Part 1: Developing A Long-Term Plan For Your Retirement

Getting Started With A Goal Typically, a 65-year-old couple has a joint life expectancy of about 30 years. That means there is a high probability that at least one of them is going to live to age 95. They are going to need a long-term retirement plan that gives them the confidence about the future […]...
David Roberts
July 27, 2021

Getting Started With A Goal

Typically, a 65-year-old couple has a joint life expectancy of about 30 years. That means there is a high probability that at least one of them is going to live to age 95.

They are going to need a long-term retirement plan that gives them the confidence about the future that they want.

For those currently planning for retirement and developing their long-term plan, there are generally three big questions to be considered:

  1. What is most important to you personally and financially?
  2. Do you have the right financial plan and savings to get there?
  3. How will you stay on track to the end?

In this first article of a three-part series, I’d like to look specifically at question #1 – what is most important to you, both personally and financially?

An effective financial plan will reflect your life and financial goals.

  • What do you want to achieve? 
  • What are you concerned about?
  • What do you want your future to look like?

The problem, however, is that many of your goals will happen so far into the future that it’s easy to put it off these questions until it’s too late to form an effective plan to achieve them.

Many of your goals can be anticipated early on, and a Financial Planner has the skill and means to help you clarify, prioritize, and address them – arriving at a clear and flexible path forward. So, it’s wrong that anyone should have to enter their golden years knowing they didn’t do what they could have to effectively prepare for what is most important.

What Are Your Obstacles?

If you haven’t been working with a Financial Planner or Coach – I get it – this is no easy task to tackle on your own. While you’re busy with your family, career, and life, your time gets gobbled up by what’s right in front of you in the moment. Additionally, there may be obstacles slowing you down or preventing you from planning for your goals:

Blindly following “rules of thumb” – Sometimes this can actually make things worse for you given your unique situation. You’ve likely heard about the “safe” 4% withdrawal rate from a “moderate” portfolio (60% equity assets and 40% fixed income assets) that will allow you to pay for your retirement without running out of money. However, research commissioned by the Alliance For Lifetime Income shows that blindly following this rule of thumb will be costly for some retirees – they will run out of money before the end. The research done by Colin Devine and Ken Mungan credits longer lifespans, healthcare, inflation, and the timing of market volatility as the main culprits working to defeat this decades-old rule of thumb.

Conflicting messages about what works – Financial analysts and the news media have plenty of advice about what you need to do with your money. Without even knowing you or your financial situation, this “help” they’re providing is likely adding to their bottom line rather than to yours. Even your closest family and trusted friends can lead down the wrong path. The problem with their advice is that they only know and have experience with their own finances – not yours.

All this financial information coming your way is just “noise” which can leave you vulnerable to psychological changes and irrational behaviors which can handicap your long-term plan and negatively impact your financial wellbeing.

Burdened with unhealthy financial “scripts” affecting your money decisions – “Scripts” are our unconscious beliefs and feelings about money. They are formed during our childhood through associations with family and friends, and they drive our emotions which help to shape our financial wellbeing – for better or for worse. They directly affect our judgments and decisions about how we handle our money.

Frequent characters in our financial “scripts” are emotional biases and cognitive errors. In my article “Market Timing Has Always Been A Terrible Idea,” I cover some of these and how they affect investors’ behavior with their money.

One of the biggest challenges Financial Planners face when helping clients is to educate them about and help them to manage the behaviors that could prevent them from planning for their goals. For the current or future retiree, failure to do this can be painful:

  • Prolonged uncertainty about whether you will be able to achieve your financial and life goals.
  • Missing out on the moments in your life that would otherwise bring you joy, because you fear that if you spend your savings, you will run out of money before the end.
  • Paying too much in taxes over your lifetime or transferring your tax burden to your heirs who may not be able to handle that very well.
  • Ending up with less money for your retirement, heirs, or the causes you believe in and want to support long after you’re gone.

What Is Most Important To You?

For you to have a long-term retirement plan that gives you the confidence about the future that you want, you are going to have to find a way to get your planning started as early as possible. Today is a great day to start! You’ll also have to identify, overcome, and/or prepare for the obstacles which can hinder the success of your plan – possibly derailing it before the end. Most importantly, for your plan to have a solid foundation, you will have to continually identify and develop what’s most important to you.

I can help you clarify, prioritize, and address a wide variety of financial and life goals covering several important areas:

VisionLifestyleTaxes
ValuesBusinessHealth
EducationRetirementPhilanthropy
FamilyProtectionLegacy

We will work together to answer the question at the beginning of this article:

“What is most important to you personally and financially?”

I know you want to have every opportunity to achieve financial success. Through careful planning, regular communication, and ongoing education, I will help you to stay focused on the plan we set up – a retirement plan built on the solid foundation of your goals.

I hope this information has been helpful for you. I am happy to answer more questions or to help you design a financial plan that will give you the confidence about the future you want. Working with me is easy:

  1. Schedule a phone call
  2. Get the right financial plan for your situation
  3. Keep your plan on track with ongoing support from me
What Accounts Should You Consider If You Want To Save More?

What Accounts Should You Consider If You Want To Save More?

Investors often ease into their savings strategy with small investments into their 401(k) plans. Later, as their finances allow, they “graduate” into other investment vehicles for their retirement nest eggs, such as IRAs and taxable accounts. As their financial lives become more complex, many investors will ask, “If I have a fixed sum of money to invest every month or every year, what accounts should I consider if I want to save more?”

Will Your Social Security Benefit Be Reduced?

Will Your Social Security Benefit Be Reduced?

Choosing the optimal time to start receiving your Social Security benefit is an important step toward ensuring that your retirement income and savings will last throughout the rest of your life. No one wants to leave benefit dollars on the table due to a poor timing decision, not even those who have adequate savings and pensions and are not relying upon Social Security to fund their retirement. The problem folks are facing, though, is that choosing an optimal time to claim their benefit is neither simple nor straightforward.

A Guide to Setting Goals for Your Retirement

A Guide to Setting Goals for Your Retirement

Are you wondering how to set yourself up for retirement? Thinking you've reached the retirement age? It's important to take the time to make sure you can enjoy the next phase of your life. Ensuring you do the right financial planning for retirement is essential, and...

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Many have no financial plan for retirement. At Plan For Your Goals, my mission is to help both the newly retired and the nearly retired take control of their finances with an evidence-based plan so they can retire with confidence.

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