Is financial planning all there is to preparing for retirement? As an AgingOptions blog reader and radio listener, you know the answer is, “Of course not.” Yet the way many people behave, you would think all you need to retire successfully is a pile of money. The truth is, we know many who have retired happily with modest means, and others who are financially well-off but whose retirement years have proven disastrous for themselves and their families. The difference, we believe, is comprehensive retirement planning.
Retirement Planning: Your Financial Adviser May Not Be Telling the Whole Story
We were encouraged recently to run across this article on the Kiplinger financial website that appears to agree. “Many financial planners are great at managing investments but fall far short on other critical areas of retirement planning,” the article states. “Have you ever had the nagging feeling that there’s a lot more to retirement planning than what your financial professional is providing?” The column, written by Austin, Texas-based financial planner Michael Reese, sounds like Reese may have tuned into Rajiv Nagaich’s AgingOptions radio program! “Maybe you heard someone on the radio about retirement advice,” he writes. “And now there’s this worrisome question pinging around in your brain: Why hasn’t my adviser been talking to me about any of this stuff?”
While Reese’s column doesn’t cover all the bases that we think are important, he does zero in on a few areas many financial advisers overlook, and he also sends a clear message to Kiplinger readers to think beyond their retirement portfolio. According to Reese, retirees should be focusing on matters such as how to maximize Social Security; how to select the right Medicare plan; how to prepare yourself and your family for your eventual declining health; and what your loved ones will go through when you die. This reflects our view at AgingOptions that a good retirement plan should help ensure that your money lasts as long as you do, that you won’t become a burden to your family, and that you won’t be forced through lack of preparation to end your days in institutional care.
Retirement Planning Means Getting To and Through Retirement
“If your financial professional hasn’t touched on these and other relevant topics,” says Reese, “the answer is simple: You probably aren’t working with someone who’s a retirement specialist. And though your adviser may have done a great job of getting you to retirement, you’re going to need a different kind of help to get you through retirement.” In order to accomplish that type of preparation, he lists five areas for which your planner should be advising you. (We can’t help noticing that three of these are financial – but nevertheless, Reese is making a valid point.) Here are the five:
- Transitioning your investments. “You’re still going to require investment help,” Reese writes. But putting money into investment accounts is quite different from taking money out. The focus needs to shift in retirement from accumulating assets to preserving them. “If you’re five to 10 years from retiring, your adviser should be reassessing your risk tolerance and reducing your vulnerability to market volatility,” he suggests.
- Creating a written income plan. “You’re going to have to generate your own paycheck in retirement,” says the article, “and that means putting together a stable income that lasts as long as you do and grows throughout time.” Reese adds that a retirement adviser who is a fiduciary can help compare various strategies and give the right guidance. Along this line, we strongly urge you to have your adviser prepare a financial dashboard for you. Contact us and we’ll explain more about this powerful planning tool.
- Working on tax efficiency. A poorly-conceived tax strategy in retirement can threaten your hard-earned nest egg, “especially if you’ve done a good job of saving in a tax-deferred account,” Reese writes. Pick a retirement planner who will make sure you get the right advice about tax rates, tax brackets, taxes on Social Security, required minimum distribution, and so on.
- Preparing for health care costs and long-term care. Here at AgingOptions, we’ve seen hundreds of retirement plans fall apart because they did not adequately address these issues, particularly long-term care. Besides helping you select from a bewildering array of Medicare options, Reese says, “Your retirement adviser also should be well-versed in long-term care coverage options, including annuities and insurance policies.” We would add the need to be familiar with Medicaid and VA benefits for long-term care.
- Protecting your legacy. Estate planning involves far more than writing a will – although millions of Americans haven’t even taken that basic step. “Most people want their assets to be distributed to their loved ones quickly, easily and privately after they’re gone,” writes Reese. “They would prefer to leave as little to the IRS as possible. Your retirement adviser should be informed about the pros and cons of wills, trusts and other strategies that affect your estate and beneficiaries.”
Retirement Planning Should Really Mean LifePlanning
Reese concludes his Kiplinger article like this: “Your retirement is likely to be 20 to 30 years or more of unemployment. Do you want to go on worrying about whether you’re getting all the advice you need?” Here at AgingOptions, we’re well qualified to take that anxiety off your shoulders. While we work with many high-income individuals and couples, our long list of satisfied clients is made up largely of average men and women who decided to follow the lead of Rajiv Nagaich and take a fresh approach to planning for their future. These retirees and future retirees came to see that retirement planning that’s truly comprehensive must include not just financial preparation but also a housing strategy, a legal structure, a medical safety net and a family communication plan. Rajiv calls this approach LifePlanning, and he wants to invite you to discover “the rest of the story” when it comes to preparing for your future.
Please join Rajiv on this journey of discovery and start the New Year right by attending a free, information-packed LifePlanning Seminar. You’ll find a calendar of upcoming seminars here on our Live Events page – simply select the date of your choice and register online, or call us for assistance. There’s far more to retirement than money. Come get the whole picture at a LifePlanning Seminar. Age on!
(originally reported at www.kiplinger.com)