Helping You Plan Well for Retirement
March 19, 2025
by Adam Black
Retirement is a significant milestone in American culture – a chance to reflect on your life’s journey and accomplishments. As you reflect, looking back in the rear view mirror of your life, what do you hope to see?
This year at Bare, our theme is Year of Increase. We believe in helping you expand your vision for all that you’ve been entrusted to steward. Many of us understand the call to steward our resources, but Matthew 25 reminds us of the call to also increase what we have been given! How can we plan well for retirement and increase our resources, so that we can serve our families and communities?
Planning for retirement can feel overwhelming, but taking time to make informed decisions is the key to being set up for a secure future. Inviting a financial advisor into this process can help make the process smoother. Today, we’ll answer 3 common retirement questions, to help us all approach retirement with confidence, clarity, and a vision for increase.
- At what age should I take my Social Security?
Social Security has been a hot topic in the news recently! I’ll be the first to admit that I don’t know what will happen with it over the coming years. What I do know is that it can play a large role in any retirement plan. When is the best time to take Social Security? It varies, but before a decision can be made, it’s important to understand some of the rules.
Social Security can be taken as early as age 62. It is important to note, however, that taking Social Security at 62 will result in a reduction of your Full Retirement Age benefit for the rest of your life. Full Retirement Age for most people today is age 67, which is when you are entitled to your full benefit. The latest age that Social Security can be taken is age 70. For each year that you delay your benefit from Full Retirement Age until age 70, you will get an 8% increase on your benefit for the rest of your life as long as you were born after 1943.
If you plan on retiring on the earlier side, it may make sense to take your Social Security benefit, but if you never plan on slowing down (I’m looking at you, farmers), it may make sense to get the largest possible benefit by waiting until 70. If you have a family history of health concerns, you may want to collect earlier to get benefits for more years, but if you plan to live until 100, you will receive more money over your lifetime by delaying. Everyone’s financial, health, and retirement goals are different, so inviting a trusted financial advisor into this process can help you maximize your Social Security benefits.
- What do I do about health insurance?
For those retiring at 65 or later, Medicare most likely is the answer. After all, you have been paying into it for nearly all of your working life – you might as well take advantage of it! Medicare is made up of a few parts that each serve different purposes.
Medicare Part A is hospital insurance. It covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. Most people don’t pay a premium for Part A because they paid Medicare taxes while working.
Medicare Part B is medical insurance. Part B covers outpatient services, including doctor visits, preventative care, lab tests, outpatient surgeries, and some home health care. The monthly premium is taken directly from your Social Security benefit if you are collecting. Most people do pay deductibles and copays for services.
Medicare Part C, or Medicare Advantage, are private plans that offer all the benefits of Parts A and B, and additional services (dental, vision, hearing, etc.). Medicare Advantage plans usually include prescription drug coverage and have out-of-pocket cost limits, so it could be a more advantageous health coverage option for you.
Medicare Part D helps cover the cost of prescription medications, either through stand-alone prescription drug plans or as part of a Medicare Advantage plan.
Finally, Medicare Supplement Insurance, or Medigap, helps pay for out-of-pocket costs like copayments, coinsurance, and deductibles.
- Are my investments protected?
It’s understandable that retirees may worry whether their hard-earned nest egg will lose value, especially when they have no plans to return to work. Any investment outside of cash or an FDIC-insured product like a CD does carry some risk. Yet if all of your investments were cash, they would likely be beat out by the cost of living. So how can you ensure that your money is protected for short-term needs, while making sure it outpaces inflation and lasts a lifetime?
One of our favorite approaches is ‘segment planning,’ which involves defining how much is enough for you in each phase. The first phase aims to protect money from loss of principle that you need in the short term (roughly the next 5 years) by using products like cash and CDs. After this segment is filled, we plan for segment two which are years 6 – 10. For this segment, we often use investment products like fixed annuities or bonds. In segment three, which are years 11+, we look to outpace inflation with higher risk investments that offer a higher growth potential. These investments might include stocks, real estate investments, or growth-focused mutual funds and ETFs. We have seen the stock market grow in most 10-year windows, which gives us confidence to move forward. Even if a segment decreases in value in year one, there is time for it to recover. As you progress, funds from later segments move into the adjacent segment, ensuring that the next few years of necessary funds are available and as close to risk-free as we can get.
There’s a lot to consider in retirement, and I’m sure that this blog raised questions that I couldn’t address today. Retirement planning is a serious endeavor, and many people underestimate how impactful it can be to work with a trusted advisor. I often hear, “I wish I would’ve met with an advisor sooner,” but the key is that they are meeting with one now, instead of 10 years from now. I’d encourage all upcoming retirees to find an advisor who is trustworthy, aligns with your values, and has your best interest in mind. They will help give you confidence to step into retirement, whenever the Lord calls you into that season.