Retirement

Hail to the Chiefs!

By Bud Kasper, CFP®, AIF®

January 31, 2020

The Kansas City Chiefs 50 Year Journey Back to the Glory of the Super Bowl

After a 50 year hiatus, the Kansas City Chiefs have finally made it back to the pinnacle of football as they prepare to play the champions of the NFC, the San Francisco 49ers in Super Bowl LIV (54) this Sunday at Hard Rock Stadium in Miami Beach. For fans and players alike, it has been a long and many times arduous campaign that finally became a reality with the Chief’s win over the Tennessee Titans 35 to 24. Seventy-three thousand fans rocked the Chief’s Arrowhead stadium to its foundation when head coach Andy Reid held high the Lamar Hunt trophy proclaiming the Chiefs as the AFC champions.

The only unfortunate fact was that the late King of the Kingdom, founder Lamar Hunt, was not there to rejoice and celebrate with the fans who Lamar always claimed were the real owners of the team. Lamar’s son Clark, along with his mother Norma, who has never missed a single Super Bowl game, celebrated with the fans. Fans who have faithfully believed in the Hunt’s family commitment to bring back to Kansas City the Lombardi trophy signifying a super bowl championship.

Chiefs in the Super Bowl Isn’t an Accident

Nothing of this magnitude or importance happens by accident. It takes a dedicated owner and unified coaching staff with a head coach that can lead both coaches and players alike to make it to the championship of professional football. This fact by itself is a rare combination that takes time to develop and nurture until every team member, regardless of their specific skills, can come together as a synchronized unit to promote the team’s ability to become the best of the best. A highly focused unit that understands good things in life don’t generally happen by accident. It comes from planning!

In comparison, it is no different when planning for retirement. Just like with the Chiefs, in retirement planning, you need an experienced head coach. That one person who knows the education, the credentials, and experience to help in the development of a personal comprehensive retirement plan. A person who, as a true professional, understands every aspect of the planning process. A person who listens intensely to the needs of his client and can bring in other professionals with specific skills in certain areas of planning that requires a higher level of expertise in particular areas of the planning process.

Planning Can Get Complicated, Just Look at Medicare

In planning, there are a considerable number of planning subsets that need to be mastered for a plan to meet its intended objectives. Let’s address some of the specifics of these subsets. Medicare planning has become one of the most formidable and costly challenges for retirees to master and develop a plan. It is a process that evaluates when one should file? Who does or doesn’t have to file for Medicare at the age of 65? What happens if you don’t enroll in Medicare on time? How does private insurance work with Medicare? How much can a person expect to pay for healthcare after going on Medicare? What is a Medicare Advantage Plan? Or Medicare Part G? What about part D? Do I need supplemental insurance? Does Medicare cover long term care?

One of the significant reasons the Chiefs won then AFL championship is because of its defense. What is your defense if the market reverses direction and starts losing money? How are your retirement assets allocated? When should you change your portfolio’s allocation, or should you ever change your allocation? Are you working with a person who understands downside risk and how to manage it? What is double negative compounding, and does it/could it impact your retirement savings? Are we headed for a recession? How will my portfolio react in a bear market? Where will I get income? What percent of my working income will I need when I’m retired? How do I factor inflation into my income needs? Can I afford to live in the same lifestyle as when I’m working?

Lots of Questions, So Plan Ahead

Another significant factor that can change the success of your retirement plan is Social Security. Should I file as soon as I can at 62? What is the income benefit of waiting until my full retirement age or until I’m 70? I was married and divorced, can I claim Social Security on my Ex’s benefit? What is a spousal benefit? Is Social Security taxable? Can my Social Security benefit impact my Medicare or visa-versa? Will Medicare pay all or any part of my long term care if I need it? Do I need a private long term care coverage?

Do I need a trust or a will? What’s the difference? What does intestate mean? How can I avoid probate court? What is a bi-pass trust, and do I need it? What is the best way to fund my charities? QCD, what’s that? Can I reduce the taxation on my Social Security income? When should I use a Roth IRA rather than a Traditional IRA? What about my 401(k), Roth or Traditional? Am I paying more in taxes than I need to? How can I lower my tax bracket? Do I need life insurance when I retire? I understand that annuities can be very expensive and provide only limited upside when the market goes up, is that true? How much do I need to earn in my retirement portfolio per year and still keep my principal near where I started?

These are just a few of the dozens and dozens of additional questions that require absolute and correct answers for a retiree to be comfortable with their retirement plan.

Retire with Clarity, Confidence, and Control

To retire with clarity, confidence, and control is every retiree’s right and a duty to both themselves and their families to be prepared and have a plan! There is no doubt the tremendous success of our Kansas City Chiefs has experienced is due to the intense planning of the entire organization. Proper preparation breeds success. The unfortunate truth is that the vast majority of retiring Americans are ill-prepared! Many will retire and pay more in taxes than they need to.

Many will start Social Security at the wrong time. Most will take more risk in their retirement portfolio than required. Many will leave a taxable estate to their heirs. On January 1, 2020, Congress passed the SECURE Act. This was a “money grab” by Congress that took away the stretch provisions for the children of most IRA owners. The new rules are complex and will need to be addressed at our next client reviews.

In conclusion, 2019 and so far in 2020 have been great for portfolio returns, and retirement plans are more secure. Just as exciting is what we are all waiting for this Sunday!

So in honor of the Chief’s success, we want to share with you an incredibly fun video featuring the Chiefs and Pat Mahomes! Please watch the video below and GO CHIEFS!

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Investment advisory services offered through Barber Financial Group, Inc., an SEC Registered Investment Adviser.

The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.