John and Mary (both age 65) have $1,000,000 in total IRA and Non-Qualified Assets.  They want to take 4% in income or $40,000 per year to go with $40,000 in Social Security payments.  Their total income is $80,000.

Their current portfolio is 60% Stocks (S&P 500) and 40% Bonds (mixed).

PLEASE CONSIDER THESE QUESTIONS BELOW ABOUT WHAT COULD POSSIBLY GO WRONG:

1. If either of you had a serious medical complication how would you pay for it? Circle one or more.

a. Existing investments

b. Existing income

c. Long Term Nursing Care insurance

d. I could not afford to pay for it 

2. If either of you had to go into a Long-Term Nursing Care facility, how would you pay for it (cost $3,000 to $8,000 per month)? Circle one or more.

a. Existing investments

b. Existing income

c. Long Term Nursing Care insurance

d. I could not afford to pay for it 

3. What if you or your spouse needs to go into a skilled nursing home facility and you have no skilled LTNC coverage at a cost of $8,000 per month. How would that affect your retirement and your investment portfolio?

a. Good

b. Bad

c. No Change 

4. What if during your retirement you have to take care of your mother or father in your home while you have a son or daughter living at home? This is called the "Sandwich Generation." 

a. How would this affect your retirement living standards? 

i. Positively

ii. Negatively

iii. No difference

iv. I could never retire 

5. If your investment portfolio lost 35% and at the same time you had to go into an assisted living facility or skilled care facility, how would you feel? Circle one or more. 

a. Good

b. Okay

c. Scared

d. Awful 

6. Since one of you may live to age 90 (or 25 years from now) and your 60% Stocks and 40% Bonds portfolio went down 30%-40% (like it did in the Great Recession), how would this effect your income and your current lifestyle? Choose one.

a. ____ Would not affect us at all

b. ____ Would be bad but we would be okay

c. ____ It would be terrible 

7. If you lose 30%-40% every 7-8 years like investors did in 2000, 2001 and 2002 and 2008-2009, here's what your nest egg could look like at (ex. $1,000,000 Nest Egg) at 65:

• Age 72 - 7 years - $600,000-$700,000

• Age 79 - 14 years - $360,000-$490,000

• Age 86 - 21 years - $216,000-$343,000

What would you do with your budget?

a. ___ Keep it the same

b. ___ Change it a little

c. ___ Re-do our whole budget 

Comment:  Remember, you were taking $40,000 per year out for income at 65.

8. If this happened to you (above) and inflation was 2-3% per year to erode your purchasing power, would this also hurt your long term retirement plan? 

a. ____ Yes

b. ____ No 

9. How do you pay for Planned Obsolescence expenses when: 

a. You need a new:

i. Roof?

ii. Windows?

iii. Washer/Dryer?

iv. Hot Water Heater?

v. Cars? 

Where from?

1. Existing investments 

2. Existing income

3. Long Term Nursing Care insurance

4. Borrow money/credit card 

10. What type of financial advisor would you prefer to work with (Circle One): 

a. A commission and transaction based advisor?

b. An advisor who is an employee of a major financial institution?

c. A "Call Center" advisor who works for a major institution that sells primarily Mutual Funds?

d. A Fiduciary advisor who is held to the highest standards "to always do what is in the client's best interest"?

THE KEYS BEHIND A GOOD LONG TERM PLAN ARE:

1. MAKING SURE YOUR MONEY LASTS

2. PROTECTING YOUR INVESTMENTS FROM CATASTROPHIC ECONOMIC EVENTS

3. PREPARING FOR UNFORESEEN EVENTS (LONG TERM NURSING CARE, THE SANDWICH GENERATION SITUATION, MAJOR PURCHASES, ETC.).

4. WORKING WITH AN INDEPENDENT FIDUCIARY ADVISOR WHO PROVIDES SAFETY, SECURITY AND A LOW RISK LOW VOLATILITY INVESTMENT PORTFOLIO MANAGEMENT.