Todd's Tax Service LLC

I can help you craft a plan tailored to your own unique circumstances.

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Boomer Retirement Plan

The following "Boomer Retirement Plan" can be used by anyone 50+ to put in place a simple, almost foolproof plan that will increase the odds of a happy and financially secure retirement.
1. Get your home paid for and ready for retirement.

If you still have a mortgage, determine at what age your mortgage will go away. Add extra principal payments if  necessary to get your home paid for by age 65 (earlier if possible).

Make at least one improvement to your home every year, readying it for retirement (or sale if you plan to sell and move when you retire). No one wants to remodel or replace their furnace 12 months after they retire.

If you rent your home, incorporate the rent into your budget and be sure to allow for inflation. There is nothing wrong with renting if you prefer it. Some would argue that renting is less expensive in the long run, after all, most homeowners would agree with the notion that a home can become a money pit! There are pros and cons both ways.

2.  Review your social security earnings record and projection of benefits. 

Social security benefits provide an inflation indexed and tax advantaged income stream that you cannot outlive.

You may obtain online at if you have not already received one in the mail.

Social security needs attention and reform but the basic system is a good one. If you are self-employed and have some control over how much you pay into the system, we generally recommend paying in to optimize the potential benefits you will reap from the system over the long haul. Conversely, unless you are a great investor and astute money manager, we don't recommend some of the legal loopholes that might reduce how much you pay into social security.

If you're doing more sophisticated projections of your retirement years, try using a projected increase in SSA benefits of 0- .3%. The government has silently declared war on the middle class and has not been giving cost of living increases on SSA that match the increase in the CPI (Consumer Price Index). It's the easiest way for Congress to try to reduce the deficit and slow down the train wreck coming through Washington DC. The nominal amount of benefits doesn't get reduced (yet) but the REAL benefit declines over time as the cost of living escalates.

3.  Obtain an estimate of pension benefits available at age 65 or eligible retirement age. 

Most pension plan administrators will be happy to provide you with this information.

4.  Determine how much monthly income will be needed in retirement.

Use the budget worksheet on the "BUDGETING" page and complete it in great detail. Use past spending patterns to guide this process. Pad the numbers as necessary to make sure you don't underestimate your retirement needs. Allow for a Medicare Part B premium as part of your monthly expenses (ask for the current premium amount).

If you have "sinking funds" or "savings goals" for certain categories of expenses, you may adjust future expenditures in your budget. For example, you have an HSA account with $25,000 in it. It is safe to assume the HSA will cover part of your out of  pocket health care costs and you can adjust that amount of your monthly budget.

5.  Determine your "income gap". This is the difference between budgeted monthly expenses and income from social security and pensions.

Be sure to account for income taxes if your pension income will be high enough to trigger income tax.

6.  Come up with a plan to close the "income gap". 

If you have retirement savings in IRA and 401(k) accounts, divide your total retirement assets by the income gap to calculate the number of months you can fund your retirement. This simple calculation ignores investment fluctuations and earnings.

Consider working part-time to close the income gap and keep engaged in the workplace/community. Depending on your level of social involvement, work may be an easy way to stay engaged and earn money at the same time.

Depending on your age and financial ability, add to your retirement accounts in the years before retirement to beef up your account totals.

7.  Get a fixed income ladder started for at least part of your retirement assets.

A fixed income ladder is simply a portfolio of securities with a known maturity date that will provide a guaranteed source of funds in retirement. Certificates of Deposit and U.S. Treasury Bonds are both suitable for this purpose. 

Your ladder can be set up at a bank (inside your IRA) or through any brokerage firm (Self directed IRA).

Yes, this strategy involves spending down principal in retirement to close the "income gap" and allow you to retire and do the things that you have worked for all of your life.

8.   Get a handle on your retirement accounts and make sure you understand what you own, what the risks are, and what you are paying in fees. 

Realign your investments if you find out that you are not comfortable with what you have.

9.   Complete a basic estate plan. (See Basic Estate Plan page).

10.  Do some preliminary tax planning to gain an understanding of what your tax situation will look like in retirement. 

The tax landscape changes dramatically when you retire. (In most cases, your tax burden will drop significantly in retirement).

I can assist you in doing this if I have the information from the previous steps completed.