FINANCIALLY
Speaking
1 .
Jeffrey M . Orth is a Chartered Financial Consultant , a Certified Advisor in Senior Living , and an Investment Advisor Representative , with over 15 years of experience as a business and personal planning , insurance , and wealth management specialist . Jeff is available for group lectures and private consultations . Visit ifitfinancial . com or call 408.842.2716 .
The author ’ s opinions , comments , information , etc . are those solely his own and are independent of , and do not represent , HTK , and should not be considered as specific investment or planning advice . Please consider your options based on your individual circumstances . Past performance is not indicative of future returns . gmhTODAY and other listed entities are independent of and unaffiliated with , HTK and Integrated Financial Benefits Network ( IFit ).
Retirement : Ready or Not
As a young man , I remember having a number of conversations with my grandfather about the importance of saving for the future — saving for retirement . Back then , retirement planning was much simpler , as the average man retired at age 65 and died 2½-5 years later . The plan was : save some money and keep it safe . How things have changed ! I currently plan on my clients being in retirement for 30 years . In some cases , they will spend more years in retirement than they did in their working years . When you need to plan for three decades of retirement , inflation becomes a much bigger issue , as your buying power erodes with each passing year . Investment mistakes become more damaging to the overall success of your retirement plan , as you aren ’ t able to go and “ earn your way out ” of the problem . Having guarantees that adjust for inflation and protect your investments also become more and more important .
So the good news is people are living longer , but the bad news is that people are living longer ! And if you are like a lot of people , you are more concerned about running out of money before you run out of life , than you are about dying too soon .
As a Chartered Financial Consultant , I always take stock of what assets my clients currently have in place and determine what a successful retirement looks like for them . Then , we work backwards from that goal and try to plan with the end in mind . To do this , we need to answer some questions that may make some feel uncomfortable , as they realize they either don ’ t know the answers , or realize how unprepared they are for retirement .
Do you have the answers to the four toughest financial questions everyone needs to know ?
• What rate of return do you have to earn on your savings and investment dollars to be able to retire at your current standard of living , and have your money last through your life expectancy ?
• How much do you need to save on a monthly basis to be able to retire at your
… the good news is people are living longer , but the bad news is that people are living longer !
current standard of living and have your money last through your life expectancy ?
• Doing what you are currently doing , how long do you have to work to be able to retire and live your current lifestyle until life expectancy ?
• If you don ’ t do anything different than you are doing today , how much will you have to reduce your standard of living at retirement for your money to last for your life expectancy ?
To answer these questions with any degree accuracy requires :
• Calculators that are sophisticated enough to handle a large number of variables at one time .
• An advisor capable of handling timing issues related to post retirement asset consumption .
A good investment plan is as much about avoiding loss as it is about the rate of return . Most people are ‘ transferring wealth ’ ( aka : losing money ) from their own estate unknowingly and unnecessarily . They are not only losing the money , but also the additional money it might have earned for them . This is called “ opportunity cost ”. There are a number of great tools currently available that are designed with loss prevention in mind . As one approaches and enters their retirement years , it becomes even more important to reduce risk exposure while maintaining healthy growth . Timing issues are critical as well in any retirement plan . Knowing which asset to use and when to use it can have a significant impact on ‘ the bottom line ’. For example , I have found that knowing when to turn on each spouse ’ s Social Security retirement benefits alone can at times make more than a $ 250,000 difference in a couple ’ s lifetime retirement income *.
Life in retirement will be a lot more enjoyable if working longer is something you do because you want to , not because you have no choice . If you are forced to stop working earlier
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GILROY • MORGAN HILL • SAN MARTIN APRIL / MAY 2018 gmhtoday . com