save it.

First off, let me define the term lifestyle creep.

It’s what happens when you spend more money as you earn more money.

Think buying a bigger house or a more expensive car or spending more on things like vacations, clothes or eating out.

Simply put, it’s means living paycheck-to-paycheck; if not beyond your means.

Let’s pretend you received a positive annual performance review that includes a bonus and some newly vested stock options that total $15,000 in cold hard cash. Should you spend it all on that fancy two-week Hawaiian beach vacation you’ve been daydreaming about?

Or let’s say you apply for and receive a promotion at your company that comes with a 10% salary increase. Should you put your townhouse on the market and move into a larger house in a new housing development with a yard?

Here’s what I notice often happens in these types of spending situations which I’d define as lifestyle creep. After returning from the vacation or moving into the new home, people experience feelings of guilt or even buyer’s remorse because the extra money is all at once gone.

Now on the other hand, you could save all the extra money because you know that’s what you’re “supposed” to do to get ahead in life. But this leaves you feeling like the event that led to that extra income was anticlimactic. What’s the point of working so hard without feeling rewarded by it today?

Neither of these are great options because they leave you feeling less than satisfied. And there’s nothing wrong with improving your lifestyle over time. So, what if the right decision is a little bit of both?

This Nice-to-Have Decision to Make is Why I Recommend Following This Simple 50/50 Rule

Here’s how it works:

-You save and invest 50% of any extra income you earn.

-Then, you spend the other 50% without guilt.

-For your extra savings, you could take half of your percentage increase and bump up your 401k contribution. Or you could invest half of your monthly dollar increase in a Roth IRA or investment account.

To find satisfaction from how you’re spending, you might consider taking a more affordable beach vacation to Florida. Or upgrade the kitchen in your townhome or buy a more reasonably priced house with a yard that needs a little TLC.

I know this rule might sound a little basic, so I’m going to explain why I believe it works.

We’re Only Human, Especially When it Comes to Our Money

We all know we’re supposed to save today to build wealth for tomorrow, but the fact is we humans like instant gratification. A lot. Especially when we work so. darn. hard.

It comes down to simple psychology. Once our basic needs are met so we’re living comfortably, our money decisions are often based on our past. This includes what our parents or relatives taught us and said (or didn’t say) about money. This is especially true when it comes to our spending decisions.

Spending money provides an immediate rush and sense of control, while saving it feels more abstract. And whatever feelings one experiences from their spending decisions are usually short-lived, whether they’re good or bad.

Having a set rule to follow puts you in control and allows you to take action. From that action you get to experience the shorter-term sense of gratification that comes from spending, while also getting a longer-term sense of satisfaction from saving something towards your future.

Why the 50% Saving Rule Can Lead to Success Over the Long-Term

The potential success of the 50% savings rule is due to the power of compound interest.

Here’s an example:

You earn $120,000/year and receive a job offer for a 10% increase of $12,000/year.

You decide to save half by increasing your 401k contribution by 5% or adding $500/month to an investment account.

You receive a 7% average return for 30 years.

Which leads to a balance of more than $600,000! *

This rule is something my husband and I started following several years ago, and I’m happy to report we no longer feel guilty for having some fun, nor do we feel like we’re making a big sacrifice.

By investing half of any increase in your future self, you can still reward your current self who just wants to hear “great job, you earned this.”

Other Areas You Apply the 50/50 Rule

There are other areas to which you can apply this rule beyond salary increases or bonuses.

-Tax refund: Did you overpay and receive a tax refund from the IRA? Spend half of it and use the other half to build your wealth.

-Reduced childcare costs: Is your kids (or more than one) heading off to full-day kindergarten in a public school? Take what you were paying towards a nanny or daycare center and use it for something fun like a vacation fund or dinners out, and save or invest the rest.

-Paying off non-credit-card debt: Follow the 50/50 rule when you pay off debts like student loans, auto loans or a home equity loan.

