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3-2-1 Newsletter (3-12-2020) Thumbnail

3-2-1 Newsletter (3-12-2020)

5-Minute Read

Just like that, it’s Thursday. We hope everyone is having a great week and ready to start the weekend on the right foot. We’ve got a roundup of 3 insights, two findings, and one action. Enjoy!


I. 4 common money mistakes pre-retirees make

Nearing retirement, your thoughts start to drift farther and farther away from the job at hand and closer to what you’ll be able to do in all that free time: catch up on some reading, enjoy an afternoon on the back nine, or travel the world with your husband or wife. But as you get closer and closer to your retirement party, it’s important to stop and assess your readiness for retirement. We’ve rounded up in a video below the four most common mistakes soon-to-be retirees make regarding their money, so you can prepare now to make your transition into retirement a bit smoother. 

Watch the video

II. Common estate planning myths

There is no shortage of estate planning myths, most of which are dangerous because they can prevent someone from creating one in the first place—not having a plan in place can cause problems for the deceased and those left behind.  While no one wants to leave important decisions around their family and estate to chance, it frequently happens. Most (72%) of Americans don’t have a will or trust or have out-of-date documents. Myths play a large part in why most don’t have an estate plan. 

Here are 5 of the most common myths people have about estate planning. 

Do you recognize any of these?

III. Today might be the best day to take action

Today might be the best chance you have to take action. The longer you wait, the more deeply embedded you are in your current lifestyle. Your habits solidify. Your beliefs harden. You get comfortable. It will never be easy, but it may also never be easier than it is right now. 

Successful retirements don’t just happen by chance. They require advanced planning that promotes continuous and intentional actions. These actions begin with clarifying a vision of retirement, assessing needs, evaluating resources, and creating strategies to address gaps. 

Planning your retirement will never be easy; it’s not supposed to be. But taking no action or shrugging it off to later will make it much more difficult than taking the needed actions today!

Do you know the actions to take today to achieve the retirement of tomorrow?


I. Retirees can dodge taxes on these nine types of income

Here’s a secret: In retirement, it’s less about assets and more about income. Any steps taken to increase post-retirement income will help ensure a smoother retirement. One step you can take is to reduce the amount of income subject to federal tax. This begins with identifying and prioritizing income sources that aren’t subject to federal tax. This article highlights 9 of the most common retirement income sources not subject to federal tax, from the more well-known Social Security benefits and Roth IRA distributions to the lesser-known reverse mortgage payments and municipal bond interest. 

Source: Retirees can dodge taxes on these nine types of income

II. Top 3 health insurance options if you retire early

Early retirement is a fantasy of many. And why not? You have worked long and hard to savor the time to spend your days as you choose. However, before you get too caught up in that fantasy, you’ll need to figure out how to fund retiree health care costs. Most retirees rely on Medicare to pay for a large chunk of health care in retirement, but Medicare eligibility doesn’t begin until age 65. So, if you plan on retiring before then, you’ll have to find an alternate option to pay for health care costs. This article highlights the three most popular options to fund health care costs before Medicare.

Source: Top 3 health insurance options if you retire early


I. One task you must complete to successfully transition into retirement

Well-established research indicates there are 15 developmental tasks you need to complete while still working to transition into retirement. 

We’ll look at one of these tasks for our action item this week and reveal a new one each week.

The completion of these tasks does not suggest a person should retire. However, failing to complete the tasks will put a successful transition into retirement at risk.

This week’s task is associated with planning: You need to evaluate whether the retirement plan meets the demands of personal, social, and financial changes.

Why this is important:

  1. Personal: Planning equals success. Those who plan are more successful, worry less, and even report more life satisfaction.

  2. Social: Happiness and security come partly from having sufficient income but also from replacing work with other roles and activities that provide meaning and fulfillment. A plan will incorporate the financial pathways needed by these roles and activities. 

  3. Financial: A plan will help determine what retirement life looks like from a financial standpoint, as different retirement plans can have vastly varied price tags.



Have a Question? Want to chat about it?

Get In Touch

Until next week,

Mark Sharp, CFP® RICP® EA

Mark Sharp Retirement