I would like to ask a simple question: If you could retire and still have the same monthly income, would you? The answer from most people is “yes, absolutely”. The reason is simple: you are familiar with this. You know that you can pay your bills, go on vacation, buy gifts, travel, and still save. You have been operating under this system most of your working life.
So let me ask a second question: Why don’t you replicate this in retirement? Part of it is already in place. Social Security is the first foundational block of your retirement plan. If you are worried about the solvency of Social Security, simply plan on receiving 75% of your benefits. The next part is why most people are anxious about retirement. It is a fact that a portfolio does not give the comfort that a paycheck provides. Even the best allocations have either shown a lack of growth or volatility in the past that most cannot stomach. A simple Google search will show the impact that sequence of returns has on the income a portfolio can provide. If those negative returns come early in your retirement, the likelihood of providing the income you need is greatly reduced.
I preach that retirement is about income and a plan, not assets and a portfolio. Please understand that both assets and portfolios are still important, very much like investing during your working years. However, the priority of retirees should be creating income that both increases with inflation and will last a lifetime. It took me over 25 years to realize this.
In my practice, I always start with where you are. This is understanding both your assets and your budget. The more accurate we can get these two parts, the better the plan will be for your retirement. After this, my experience allows me to look at many what-if scenarios and determine the impact of each. The reality is that there is no magical number that will make you comfortable in retirement.
When asked “How much is enough money?”, John D. Rockefeller famously replied: “One more dollar”. He understood money. Income is a different question. When you know exactly how much you have each month, you can plan accordingly. Therefore, I leave the investments to others and focus my attention on finding the best income options for my clients. I also recognize the significant impact taxes can have on income and strive to develop plans that mitigate both the short-term and long-term effects on your income and estate. The final part of all planning I provide is to look at how Long-Term Care is covered. There are many ways to address this risk, but without a plan to deal with Long-Term Care, you do not have a retirement plan. You have a retirement dream. I look at all the options and together we find the strategy that fits your budget and needs.
I do charge for the planning I provide, but I provide a free initial consultation before I begin any plan. This allows for both of us to be clear on objectives and costs. Most of the time you can expect the plan to be around $1,000 for the initial plan and about $200 a year for the review. But I will confirm before any work is done.
I love retirement planning. Each case is a different puzzle with its unique challenges. I look forward to helping you solve your retirement puzzle.
To schedule an appointment please reach out to my assistant Morgan Wylie (828) 559-0299 or morgan.wylie@retirerm.com