-A large inheritance: If you lose somebody you love but are lucky enough to receive a large inheritance, you should probably consider seeing a financial planner first. There may be tax implications and other complexities to work through. And if you’re fortunate, you may be able to save and invest more than 50% of the windfall.

The Overwhelm of Losing a Parent

Dealing with the death of a parent is profound, emotional, and overwhelming. It can feel like your list of things to do, from notifying friends and family to making end-of-life arrangements and figuring out what to do with all their stuff is endless. Dealing with these types of practicalities is even more challenging when you’re trying your best to honor them and find time for yourself to grieve.

How and When to Deal with the Financial Aspects of Losing a Parent

While you don’t necessarily need to take immediate action on the various decisions you’ll be faced with related to their estate and finances, it’s important not to put their financial matters on hold for too long, either. This can help you alleviate potential complications in the future.

Here are some ideas for where to start so that you can keep moving things forward while still honoring your parent’s memory.

What to do Within the First Week of Losing a Parent

Contact an Attorney or Estate Planner
If they worked with someone, notify them so they can help guide you through the legal process of settling your parent’s estate. They can help with probate, distribution of assets, and what to do about any outstanding debts. If they didn’t have someone, consider getting some legal help from an estate attorney to make sure you don’t miss anything and understand the probate process.

Secure Their Home, Assets and Important Documents
Change the locks on their home if you think it’s necessary, and make sure to locate and safeguard their important documents, such as their will, trust documents, property and ownership deeds for real estate, vehicles or valuable assets and financial statements.

You should also start collecting their mail and compile a list of accounts, outstanding debts and companies that you’ll need to address.

Obtain Their Death Certificate
Obtain multiple copies of the death certificate from the county or state in which they resided as you’ll need to provide a copy to the list of companies you put together.

The information required to get one varies by location, but most will ask for the following information:

Full, legal name, including maiden name (if applicable)

Social Security number

Birth and death date

Cause of death

Gender at birth

Marital status, including divorce decree (if applicable)

City and state of birth

Where their father and mother were born and died

Military veterans will also need their branch of service, dates of service and separation, and their rank

What to do Within the First Month of Losing a Parent

Notify Relevant Government and Financial Institutions
Contact the following to inform them of your parent’s passing once you receive copies of their death certificate.

Banks and financial institutions: Notify the banks and financial institutions where your parent held accounts, including checking, savings, investment, and retirement accounts.

Insurance companies: Contact any life insurance, health insurance, or other insurance providers your parent had policies with.

Social Security Administration: Report the death to the Social Security Administration to stop any benefit payments and address potential survivor benefits.

Medicare and health care providers: If your parent was enrolled in Medicare or had other health care coverage, notify them to cancel coverage and prevent any fraudulent activity.

Veterans Affairs: If your parent was a veteran, inform the Veterans Affairs office to terminate any benefits or address potential survivor benefits.

Review and Settle Their Financial Accounts
Be prepared to provide copies of your parent’s death certificate to complete each of these activities.

Close credit card accounts: Contact the credit card companies to close your parent’s credit card accounts and prevent any unauthorized charges.

Settle outstanding bills: Arrange for the payment of any outstanding bills or debts your parent may have had.

File tax returns: File a final tax return on behalf of your parent. You should consult a tax professional to ensure compliance with tax laws and regulations and to determine if there are any estate tax obligations you’ll need to cover.

Decide What to do with Their Property and Assets
If your parent owned property or assets, you should plan to work with an attorney to transfer ownership before hiring a real estate to sell a property. You might also consider hiring an estate sale company to sell any items your and your family don’t want and that weren’t distributed according to your parent’s wishes or applicable laws.

Review Their Beneficiary Designations
Check the beneficiary designations on your parent’s financial accounts, including their life insurance policies, retirement plans and investment accounts. You can work with their financial advisor or hire one of your own to help you determine what you need to do with investment accounts and retirement plans.

