PS – Retirement Planning

Funeral & Cemetery Professionals | Personal Solutions > Retirement Planning

Getting Retirement Ready


We’ve been working with funeral service and cemetery professionals and business owners for 50 years, helping you navigate every phase of the retirement planning process: saving, investing, tax planning, business exit/succession planning, and cash flow management.

Speaking with our Wealth Advisors, CERTIFIED FINANCIAL PLANNER™ professionals and Certified Exit Planner can help chart your retirement course.

Our mission is to guide you towards your long-term objectives and to ensure you maintain financial security along the way.

It’s useful to think of retirement planning in two phases: accumulation and distribution.

Phase 1: Accumulation

Accumulating assets and building wealth over time starts in our working years, when we can set aside income to finance our retirement. It’s all about saving.

Roosevelt Investments can help you manage where and how your retirement dollars flow:

  • 401(k)s
  • IRAs
  • Roth IRAs
  • Simple or SEP IRAs
  • Taxable Brokerage Accounts
  • 403(b)s
  • And more

For funeral service and cemetery business owners, we also understand that your business may be a major part of your net worth in retirement. In many cases, your business is your retirement.

We get it, and we can help – Roosevelt specializes in making your personal wealth and retirement planning work seamlessly with your business planning.

Accumulating Assets and Building Wealth

How Much Money Do You Need to Retire?
We Can Guide You in 3 Steps.

Step 1: Map-Out Your Income Needs in Retirement

Most people underestimate their income needs in retirement.

Figuring out how much you need starts with a simple question: “If you were to stop working or sell your business today, how much monthly income would you need to maintain your family’s ideal standard of living?”

For funeral service and cemetery business owners, you may be accustomed to having many of your living expenses run through your business. In retirement, it’s important to remember that this income/cash flow option may go away, meaning you may need to make significant adjustments.

It’s helpful to divide your answer into three categories:

  • Monthly Revolving Income Needs – make a list of your monthly outlays, including mortgage payments, utilities, tuition, credit card payments, insurance premiums, subscriptions and memberships.
  • Monthly Discretionary Income Needs – spend a few months tracking how much you pay for discretionary items like groceries, gas, retail purchases, and entertainment. After a few months, calculate the average amount you spent.
  • Annual Miscellaneous – consider what you’d like to set aside each year for items or activities you love, like traveling.

Monthly Revolving Income NeedsMake a list of your monthly outlays, including mortgage payments, utilities, tuition, credit card payments, insurance premiums, subscriptions and memberships.

Monthly Discretionary Income NeedsSpend a few months tracking how much you pay for discretionary items like groceries, gas, retail purchases, and entertainment. After a few months, calculate the average amount you spent.

Annual
Miscellaneous
Consider what you’d like to set aside each year for items or activities you love, like traveling.

Putting these spending factors together, the end-goal is to arrive at a monthly number-in today’s terms and in today’s dollars – providing for your family’s lifestyle needs.

Step 2: Adjust Your Living Expenses Higher Over Time

To paint an accurate picture of your lifetime income needs, there are a few key factors you should consider:

$300,000+

The cost of health care is rising. According to Fidelity, in 2020 “it is estimated that the average 65-year-old couple will need $295,000 in today’s dollars for medical expenses in retirement, excluding long-term care.” Over the years, that number is likely to rise, which should be factored into your retirement plan.

Adjust Living Expenses

$300,000+

The cost of health care is rising. According to Fidelity, in 2020 “it is estimated that the average 65-year-old couple will need $295,000 in today’s dollars for medical expenses in retirement, excluding long-term care.” Over the years, that number is likely to rise, which should be factored into your retirement plan.

85+

People are living longer, and medical breakthroughs of the future are likely to push life expectancy out even further. The takeaway: make conservative estimates when planning how long you’ll need retirement income. The Social Security Administration has a helpful calculator to help you estimate your life expectancy: Calculate Life Expectancy.

2-3%

Inflation has been running below 2% for the last decade, but as you can see in the chart below, inflation has not always been this low. With high levels of government debt and low interest rates, inflation could return in the future. Your retirement plan should take it into account.

