You don't know what you don't know.
The Modular Plan focuses on the Five Major Risks in retirement: Tax Rate Risk, Legislative Risk, Market Risk, Running-Out-of-Money Risk, and Long-Term Care Risk, and will provide a deep dive into your current financial situation to help you prepare for a more secure and rewarding retirement. Using state-of-the-art leading financial planning technology, we provide the information that you need, and that other advisors cannot or will not provide, to help you make smart financial decisions.
The cost is $995, but if we mutually agree that PTM Wealth Management will help you implement all or part of the Plan, we will refund your plan fee. Here is what you can expect to learn from The Modular Plan.
Tax Rate Risk and Legislative Risk
The IRS is your retirement partner, and the portion of your retirement that is owned by the government is determined by tax rates. Our country's increasing debt burden and underfunded entitlement programs will force the Congress and the Senate to increase taxes in your retirement, and will cause your heirs to lose as much as 20% - 40% of their inheritances to Federal income taxes. Every dollar withdrawn from tax-deferred retirement accounts is subject to Federal income tax, as is 85% of your Social Security benefits.1 And it's not just the inevitability of higher taxes that are the problem. The government can make changes to how you, and your heirs, are taxed on the savings you have accumulated.
The Modular Plan will identify your current and future income streams, including Social Security, pension and passive income, dividends and interest income, and forced taxable Required Minimum Distributions (RMDs) form your retirement accounts, and other income, to provide a baseline estimate of Federal income taxes in retirement if taxes never increase.2 We will also tell you how your Medicare costs may be affected by retirement income with a cost estimate for Part B and D premiums. Then, we provide our "stress tests." How would your current retirement income plan hold up if taxes were to increase to an effective 30% in 2035 and 40% in 2045? How much more income will you require to overcome rising taxes if you stay the current course and do nothing? How much more of your children's inheritances will be lost to Federal income taxation?
Now that we understand your current exposure to rising Federal income taxes, we apply the same assumptions that we used for the base case, and create a personalized tax-optimization plan for you. We provide guidance on how to reposition your current savings to create more tax-efficient retirement income streams that can even reduce your exposure to higher Medicare Part B and D premiums, and ensure that a more tax-efficient .
Market Risk
The risks we have taken as investors during the years that we are working may work against us in retirement. Taking more risk in your savings investments may make sense when you are receiving a paycheck that covers your lifestyle requirements, a company match to help you save even more, and co-insurance to lighten the financial burden of healthcare. But when you are in retirement, you are solely responsible for providing your retirement income paychecks, and they need to last for as long as you live, through periods of high inflation, bad markets, higher taxes, and unforeseen events. If history is any guide, a financial crisis is inevitable in your retirement.
The Modular Plan assesses your comfortability with losing money (which is how most of us define market risk), and we use state-of-the-industry technology to assess the risk in each and every investment you own, in every account. Our technology assigns a risk score to you and your current portfolio, and we present how it may perform in good markets and bad. With this information, we model a major multi-year financial crisis in your retirement (similar to 2000-2002 and 2007-2009) to stress test your current investment strategy's ability to sustain your income and standard of living during periods of bad markets.
Once we know how your portfolio will perform we share with you a proposal to better manage risk in your investments, while preserving the opportunity for future growth. We will introduce you to investments that can help you protect your investment principal, lock in gains annually, and create sustainable lifetime income to complement your Social Security benefits. We've been building risk-managed portfolios since the Dot Com bubble burst in 2000. We'd like to share our best ideas with you.
Running-Out-Of-Money Risk
The most pressing question on everyone's mind is: Do I have enough money to retire? There is no perfect answer for this question because no two individuals or families save and spend exactly alike. Everyone has their own unique "number," and there is no one-size-fits-all solution to ensuring that you do not run out of money. So, how will you know if you have enough savings to sustain your lifestyle in retirement? The Modular Plan will customize a tax-optimized withdrawal solution to provide sustainable lifetime income from any and all accounts you have.
Your base salary in retirement will come from Social Security benefits. We use our advanced income planning technology to help you determine the best strategy to claim your benefits to meet your retirement goals. But you will also need to draw from your investments to supplement your Social Security benefits in order to spend the way you want to in retirement. The Modular Plan stress tests your retirement income goals against higher taxes, higher inflation, bad markets, and even a need for long-term care, to ensure that you have a plan to pay yourself in retirement for as long as you live.
Long-Term Care Risk
Several studies have shown that as many as 70% of retirees over the age of 65 will experience a need for long-term care (LTC), and an estimated 45% are at risk for dementia. No one wants to be a burden on their children, but a failure to have a plan for the potential need for LTC may leave you with no other choice. Many will choose to self-finance their LTC, but what resources do you have to determine what that cost might be far into the future?
The Modular Plan will provide insight into the costs for LTC when you will actually need it. We use current healthcare cost data and use realistic inflation rates for those costs to arrive at a realistic LTC expense, should you need it. The Plan will not recommend specific product solutions, but it will quantify how much of your savings might be transferred to an institutional caregiver rather that your heirs. We can even take an additional step towards providing more insight into your potential need and costs by incorporating our leading edge AI LTC modeling technology. You don't know what you don't know where LTC is concerned, but The Modular Plan can help you gain more knowledge and understanding that will be useful to you in addressing it.
What You Need To Know To Enjoy Your Best Retirement
We developed The Modular Plan because it is important to know what you don't know. How can you effectively prepare for the unexpected without an understanding of how your savings can best be optimized to address higher taxes, higher inflation, bad markets, and a need for LTC? How will you know if you are in danger to run out of money, and what can you learn about how to prevent it from happening? These are the key questions that are answered in The Modular Plan.
If you have never taken a deep dive into your current financial situation, The Modular Plan is your opportunity to do so. For the low cost of $995, we will provide the insight and expert analysis to help you make smart financial decisions in all aspects of your lives. And if we mutually choose to work together to implement all or part of The Modular Plan, we will refund your Plan fee and welcome you into our family of clients under our wealth management fee agreement.