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Today, every American must assume responsibility for developing a personal retirement plan. That’s why planning is so critical.
For most of us, retirement is something we must actively plan for and save towards. Yet the majority of Americans typically don’t know how much to save and don’t save enough. Moreover, retirement today is more than just a matter of accumulating enough money. Increasing life expectancy has made retirement an extended stage of life. People can expect to spend 15 to 35 years or more in retirement. That’s a long time.
How Much Money is Enough?
Most people save money for retirement with no idea if they are saving enough. Retirement planning should begin with the question, “What is your vision and goals for retirement?” Once a target has been established, the process of getting to that target is much easier.
It is important to also consider more than just financial resources when developing a retirement plan. As is the case in all phases of life, insurance is a foundation which can protect those assets from surprises along the way.
Team Oliver considers all financial resources, insurance coverage, and most importantly personal goals when developing a retirement plan. The retirement plan considers inflation, potential investment outcomes, and illustrates them in an easy to understand format.
What are the Biggest Risks in Retirement?
One of the greatest risks for retirees are poor market performance right before or after retirement is to occur. When this happens near retirement, the distributions taken from for living expenses require the selling of investment assets when their value is lower, thus requiring a larger number of shares to be sold than when the market was higher. When the market recovers at a later time, the portfolio has less shares than otherwise would have, and therefore can significantly reduce the amount which can be safely drawn from the portfolio later. This is so detrimental because when someone is near retirement, it is the longest period of time their assets will be needed to provide retirement income.
Another great risk is a major unexpected financial expense. This could be in the form of a major illness, lawsuit or death which lowers or eliminates a regular pension payment. These risks can be lowered through the purchase of insurance coverage. Proper insurance planning can reduce these catastrophic risks for a very reasonable premium. It is important to consider all of the factors in your situation, because there is no one-size- fits-all approach. If one of these catastrophic events occurs, one or both retirees can be left with little to no assets to survive on.
There are numerous other considerations when developing a retirement plan. Click here to see how Financial Life Advisors approaches the financial planning process.
• Set realistic financial and personal goals
• Assess your current financial health by examining your assets, liabilities,
income, insurance, taxes, investments and estate plan
• Develop a realistic, comprehensive plan to meet your financial goals
by addressing financial weaknesses and building on financial strengths
• Put your plan into action and monitor its progress
• Stay on track to meet changing goals, changing personal circumstances,
changing stages of your life, changing products, markets, and tax laws
smart financial decisions.
We strongly urge you to involve us so we can make sure that your current financial decisions have a positive impact on your longer term retirement plan.
Contact us today for a complimentary consultation.
This firm is not a CPA firm.
Financial Life Advisors (FLA), a Registered Investment Adviser, and Jim Oliver & Associates, P.C. (JOA) are under common ownership and control. Team Oliver is used to describe collaborative services of both firms. Professional tax services are provided by JOA and investment advisory services are provided by FLA, each under separate agreements.
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