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Retirement Planning

How Much Money Do I Need to Retire?

Many people underestimate how much money they will need to maintain their lifestyle in their retirement years.

With life expectancies increasing, many people will spend up to one-third of their lifespan in retirement.

Active retirement planning may be one of the most important choices you’ll make, and it’s never too soon to start, or too late to make adjustments.

Factors such as inflation, a diminishing Social Security system, and rising costs of healthcare can all quickly erode our hard-earned savings.

This is why it’s essential to take the necessary retirement planning steps to prepare for these years and put your investments to work.

It’s Important to Start Early

Retirement planning familyWhile retirement may seem like it’s years away for some, taking advantage of investment opportunities early in your career could make a substantial difference in how much you accumulate.

As you get older, the number of options available to you will decrease. A solid retirement plan will help make sure you capitalize on what is available to you.

For example, in your earlier years, you may wish to take on a higher level of risk with your investments, while you still have time to make up for market downturns.

Early in your career, the biggest investment risk is not being invested at all.

As you get closer to retirement, however, you may want to select lower risk investments.

While it’s essential to take advantage of company-sponsored, tax-advantaged retirement plans such as 401(k), 403(b), 457 and Simplified Employee Pension (SEP) plans, these plans alone still may not be enough. Understanding how your plan works and making sure it’s properly invested is an important start.

Senior couple on country bike ride

Most people will need to supplement these plans with additional investment strategies to make up the difference between what these plans account for and what they will really need in retirement.

Strategies for Retirement Planning

Family retirement dinner

While a comfortable retirement is often an attainable goal, it does require some in-depth strategic planning, which includes some well-thought-out lifecycle management.

During different stages in your life, it will be important to invest different amounts of income into different types of investments in order to make the most of what is available to you.

Proper asset allocation — the concept of diversifying your investments between an appropriate mix of stocks, bonds and cash — will play an important role in this task.

While it may seem early to set aside money in your 20s and 30s for retirement, this is when the power of compounding interest can benefit you the most.

Investing even a small amount regularly can accumulate into a large sum over time.

As you move into your 30s and 40s and are more likely to be a higher earner, you’ll want to start socking away a higher percentage of your earnings. At this time in your life, we’ll also help you assess an appropriate balance of how much you should be putting away for retirement versus how much you should be putting away for other important needs, such as home buying or your children’s education.

While you’ll want to take on less investment risk with your money during your 50s and 60s, building or fine-tuning your retirement plan is critical at this point in your lifecycle. This is the time when it’s most important to realistically assess your retirement goals and whether you’ve planned appropriately to meet them.

Once you’ve reached retirement, it’s important to make sure your money not only lasts, but also continues working for you.

Contrary to what most people believe, your retirement plan doesn’t end when you start retirement. As your financial advisor, we’ll help you determine which parts of your retirement plan should be spent first, and how to allocate the remainder of your dollars.

Our Role

As an independent financial advisor, our role in your retirement planning is to help you assess your needs and goals and work with you to build and manage a portfolio based on the investment principles of asset allocation.

We will work with you to develop a plan designed to help you stay on track and maintain the discipline necessary to develop and stick with your portfolio through volatile markets.

We structure a unique asset allocation that reflects the current situation, goals, and time horizon of each of our clients.

We will also rebalance the portfolio on a regular basis as the market changes, and we reallocate the portfolio to meet changes in our client’s situation, goals, and feelings.

* Please remember that diversification and asset allocation do not guarantee a profit nor protect against loss in a declining market. They are methods used to help manage risk.

For more information about our Financial Planning Process, click here ❯

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