If you have ever gotten overwhelmed with retirement planning, this video is for you. In this video, we discuss a process to help you simplify your retirement planning. You will learn about the 4 “Retirement Blocks” and how you can start building a foundation for a secure retirement. Many retirement savers, they can make retirement planning complex from the start. With this process, you will learn how to visualize your retirement so you know exactly where to focus your time. We discuss your Retirement Income, Retirement Expenses, Retirement Savings, and your Retirement Lifestyle.

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Retirement planning can be extremely overwhelming and for many people they don't know where to start in this video I'm going to share a simple process you can use to simplify retirement planning and give yourself a solid foundation to work from when planning your retirement.

Hey everybody I’m Johnathan Rankin, the founder and CEO of Theorem Wealth management and my firm and I have been helping clients plan and execute their retirement plans by focusing on 3 key areas in retirement, maximizing retirement income, optimizing investments and reducing taxes. If you are thinking about retiring or already retired, make sure you subscribe so you don’t miss any of our retirement videos or episodes of our retirement podcast called the retire once show.

Building a secure retirement is like building a house that you want to last a hundred years. As someone who owns a 103 year old home, it’s important to have a solid foundation. When you start off building a home, you’re not starting by picking out the furniture. And that is the same with retirement planning. You want to start with a solid foundation and the customize the finishes. That is where we are going to start today. We are going to be going through a process for you to build that solid foundation.

These are what I like to call your Retirement Blocks. These aren’t products or services you need to go out and buy. It is really a mindset and structure for how you can plan your retirement in a way that makes it very simple. I am one of those people that when I get focused on a topic, I will end up with 50 different browser tabs going into the smallest and most detailed rabbit holes and I end up getting nothing accomplished. That is what we want to avoid. So let’s jump into how these blocks work

There are 4 Retirement Blocks that you will work with. You don’t move onto the next one until you finished the one before it. You want to go through this exercise every few months or anytime there is a change in any of your blocks. Let’s get started

The first retirement block is Income. This is where you want to take a sheet of paper and draw a line down the middle. The left side is going to be your Income Now and the Right side will be your Income In Retirement. You want to write down the sources of income streams you are expecting. Things like pensions, social security, part time work, rental income. You want to know exactly what income you have to work with. This is a way of creating a written plan for your current and future income. This may be extremely simple. You might just write down, Current Salary and that is the only income you have today and in retirement, the only income you have is social security. That’s ok, this at least starts the process of helping you understand what’s coming in.

The next retirement block is your Expenses. Same as you did with income, grab a new sheet of paper, left side, expenses today, right side, expenses in retirement. You have to know what’s coming in and what’s going out. We are not making any adjustments at this point, this is just taking inventory of where things are at. The reason these are called retirement blocks, is because they can build on each other and get more technical as you build higher. Some of the top chefs in the world who create the most amazing dishes didn’t get their start creating culinary masterpieces, they started by learning how to chop onions and cook an egg. We have to build the foundation first and build a routine around improving to the point it becomes a habit. That is when retirement planning will become a simple process for you.

So let’s look at the 3rd block. This is your savings. This is the most complex block of retirement planning because it can go in so many different directions. But our goal is to simplify how you handle your savings. After you have written down your income, your expenses, both today and in retirement, now you have a good idea of how much you can save. This is typically where all of the questions start coming in, like what type of account, how to invest etc. and trust me, we will get there. That’s why you should take a second and hit that subscribe button. This is going to be a process that we are going to build on in the videos we have coming up and you don’t want to miss those. So just like you did with your income block and your expenses block, grab a sheet of paper and put a line down the middle and a line across, creating 4 categories. The top left is Amount, top Right is Account, Bottom left is Taxes, bottom right is Investments.  the first thing you want to write down is the amount you plan on saving or are currently saving. You have to know how much you have to work with. The next question we typically get is, what type of account should I save in. This is where you want to think of accounts like buckets, first start by making sure you have an emergency fund of 3-6 months cash. Just in case something happens, you want to have funds that you can tap into immediately.  Once that emergency bucket is filled, and before you move onto saving in other account types, go back to your expenses page. If you have high interest debt, knock that out first with additional income and then come back to your savings block. I have seen so many people who insist on saving in their 401k because they are getting a match of 4 or 5%, yet they are paying 18% on high credit card balances. Not all debt is bad, but high interest debt is definitely bad.

That is why these blocks are more like a process that you want to get used to coming back to. And each time, going through the same exercise of writing down your income, expenses and savings. Once you knock out any high interest credit card debt, then move onto the next bucket which is taking advantage of your employers savings plan if you have one. Even with this account, there can be so many questions that people have, like roth or traditional, and how to invest the account. Remember, the goal at first is to just lay the foundation of good habits and a good process. This is where most people save in the traditional pre-tax 401k and many people just invest in a target date fund or index fund. That is ok, you don’t have to get complex to start. Simplicity wins every time because it builds those habits. Right now, you want to have a written plan for your income, expenses and savings. That sets the foundation for those 3 blocks. Once you have written down the amount you plan on saving or currently saving, the account types you plan on saving into or are currently saving into, whether they are pre-tax or post tax accounts and how you plan on investing them or how they are currently invested, then you can move onto the last retirement block. This block is one that is often overlooked because it doesn’t involve money, but it has a major impact on all 3 of the other blocks.

Retirement block number 4 is your lifestyle block. Just like your savings block, grab a sheet of paper and create 4 categories, Travel, Hobbies, Social, Health. This is one of the most important parts when it comes to creating a fulfilled retirement. I have seen so many people leave their job to retire, but then feel a sense of emptiness with their retirement. So in these 4 categories, you want to write down your plan for any travel you want to do, any hobbies that you have that will keep you busy. You want to write down who you plan on spending time with and what you plan on doing to build out that social life outside of work. And finally, write down how you plan on maintaining your health. Filling out this block is all about you, there is nobody that can or should tell you how to fill this one out. But it is important to have a written plan for this because every one of these aspects can impact all of your other blocks. When writing things down, you may realize that you plan on traveling more than you realized and need to update your expense block to account for that. or you realize that you just don’t have the desire to focus on your health and that is ok. I am not one of those fitness guys on youtube telling you to get off the couch and put down soda. You do what makes you happy, but you might want to account for more medical costs in your expense block if that’s the case.

Once you have these 4 pages filled out, hopefully you have a good grasp on what your income streams are today and what they will be in retirement, what your expenses are today and in retirement and what your basic savings plan is and what your plan is to maximize the fulfillment in your retirement lifestyle. Remember, the first step in retirement planning is just to start somewhere and I like to start by taking inventory of where things are at. That’s what this first step is all about

I know, there is a lot more work to be done. You’re probably looking at your income in retirement and your expenses in retirement and thinking, how am I going to fill the gap. And we are going to get there. That’s why you should hit that subscribe button and if you’re retirement is coming up soon and you want to answer those questions quicker, use the link in the description below and schedule some time with a member of our team. We will help you build out a detailed retirement analysis. If you want to learn more about the type of accounts you should be putting money into, make sure you check out this episode of our podcast The Retire Once Show, I’ll see you there,

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