Fundamentals of Retirement Planning

Robert AlbretsonRisk Management

It would seem that high net worth individuals would need to worry and plan less for retirement than those with fewer assets.  However, properly planning for retirement is not specific to an income group and individuals at all levels face the same challenge, which is having enough income to meet their needs and desires and maintain their lifestyle for an undetermined number of years in the future. 

Only twenty-two percent of Americans are very confident about having enough money for a comfortable retirement and those with higher assets can jeopardize their legacies and futures if they don’t have realistic and disciplined retirement plans that focus on their individual objectives while factoring in risks and fluctuating market conditions.  

As you plan for retirement, here are four key things to keep in mind:

  • What Are Your Goals?  Always start with this question when thinking about your retirement planning and try to identify your primary goal.  Do you want to travel the world or just live the rest of your life comfortably?  Do you want to leave a legacy for your grandchildren?  Would you like to transfer wealth to a charity?  Do you want to stay in your current home or downsize? Your financial plan needs to match your primary goal and timeline.
  • Chose Advisors Wisely – Ensure you’re working with a trustworthy and reputable advisor that discloses all fees and obligations up front and in writing.  Also, make sure that they specialize in your particular area of need.  For example, if you are a high net worth individual, work with an advisor who is experienced and well-versed in retirement planning for the wealthy and can help you identify the right asset-allocation plan to ensure your retirement goals and lifestyle are met.
  • Beware of Leverage – It doesn’t matter if you made millions of dollars and squirreled it away for retirement if it wasn’t saved and invested strategically.  For example, did you maximize every tax opportunity?  Remember – it’s not what you made, it’s what you kept.
  • The Portfolio Mix – While you may be wealthy when it comes to shares in your company’s stock, make sure you’re not overexposed in any particular area.  Some liken it to betting on every horse – work with your advisor to put money in different buckets (i.e. – traditional 401K plans, Roth IRAs, etc.) to make sure your portfolio is diversified and your assets are protected over the long term.

Make sure your advisor helps you to think through any retirement surprises you may not be thinking of, such as medical costs, social security, taxes and the risk posed by inflation.  With the right plan, you can take the worry out of retirement and focus instead on enjoying your time doing whatever you love.  At Sinclair Risk and Financial Management, we can sit down and discuss how your employer sponsored retirement plan can best meet the retirement goals of both the owners and their employees. Give us a call at (203)265-0966 today.

Robert Albretsen

Accredited Pension Administrator

Fundamentals of Retirement Planning