You’ve worked your whole life with the hope of retiring someday to pursue your dreams. Now, that someday isn’t far away. You may be asking yourself, “Do I have enough to retire?”. We need to answer that question definitively, because the last thing you want to do is pull the plug too soon. So, how do we do it?
Assessment – Where am I now?
We begin by taking an inventory of your entire situation. This includes looking at your assets, liabilities, income (current and future), insurance, expenses and overall retirement goals. Some of the questions we help to answer:
– What is my net-worth? You may have assets in a multitude of locations and don’t know what you are worth, much less everything you own.
– I have a pension plan from a current or previous employer? If so, how does it work and what are my options?
– What happens to my group benefits at work once I retire?
– How do my life insurance policies purchased years ago fit into my retirement?
– How does Social Security work, what can we expect to receive, and when do we start it?
– What are my current expenses and how will they change once I retire?
– How do we minimize taxes throughout retirement?
– What else am I missing?
Retirement Projection – Where am I going?
After we have answered the above questions, we’re able to analyze what retirement will look like for you. There are three retirement categories you may fall in:
- Steak and Eggs! I’m ahead of schedule and can retire earlier than expected and can spend more in retirement than I expected. The retirement projections show sizeable assets available to my heirs at mortality.
- Meat & Potatoes: I’m on track, but my retirement plan is a little tight. The sooner we can identify this scenario, and make adjustments, the faster we can move you up to Steak and Eggs.
- Mac & Cheese: My retirement plan is not on track and there is a definitive shortfall before mortality. Help!
Stress Test – What might go wrong?
It’s critical that our analysis include a stress test to review how your plan works if unexpected events happen. These might include pre-mature death or disability, in addition to long term care expenses later in life. No one likes surprises, so let’s prepare for the unexpected and how it never happens.
What If Scenarios
Although you have likely thought of retiring for years, chances are you have different visions for how retirement may materialize. As a result, there are different scenarios we are able to illustrate to show the impact to your plan.
These scenarios may include:
– Working longer or retiring early
– Saving more or spending less
– Earn a higher rate of return or being more conservative.
If your plan has a shortfall, the sooner we are able to implement solutions the better result you will achieve. It’s not uncommon that small changes in one or two of the items listed can realize large benefits.
Once you have a plan, implementing it properly and consistently is key. Doing this yourself is equivalent to a physician trying to operate on themselves. Hire a trusted and skilled financial advisor who will take ownership to your situation and ensure your retirement is secure.
Retirement isn’t a onetime event, but rather an ongoing process that may last 30+ years. As a result, consistently monitoring your situation and making necessary changes is critical. Changes happen rapidly and adjusting to those events could be the difference between success or failure.