Run Monte Carlo Simulationm

Step 3: Run a Monte Carlo Simulation and Formalize Your Plan

The final step in the process of determining your lifetime income need is to run a Monte Carlo simulation, which uses computer models to reverse engineer how much money you need – and how you should invest it – to ensure you can generate enough retirement income throughout your lifetime. The Monte Carlo simulation looks at various market outcomes and cycles, versus assuming your money will grow at a fixed annual rate.

Once you’ve assembled this information, the final step is to create a formal, professionally written, personalized retirement plan you can update over time.

If this process sounds overwhelming, don’t worry— Roosevelt Investments will be there every step of the way.

Are You Ready to See How Retirement Ready You Are?

Phase 2 Distribution

Phase 2: Distribution

If you own a funeral service or cemetery business, the distribution phase may involve a strategy session with a Certified Exit Planner.

When it comes to exit planning, Roosevelt’s goal is to help you leave your business on your terms, and we can help you facilitate the plans and processes needed to extract the wealth and value you’ve created over the years.

While succession planning is an important topic for owners preparing to leave their business, it usually only addresses one element of a successful business exit: transferring the ownership or leadership of the business to the next generation or to new owners. In contrast, exit planning is a comprehensive approach to successfully exiting your business. It includes succession planning, while also addressing a wider range of factors impacting your exit.

For funeral service and cemetery professionals, retirement income planning is all about structuring your investment accounts to generate the cash flows you need. Among the strategies Roosevelt Investments can pursue:

1. Fixed Income

Fixed income portfolios as portions of multi-asset strategies are valuable for their ability to protect principal and provide predictable cash flow.

U.S. Treasuries are the safest bonds, but they also pay low yields. Retirees may need to look further out on the risk curve: investment grade corporate bonds, municipals, or even non-U.S. bonds.

2. Preferred Securities

Preferred securities offer another income-generating alternative and are often considered ‘hybrid securities’ because of their bond-like and stock-like properties. With preferred securities, investors are promised fixed income payments over time (in the form of fixed dividends).

As with bonds, an investor in preferred securities can expect to receive regular payments over time with the full “par value” another term for principal – returned when the securities mature or are redeemed by the issuer. In some cases, the dividends are ‘qualified’, meaning that they receive special tax treatment, which can make their after-tax yield more attractive.

3. Dividend-Paying Common Stock

In some cases, the yield on common stocks can reach 4-5%, which is quite competitive in a low interest rate environment. Many of the most consistent dividend payers are large-cap or even mega-cap stocks, and those stocks often operate in global markets. Owning these multinational companies can mean giving your portfolio some international exposure, without having to buy companies domiciled in other countries—a diversification perk. Of course, owning common stocks can expose an investor to the risk of a declining stock market.

Taxes Also Play a Role in How You Generate Retirement Income


Most retirement strategies also involve some level of tax strategy. The table shows different ‘pools’ of money that can be utilized to generate retirement income. With the right plan, a retiree can have greater control over their income tax liability.

Missing from the list is Social Security Income, which may be taxable for some retirees. Social Security income becomes taxable when you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return). According to the IRS, you will pay tax on a maximum of 85% of your Social Security benefits.

Retirement Chart

Missing from the list is Social Security Income, which may be taxable for some retirees. Social Security income becomes taxable when you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return). According to the IRS, you will pay tax on a maximum of 85% of your Social Security benefits.

Your Income Needs and Tax Situation Will Determine How You Structure the Sale (or Exit) of Your Business, and How You Invest.

Roosevelt Investments Can Guide You.

Accumulating Assets and Building Wealth

The Final, Most Important Step: Determining Your Asset Allocation


Going through all the above steps—and determining your long-term financial goals, objectives, and tolerance for risk—will ultimately determine your portfolio’s asset allocation over time. This ongoing asset allocation decision is the most important one your advisor will make with you, and Roosevelt Investments has the experience and expertise to get it right.

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