BUILDING A DYNAMIC RETIREMENT INCOME PLAN

RETIREMENT INCOME PLANNING PROCESS

The Comprehensive Guided Plan involves the use of market-leading retirement income tools and our BluPrint Process, which is a customized retirement income strategy, with a strong emphasis on tax planning, tax optimization, tax-efficient distribution, and cash-flow management.

Modern Project Management Process Infographic

Information below provides further insight into specific inputs and actions in our process to Understand, Identify, Analyze and Develop your Comprehensive Guided Plan:

Financial review and discussion of key elements, such as: your personal balance sheet; income events; current and future savings; cash flow; asset allocation and asset location; overall plan spending capacity; as well as your current and future spending needs (essential and non-essential expenses).

Investment review of your current portfolio and overall strategy. Your portfolio expenses, investments held, diversification and overall asset allocation and tax location are reviewed. BluPrint does not provide specific recommendations to purchase, sell, or hold any particular security (e.g., stocks, bonds, mutual funds, ETFs). We do not provide investment advice or manage investment portfolios beyond a discussion of their general characteristics, tax and cash-flow treatment. We provide high-level general education/information regarding overall investment strategy based on available market research only.

Tax review of your prior year’s income tax return to identify planning opportunities. This includes an analysis of your retirement income plan with advice on, and recommendations for, tax-efficient and tax-saving strategies, asset location changes, Roth conversions, and/or charitable planning or gifting strategies where appropriate. Analysis to identify and validate tax-efficient withdrawal approaches. The result is a high-level tax projection that illustrates the potential impact of implementing tax-planning recommendations.

Risk review is conducted, in areas discussed below. The result of this review is used as input into our unique planning-system software to create your tailored Dynamic Risk-Based Guardrails retirement income plan.

IDENTIFY AND MITIGATE KEY RISKS

As you transition from the accumulation of assets phase (before retirement) to the decumulation of assets phase (near and through retirement), retirees need to ensure they are building their retirement plan to mitigate risks that may not have been so apparent until now. These risks include, but are not limited to, those below. BluPrint evaluates and helps mitigate each of these risks when developing your plan.

Sequence of Returns Risk

The danger that the timing of withdrawals from a retirement account will damage the investor's overall return. Withdrawals during a bear market and/or during the initial stages of retirement can have significant negative impact.

Overspending Risk

The risk of overspending beyond what your investments or other fixed- and variable-income sources can support for the planned length of retirement.

Inflation Risk

The tendency for prices to increase over time. Future dollars (your investments) will not have as much buying power.

Underspending Risk

The risk your retirement nest egg is used too conservatively which may lead to dissatisfaction in retirement as you forgo leaving a legacy, buying that dream vacation home, taking family trips or funding education for grandchildren, etc.

Investment Risk

The level of uncertainty inherent in an investment decision. When you invest in something (e.g. stocks, bonds or a home), there’s no guarantee that you’ll make a return at all, much less the return you’re hoping for.

Longevity Risk

The risk of outliving your savings. The length of retirement is undetermined making it tough to know how much money you’ll need.

ANALYZE, DEVELOP AND TEST PLAN

During the plan-developement process, key client-specific assets, liabilities, income, expense and risk attributes are reviewed and input. Tax-efficient strategies are identified and proposed. Plan scenarios are developed and sensitivity analysis is performed. Stress tests are conducted, and where necessary, plan adjustments are made.

Establish Income Plan

This is the summary dashboard of the calculated plan which indicates total assets, monthly or annual income, and high-level income guardrails.

Analyze Income Sensitivity

Shows the variability, size and frequency of when income adjustments, both up or down, could be estimated to occur.

Set Risk-Based Guardrails

Provides you with the upper- and lower-detailed spending-limit guardrails which are tracked dynamically as the entered inputs and risk components change.

Review Tax Strategies

Provides analysis as to how changes in withdrawal strategies and/or Roth conversions could impact your total average tax rates, total taxes, plan income, and plan-ending legacy values.

Test Plan Scenarios

Describes the chance of underspending or overspending, and the average and best- or worst-case scenario based on plan inputs using historical or Monte Carlo data-analysis techniques.

Stress Test Plan

Test your plan against pre-defined historical bear/bad markets (e.g. The Great Depression, post-war decade, stagflation era, dot-com bubble, Global Financial Crisis and Covid era, etc.) to show how your plan would have performed.

Source: © Income Laboratory, Inc.

Charts and data visualizations presented above are from © Income Laboratory, Inc.

UTILIZE ROBUST PLAN-ANALYSIS TOOLS

BluPrint uses robust and powerful plan-analysis tools to review the outcomes and test sensitivities to plan changes and parameters. Leverage technology to visualize your plan.

Source: © Income Laboratory, Inc.

Analyze Tax Strategies

Review the tax-strategy heat map for available tax-efficient withdrawal strategies, including Roth conversion options and limits to view effects on plan.

View Plan Flows

Analyze the plan financial flows for all income/expenses, assets/liabilities and portfolio cash flows for each plan year.

Visualize Entire Plan

Generate comprehensive and dynamic one-page plans highlighting current and future financial flows, tax-smart distributions and life events.

Analyze Key Plan Drivers

Generate dynamic, graphical cash-flow charts for income sources, expense details and taxes. View the survivor income ratios for plans which include a spouse/significant other.

View Tabular Outcomes

Review all cash-flow income, expense, and tax in a tabular format for an even greater detailed view, by year, of key plan figures.

Evaluate Historical Results

Analyze the historical-analysis chart showing the monthly income level in today's dollars that your plan could have supported from each point in history with historical sequences of returns and inflation.