I have the good fortune of meeting some great people in our community. While everyone’s situation is unique and requires special attention to to help them achieve their lifetime goals, I’ve found that many people share the same 5 primary concerns as they prepare for and transition through retirement.

  1. They fear making an irreversible financial mistake at this time in their life. They are retired or almost retired, and they are beginning to transition from a lifetime of saving to a lifetime of having to live on their savings. They realize they have less time to recover from a mistake.
  2.  They do not want to become a burden to their family either physically or financially. The unfortunate reality is many folks have had the first hand experience of having to care for a family member either physically or financially, and once they have they want to make sure their children never have to be in that situation.
  3. They don’t want to run out of money before they run out of retirement. Another way of thinking about retirement is that it is essentially like being unemployed for possibly 20 to 30 years. I’ve seen what happens when people run out of money in their 80s. They can’t afford the necessities of life and they worry about survival. This is definitely not a “Thriving Retirement.”  Having a plan provides confidence and freedom, and that’s why it is so important to create that plan early.
  4. They want to earn a fair rate of return on their money and outpace inflation with the least amount of volatility in their retirement portfolio. I’ve found that volatility creates uncertainty and for some sleepless nights. The more guarantees you can build into your plan, the more confidence you will have that everything will work as designed. We know that inflation is a real threat to ones purchasing power. It is critical when designing your plan that you assume inflation will continue into the future.  Remember it is your cash flow that will determine your lifestyle in retirement. Make sure your cash flow will increase with time to help offset the impact of inflation.
  5. They don’t want to pay more money in tax than is necessary. Most people tell me that they don’t mind paying taxes. They just don’t want to pay more than their fair share. It is important to find an advisor that understands how your investments impact your tax return. Today tax rates are at an all time low and likely to go up in the future. If your advisor is reluctant to review your tax return in conjunction with your financial plan, then it may be time to find a new advisor.