What to do Within Six Months of Losing a Parent

If you received a sizable inheritance from an insurance payout, home sale or investment assets, it’s important to take your time and come up with a plan to make this sudden wealth event work for you.

Decide Where to Save the Proceeds in the Short-Term
It’s so important not to make rash decisions about your inheritance, especially when you’re already feeling overwhelmed by your grief and your to do list. When you’re feeling vulnerable, unsavory advisors may try to influence you to do something with your money that’s not in your best interest.

That’s why I think it’s best to temporarily save any financial proceeds in a save and easy-to-access account like a savings or money market account. This will allow you to preserve the value of the inheritance while you take the time necessary to consider your options.

Hire a Financial Professional
Consulting with a financial advisor who is a fiduciary can help you navigate the complexities of managing your inheritance. They can help you develop a comprehensive financial plan that takes into account your goals, tax implications, risk tolerance and personal circumstances. A financial advisor should be able to help with the following:

Assess your financial situation: Take stock of your current financial position, including your income, savings, and existing debts. Consider whether you have any immediate financial needs or outstanding obligations that should be addressed first.

Help you establish an emergency fund: If you don’t have one already, consider establishing or bolstering your emergency fund. Aim to save three to six months’ worth of living expenses in a liquid and easily accessible account. This fund can provide a financial safety net in case of unexpected expenses or a job loss.

Determine how to pay off your debts: If you have high-interest debts, such as credit card balances or loans, it may be wise to use some of the inheritance money to pay them off. Reducing or eliminating debt can improve your financial security and save you money in interest payments over time.

Share options for investing for yours and your family’s future: Depending on your financial goals and time horizon, you may choose to invest a portion of the inheritance money. Consult with a financial advisor to determine the best investment options that align with your risk tolerance, investment knowledge, and long-term goals. Consider diversifying your investments across various asset classes to manage risk.

Establish or maintain your retirement savings: If you have not already done so, consider contributing to retirement accounts such as an Individual Retirement Account (IRA) or an employer-sponsored retirement plan like a 401(k). Maximizing your contributions to tax-advantaged retirement accounts can help secure your financial future. Note: There are specific rules you must follow when you inherit your parent’s retirement savings because distributions are required when you’re not a spouse.

Help you reach your education or career development goals: If you or your children have educational aspirations, you may consider using some of the inheritance to fund tuition, books, or career development opportunities. Investing in education can provide long-term benefits and enhance earning potential.

Because everyone’s financial situation and goals are unique, it’s important to consider your specific circumstances when deciding what to do with your inheritance money.

In Summary

Losing a parent is a deeply emotional and overwhelming experience. Hopefully, taking a step-by-step approach to managing these final affairs will help you alleviate some of the overwhelm so you can find the time to deal with your feelings of loss and grief.

While this timeline and financial checklist provide general guidance, it’s crucial to consult with legal and financial experts who can offer personalized advice based on yours and your parent’s specific circumstances. By navigating these practical matters with care, you can honor your parent’s legacy while ensuring a smooth transition for the financial aspects of their passing.

As you progress through life, you will encounter many opportunities, challenges, and events – some you’ll have control over – others you will not. Financial planning should be deeply rooted in what matters most to you, which means identifying and leveraging the factors you can control and operating in the space where the two intersect.

FORMula is the model used to do that. The FORM in FORMula is capitalized for a reason, as FORM (Family, Occupation, Recreation, and Money) encompasses the most important factors to you.

Family

Successive generations woven together create the tapestry of family. That is why your financial plan should be a wholesome and thoughtful strategy that supports each member of your family at every age. For parents, it’s critical that your children and grandchildren understand where your wealth came from, how you worked to grow it, and what you want it to accomplish for them after you’re gone. It’s not just about passing on valuables that is important in transfer planning; it’s about passing on the value systems that have served you well in building your wealth.

In family wealth succession planning, you must work to integrate that value system so that subsequent generations have a compass with which to navigate True North and help steer their futures in a direction that’s congruent with the legacy that was left to them. Whether it’s the dynamic between parents and children or between spouses, your plan should be aimed at strengthening the bonds between family and across generations.

