Slaying the Retirement Dragon

RetirementReaching retirement and maintaining your lifestyle in retirement is the functional equal of St. George slaying the mythical dragon. We recently completed work on an E-book titled “9 steps to Slaying the Retirement Dragon”. Since the founding of our firm in 1982, individuals planning for retirement have been prevalent. This E-book provides a systematic overview of the issues and solutions to those in the “run-up” phase prior to retirement. The link below will take you to this E-book.

 

Slaying the Retirement Dragon

 

Maintaining Purchasing Power

Each and every day for the next 15 years or so, about 10,000 baby boomers will turn age 65. While this is viewed as “normal” retirement age, the average age of retirement in the U.S. is actually closer to age 62. Presumably, this is a function of early Social Security benefits being available at that time. Regardless of the age, the overarching goal in retirement is to have sufficient resources to last a lifetime. The secondary objective is to maintain purchasing power during retirement. This is where most planning fails. As we often express to clients, we are not as worried about the first year in retirement as we are the 21st year. With a 3% inflation rate, living costs will double over 20 years.

 

Start with Planning, not Products

The first principle that we discuss in the E-book is to “Start with planning, not products.” Retirement is dynamic.  Goals, constraints and other concerns are often in a state of flux. The traditional financial services firm is focused on immediate investment product “solutions” much more than they are on planning. The irony is that several studies, including a recent white paper by Vanguard (The Value of Enduring Advice), estimate that fully half of the value of advice is attributable to planning and behavioral coaching.

The reason investors look for “investment solutions” or products in the first instance is because they are desperate to make some particular short-term problem go away. Believe me, the brokers and insurance wealth managers know this all too well and are happy to oblige. Much like when we try to “solve” a medical problem with a pill, these product “solutions” can actually end up being detrimental to longer-term concerns. Stop searching for the perfect investment solution and focus instead on planning. Ready for a real conversation?

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