Overview of Goals-Based Planning Process (video)
The Current Retirement Planning Landscape
The majority of your working years have been spent building your savings with the goal of a confident retirement and perhaps preserving a portion of your estate for your heirs.
Our second service level is retirement planning. In addition to investment management, we provide you with detailed retirement projections that incorporate your expenses, investments, Social Security and any pensions or other income you might have.
We also take the extra step to analyze various scenarios for you. Based on your situation, these could be:
• Different life expectancies
• Maximizing your Social Security benefits
• Various pension payment options
• Paying off your mortgage, or
• Self-funding a long-term care event.
We also want to emphasize that we monitor a client’s retirement by doing a retirement projection every few years, or more frequently if a client’s situation changes. This contrasts with some advisors who only run a retirement analysis once…at the beginning of the client relationship.
Planning for retirement today is more complex and challenging than in the past. Those planning for retirement now need to take into account a 20-30+ year retirement that addresses low interest rates, long-term inflation, increasing health care costs including long-term care services, volatile stock markets and a wider array of investment strategies that may or may not be appropriate for you.
You are, of course, not alone in your quest for a long relaxing retirement. Over the years, we have helped our clients navigate their retirement concerns. Below are a few of them.
Concerns of pre-retirees:
• At what age can I comfortably retire with the lifestyle I want to enjoy?
• Will I outlive my resources?
• Are my retirement goals feasible and what do I need to do to accomplish them?
• Is my portfolio set up to address longevity risk?
• How do I maximize my income streams (e.g. Social Security, pensions, etc.)?
Concerns of retirees:
• How much of my savings can I spend without compromising my retirement plan?
• How and when should I withdraw from my portfolio in order to minimize my taxes?
• When and how should I reposition investments to generate income, especially in a low interest environment?
• Are there steps I could be taking to preserve my savings from loss?
Helping You Take Control of Your Retirement
Many of our clients come to us saying, “I know I should have a retirement plan, I just don’t know where to begin.” Or, “I had a retirement plan, but my life has completely changed, and I don’t think my plan still makes sense.” Or even, “Me? I don’t need a retirement plan. I’m never going to retire.”
The truth is, at some point everybody is going to retire. And we believe the best way to approach the inevitable is with confidence, supported by a goals-based retirement plan that leaves you feeling good about where the future will take you, regardless of where you might be now.
That’s why our goals-based process focuses first on answering the question, “What do I want my retirement to look like?” Once we have a clear idea of where you are now and where you want to go, we can create a customized retirement strategy and provide recommendations that enable you to say, “You know? I’m heading in the right direction. I’m going to be OK.”
Learn more about goal-based retirement planning.
Our Retirement Planning Process
Below is an overview of our retirement planning process, imbedded with some of the questions we can help you solve as you plan for and implement your retirement.
1. Gather all relevant data regarding your financial situation.
This includes your Social Security/employer/government/military benefits, your investments and other assets and liabilities, business ownership and succession plans, basic health information for you and your family to determine longevity, current income, savings, expenses and retirement budget, life and long-term care insurance policies, potential inheritances, etc.
• Should I be saving more for retirement? If so, where should I put the extra savings?
• What if I end up not inheriting any money – how will this impact my retirement?
2. What do I want my retirement to look like?
We encourage our clients to start out with defining their ideal retirement goals. We then ask them to determine their acceptable goals if some of the ideal goals are not attainable.
• Rather than leaving money to my children/grandchildren when I pass, can I gift it to them earlier and still have a successful retirement?
• Should I prepay my mortgage before retiring or in retirement?
3. Develop and quantify your goals further. Prioritizing them into needs, wants and wishes.
• I’m not really sure how much I will need in retirement, can you help?
• How much can I bequeath to my kids and charity without impacting my plan?
• Are we able to purchase a vacation home?
4. Research and analyze your options regarding all available income streams.
• What are the Social Security maximization strategies available?
• When should I take my pension, and which survivor benefits should I select to help protect my spouse?
• Should I consider a lump-sum rollover of my pension?
• What are my options if I want to create an additional income stream in retirement?
5. Analyze your current portfolio and risk to determine if changes are needed.
• How much risk should I take during retirement?
• What happens if my portfolio’s returns are higher/lower than expected?
6. Scenario planning
• As a business owner, help me understand how the sale of my business impacts my plan?
• What is the least amount I could sell my business for and still have my ideal retirement?
• Do I need to consider downsizing my home?
• How does a long-term care event impact my retirement? Do I need long-term care insurance?
• Should I terminate my life insurance coverage in retirement? Is our plan dependent upon it?
• How does higher/lower inflation impact my plan?
• Can my retirement plan sustain a market downturn?
7. Retirement Plan Monitoring
To help ensure a successful retirement, we strongly recommend updating your retirement plan every few years , or as major life events occur. When we update your plan, we re-evaluate your situation and do additional scenario planning, if needed, to help you understand what impacts your plan and what you can control.
We know planning for and transitioning into retirement can be a stressful experience for some. As Certified Financial Planner™ practitioners, we have developed and refined our retirement process to be flexible enough to accommodate a wide variety of factors and concerns.