What All Financial Advisors Should Do (but Don’t): Plan Your Retirement Income and Expenses
You shouldn’t go into retirement blind. That just leads to anxiety about whether you’re spending too much (or maybe not enough). If you’re working with a financial advisor, they should be instilling confidence that you will be OK because you have a detailed plan—a blueprint for your retirement.
To help you understand how a financial advisor should help you in this area, here’s how we would work with you to help create a retirement that you feel good about:
Enjoying Today, Saving for Tomorrow
You need to save for retirement, yes—but you also need to enjoy life right here and now. We see our role as empowering you to live your best life today while planning for a great tomorrow.
We analyze your numbers while you are still working to find the balance between enjoying life to its most now and saving so you can still enjoy life to its most in retirement. We help create a schedule for contributions to savings and investment accounts without sacrificing your current needs and goals.
And because there’s no escaping taxes, we analyze the most tax-efficient manner to contribute to your various accounts.
Planning for Retirement Income
An income plan is essential for your retirement. We review your projected retirement income sources, including pensions, Social Security, deferred compensation, rents, and annuities.
Once we know what you can reliably expect, we analyze how much you need to withdraw from your retirement accounts to make up for any shortfall or satisfy RMD rules. The focus is tax efficiency and sustainability—you shouldn’t worry that you are paying too much in taxes or drawing down your accounts too quickly.
Planning for Cash Needs
Sustaining your investment accounts is essential, but liquidity is important too. You’ll face short-term expenses, both expected and unexpected, and larger purchases, like a new car or second home. We help determine how much cash to have on hand to meet these needs.
Final Thoughts
Your financial advisor should help you plan for retirement well before retirement begins. This includes not only financial analysis but also lifestyle expectations. What do you want to do in retirement? What will be your hobbies? Your bucket-list dreams? These should all be accounted for in your retirement plan.
This plan isn’t a “one and done” deal either. You and your advisor should review the blueprint throughout your working years and into retirement. Your life and goals will undoubtedly change; your salary may increase; you may gain or lose an income source. These all affect your retirement plan and should be accounted for as they happen.
If your financial advisor isn’t doing these steps, it may be time to find someone who will.
If you're interested in reading other articles in our series on what all financial advisors should do (but don’t), check out:
Our Greenwood Village, CO fiduciary financial advisory firm offers a complimentary 15-minute call. We can briefly discuss your financial situation and concerns and share how we may be able to help.
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