Retirees

Retirement is your time to pursue your passions and reclaim your freedom. But as you enjoy your independence, questions about your wealth will arise from time to time—especially as personal circumstances or the markets change. 

We help retirees relax in retirement by taking care of the heavy lifting: monitoring their accounts, managing withdrawal rates, keeping an eye on tax changes, and more. 

Retirees often come to us wondering:

• Who will assist me if I need help managing my finances or care?
• Where will I live if I can no longer care for myself?
• Am I taking on too much or too little risk with my investments?
• How will I stay independent if I can no longer drive?

We help retirees feel confident that their wealth will support their needs in retirement, while thinking through their future care needs, greatest goals, and legacy plans.

For most of your life, you’ve spent money based on the amount of income you’ve earned. However, retirement calls for a (often difficult) psychological adjustment because you’ll now spend based on your needs, savings and overall comfort level.

The calculations and planning to determine if you have enough money to last can be a complicated exercise. The income you need to generate from your assets is based on things like how much in guaranteed income  you have, like Social Security and Pensions, less how much your current are and what your future expenses are expected to be. Then come the unknowns of how long you will live, your health (and costs of healthcare) during your life, market and economic risks, etc. Finally, you need to make assumptions about investment returns you will need and whether the risk level to work toward achieving those returns is appropriate for you.

So the difficulty with answering this question is that there are many estimates and assumptions that are part calculations, but the answer can be as individual as your thumbprint.

If you feel that you may need some help with this, let’s have a conversation. This is what I do every day and I am happy to discuss you situation to see if we should work together.

The old conventional wisdom was that you should invest more conservatively as you age: meaning the percentage of equity holdings (stocks) invested in your retirement accounts should decrease. This strategy is implemented in an effort to reduce risk, which is especially critical as soon-to-be or current retirees may lack the luxury of waiting out a market bounce-back following a dip.

However, one of the biggest risks to a financially successful retirement is Longevity Risk. With the general trends that we are living longer, Longevity Risk is considered a risk multiplier. The longer we live, the more we are exposed to the other risks like Inflation, Interest Rate, Health Issues, Sequence of Returns, Market Volatility, etc.

Proper income and investment planning can help focus on how to position your portfolio. The amount of risk you take in your portfolio will be a balance of your Income needs, your liquidity options, the potential effects of various inflation rates and interest rates could have on your financial situation. The other important consideration of your strategies will most likely include how you feel about risk and what adjustments you make based on your emotions.

In 1994, financial planner William Bengen published a study in the Journal of Financial Planning suggesting that retirees could withdraw 4% of their retirement savings annually, adjusted for inflation, and have a high probability of not running out of money over a 30-year retirement period. Bengen's research focused on historical market data and aimed to determine a safe withdrawal rate for retirees.

While the 4% rule has been widely used as a benchmark in retirement planning, there are criticisms and considerations that make it a potentially risky approach:

• Market Variability
• Longevity Risk
• Inflation
• Changing Economic Conditions
• Individual Circumstances

 With the advent of more sophisticated tools and more academic research since his publications, many of the Retirement thought leaders have taken issue with the blanket calculation of the 4% rule.