Occupation

Most people spend a large part of their day in or around their occupation. For many, their identity is closely tied to, and in some cases, even dependent upon what they do for a living.

By working through this process, you can gain clarity on what exactly you desire as your occupation beyond mere income. For some, it may be planning for a work‐optional lifestyle; for others, it may be creating a plan for a secure retirement at a specific age. Regardless of which camp you fall into, you want to ensure that you utilize and maximize every available employment resource to reach your ultimate goals.

You must be fully prepared for voluntary employment transitions such as retirement or adjusting to a work‐optional lifestyle. You must also be ready for unpredictable events like an involuntary closure, a disability due to health issues, or even an untimely death. There is often a lot of emotion tied to one’s occupation, so the goal is to ensure that you are adequately prepared financially, regardless of what you may encounter.

Recreation

Planning for recreation is about enabling you to do more of the things you love to do both before and during your retirement. Identify what’s on your special bucket list so you can plan accordingly. Because time really does fly, ensure that you’re actually checking off some of those bucket list items throughout your life.

We each have an R.O.L. (Return on Living) Quotient. It’s important to plan for the future, but it’s equally essential for you to have the resources available to spend more time doing what you love to do now. With proper and consistent planning throughout your life, you should be able to enjoy your present while accumulating wealth for your future simultaneously.

Just as there are life stages, there are also stages within retirement. The first stage of retirement is your “Go‐Go” stage. This is shortly after you retire when you have the time to do the things you’ve always dreamed of doing but were unable to do because of other obligations. This is the time when most retirees do a lot of traveling and exploring. You’re young enough to enjoy everything and still have the energy to do it.

The next stage of retirement is the “Slow‐Go” stage. This is when retirees tend to remain a little closer to home and are generally more focused on home and family. This still encompasses recreation and fun but usually involves more time with grandchildren and children. The bond between grandparents and grandchildren is a special one in life, and we consider this an important recreational component in your retirement.

The quality of health usually dictates the final stage of retirement. Although not directly related to recreation, a little recreation can go a long way in preserving mental and physical well‐being.

Money

Money is the great facilitator and the vehicle that facilitates the other three FORM components. Family, Occupation, and Recreation represent your “whys.” Money is your “how.” It’s essential to thoroughly understand your “whys” before addressing your “how.” That’s how to ensure that your money always fits your dreams, and that rises to a matter of integrity.

These steps are typically reversed in the financial services industry. Many advisory firms are more interested in the money component of the equation while treating the “why” of

the client as an afterthought at best. A financial advisor’s role should be one of stewardship and anticipatory problem‐solver.

An advisor should be vigilant in trying to anticipate and address potential hazards before they happen. They should also be continuously tracking your changing needs and circumstances—regardless of whether those circumstances stem from external forces like tax and economic factors or from life events such as birth, death, or a change in marital status. Each of these situations has obvious and less-than-obvious implications both financially and personally, that is why financial planning should be less about the plan and much more about the ongoing planning, monitoring, and review accompanying the plan.

Many times, life changes are seemingly innocent ‐ like buying a second or even third home, changing a homeowner’s insurance carrier, refilling a property, etc. However, circumstances like these may require subtle course corrections upon examination of the finer points of this new arrangement.

A good advisor anticipates potential issues before they ever grow into problems. The FORM model is the foundation. It’s how to process wealth management and see things through to completion. It gives you purposeful direction and allows all the pieces of your financial picture to work together and evolve as your life evolves.

In financial planning, you need the resiliency and flexibility essential to navigating a rapidly changing world. Peer through the lens of FORM in your current situation, using it as your beacon and guiding light to discovering your True North both financially and emotionally. Are you finding the how of money outweighing the critical why of Family, Occupation, and Recreation? If so, much is being left out of the equation, shorting you on your Return on Life.