My husband and I recently met with our financial planner, John Steves. He is my fabulous former partner at Ameriprise. Yes, even though I am a Certified Financial Planner, I still have my own advisor. It keeps my husband and me disciplined. Besides, I am a ‘big picture’ person, and John is a ‘detail’ person who does the number-crunching and also has his ears and eyes on the market daily.
Having a trusted adviser is one of the very best gifts you can give to yourself. I can assist you with the big picture, the discovery process, and help you create a game plan. However, you also want someone to run your financial plan, looking at every area of your financial life, including what would happen if you died prematurely or couldn’t do what you do anymore. Too often I hear of advisers just looking at the investments or just the insurance. True financial planning includes six areas of your life:
- financial position
- goals such as education and retirement
- income taxes
- insurance and protection planning
- estate planning and planning your legacy
A great financial planner will ask you to create a detailed budget, asking when certain expenses end, decrease or increase — like college expenses, health insurance and medical out-of-pocket costs, home improvements and maintenance, and even downsizing. They will use these numbers throughout your analysis, and will calculate how taking your Social Security and pensions at different times can affect your nest egg. You will also discover how much you need to be saving TODAY.
My husband is eligible for his pension at 55 and wants to compare retiring at age 55 to age 65, as well as taking Social Security early at 62 vs. 70. I think he will find it eye-opening at the least. There is magic in knowing these numbers. With this knowledge, you can make smart choices.
When you look at your retirement plan, do any of these apply to you?
- You plan to work forever.
- You left or lost your job, dipped into your 401K, and may have even paid taxes and penalties on it.
- You aren’t saving anymore or don’t even have a retirement plan.
- You have never seen your Social Security estimate.
- You don’t understand your pension and benefit statements or even know where they are.
- You’re paying so much for your children’s college that there is nothing left for you to save for retirement.
- Your kids have moved back home after college — enough said.
- You have run up credit card debt and/or college loans and are trying to pay them off first.
- You lost a big chunk of your savings in the 2008 market crash, never got back in, and are afraid it’s too late.
- You are hearing that the stock market is too risky and that bonds are even worse right now.
- You are putting all your money into real estate.
- Your best investment is your business, so you have everything tied up in that and just pray you don’t get disabled.
- You have no idea where to start or how much you will need anyway.
If you answer yes to any or all of these, then you are not alone. According to a recent GoBankingRates survey, one-third of Americans report having absolutely NOTHING saved for retirement. As if that isn’t scary enough, 56% have saved $10,000 or less. Women have an even higher rate of not saving for retirement. A whopping 63% if women say they have no savings or less than $10,000 in retirement savings.
I believe that work is the New Retirement Solution and so do more and more Baby Boomers who are exploring their options. In an Gallop Poll, 80% of Baby Boomers approaching retirement expect to continue working after ‘retiring’ to supplement their pensions, Social Security, and savings.
The silver lining, according to research, people who continue to work during retirement often experience better health than those who don’t work. So long as the work remains low stress, retirees who continue working are less likely to suffer from major diseases such as cancer, high blood pressure, and cardiovascular disease. They are also less likely to become depressed.
This is great news…because I see many of us continuing to work by doing something we absolutely love. I call this Retiring To Something — Not From Something™. I believe that this new retirement for most of us will consist of a simpler lifestyle with less consumerism and working at something we are passionate about.
If my husband does want to retire early, we will have the numbers, and it will include going through this process…and I am sure it will include Costa Rica, Panama, golf and biking!
This certainly is a different retirement than our parents and things have changed dramatically over the last two decades. Most of the clients I work with are interested in working in retirement not only for financial reasons, but to continue doing something meaningful where they are utilizing their unique abilities, life experiences and making a difference in the world.
I see us doing this into our mid to late 70’s. Look around you and you will see many vibrant 70 year olds doing amazing things and having fun. Remember, we will probably end up living into our late 80s and 90s. The secret is creating your plan now and then taking action. This is the first of an ongoing series that will help you create that plan.
Your exercise today is to “Find Your Stuff“.
Pull together all your savings, investment, 401k, IRA, pension and Social Security Statements. Don’t delay. Please do this now before you forget. You will thank me for it!
If you are ready to Create Your Perfect Life feel free to book your complimentary 30 minute Discovery Coaching Session now at www.talkwithkatana.com