Retirement Planning

We use the term Retirement Planning reluctantly because, in a secular sense, it means having your retirement reception, saying good-bye to your co-workers and riding off into the sunset. You're either 'on a shelf' somewhere, or 'out spending your children's inheritance.'

As Christians, this ideal falls woefully short of God's best for us. As we say good-bye to wage-based pursuits, we become more available to prayerfully consider and say "Yes!" to God's plan for the second half of life. At this stage in our pilgrimage, we are freer to employ our time, talent, spiritual gifts, and financial resources in pursuit of God's unique plan for us. In retirement you're standing before a doorway that could open onto the greatest adventure of your life, a journey towards spiritual significance through greater service to others, in support of a cause for which you have a God-given passion — Will you open the door? Can you open the door?

"If Christianity is true, then passion is inevitable." — Adrian Rogers

Your answer may very much depend on your willingness to be a prudent saver, steadily plodding towards financial independence during your wage-earning years. Alternatively, your answer may be dependant on saying "No" to some of the things of this life (materialism) and saying "Yes" to God and the great adventure He has planned for you.

When it comes to retirement planning, we seldom take the time to answer the question, "How much is enough?"; that is, given the lifestyle God has appointed to you, what accumulation of assets and pension income would be sufficient for your family? And how much will be available to achieve a different type of success — satisfying your heart's yearning for eternal significance? For many people approaching retirement and even for those in retirement, the question of "How much is enough?" remains unanswered and consequently, even sadly, the call of God to them goes unanswered, if heard at all.

• How Much is Enough? —
  Present government research says that most American families need 60 - 80% of their pre-retirement income, adjusted for inflation, to maintain their financial lifestyle in retirement; however, many of us in the financial services industry are frequently seeing the retirement income need at 80 - 100% of pre-retirement income due to rising healthcare costs, lengthening life spans, and, of course, inflation. How much you need will be influenced by many factors, yet your existing spending levels will often provide an initial benchmark for your retirement income objectives.
  
  Based on your current investment assets, employer-sponsored savings plan balances and projected future savings rates, we will complete an overview of your current position relative to your retirement goals. This overview will provide a basis for planning strategies that can be integrated with your pre-retirement cash flow and tax planning. Our retirement planning process helps you define and prioritize major life goals and decide on an investment allocation model that seeks to both minimize risk and prevent undue sacrifice of investment potential. We will regularly monitor your progress towards meeting your retirement goals and update your investment allocation model as required.
  
  It is our belief that Retirement Planning should be a pursuit that instills confidence - a confidence in your ability to meet retirement income needs and to achieve your goals.
  
  
• The Retirement Planning Process —
  At BDC Capital Management, we focus on the goals that you value, helping you pursue them while potentially minimizing risk. We simultaneously assess your goals, your investment allocations and your assets to determine how confident you can be that your goals will be met. This process subjects your goals and investment strategy to a 'stress-testing' analysis which simulates 1000 market environments, both good and bad, to evaluate by the number of successful simulations the sucess margin of your strategy.
  
  We recognize that even during your retirement years, goals and priorities change. As they do, we re-evaluate your plan in light of these changes and future portfolio values, providing new recommendations as needed.
  
  
• Key Retirement Decisions —
  Decisions confronting us in our retirement planning usually present significant, sometimes unique, tax and investment management issues. We can help you make confident, informed decisions regarding:
  
  1. Pension Plan Elections
  2. 401(k), 403(b), Deferred Compensation Distributions
  3. Net Unrealized Appreciation on Employer Stock
  4. Stock Option Optimization
  5. Before Tax vs. After Tax Savings
  6. Early Retirement Issues
     • Avoiding 10% Excess Penalty
     • 72(t) Exceptions
  7. IRA Rollovers
  8. Minimum Required Distributions
  9. Minimizing Tax on Social Security Benefits
  10. Business Owner Considerations
      
      • Implementing the Right Retirement Plan
      • Business Valuation
      • Business Continuation
      • Sale / Transfer of your Family Business
  
  
• Risk Management —
  Unknowingly retaining excessive risk can prove devastating to an otherwise carefully considered retirement plan.
  
  At retirement, our focus on risk management changes - we transition from a strategy that funds unmet financial objectives in the event of premature death or disability, to a strategy that helps protect your accumulated assets from large, potentially crippling health or personal liability expenses.
  
  We evaluate your existing employer-sponsored and personally-owned health and long term care coverages. We also review your homeowners, automobile and excess liability plans to help make sure that you have in place adequate asset protection coverages.
  
  
• The Charitable Gift Annuity —
  We mention the Charitable Gift Annuity in this section because of its broad-based appeal to many investors, especially retirees.
  
  With this type of gift, a donor transfers a sum of money or securities to a charitable organization in exchange for receiving a guaranteed lifetime income. The donor also receives an immediate tax deduction since a gift is actually made to the charity when the gift annuity is created even though the charity does not benefit until after the donor's death.
  
  Excerpts from Finish Faithful: How to Create a Lasting Christian Legacy for your Family by Mark Henry, JD

*This section is for informational purposes only, and not necessarily a recommendaton or endorsement for this type of investment.