At SPS, we utilize a team of outside specialists to handle the needs of our clients when required. Richard Myerson is the owner of The Myerson Agency – a boutique wealth and estate-planning agency. We’ve asked Richard to write a short piece on retirement planning.
Planning for retirement means different things to different people. In the final analysis, however, it’s the same for everyone: to provide a safe harbor of financial freedom and flexibility at the time we choose to slow down or cease working completely. That’s naturally a very relative and subjective goal, usually consistent with one’s lifestyle, income earning capacity during one’s working years, health, and outlook on life.
For almost everyone, however, the process should be the same: START EARLY! Remember the miracle of compound interest!
Your plan should contain all of the following, if not more, but these are the basics:
- Time horizon to desired retirement date
- Quantification in today’s dollars of what kind of lifestyle you wish to have at retirement
- Special needs, both planned and unplanned, that may come up during retirement
- Current investable resources and resources available over the course of your remaining working years to move toward retirement assets
- Realistic liquidity events, or possible inheritances
- An estimate of growth on invested assets during your working years, and at retirement
- An estimate of inflation over your lifetime that will naturally increase the current dollar requirement at retirement
- Make sure your investment plan is well-diversified and includes growth, preservation and protection.
- Stay the course. This is easier said than done, especially in turbulent times. During these times rely on your financial advisor to keep you on course. Remember, there has never been a storm, no matter how bad or how long, that hasn’t been followed by sunshine.
- Avoid the short-term sin of greed and it’s equally debilitating cousin, fear. If properly planned, the natural order of things will get you through the volatile periods.
- Tweak the plan as necessary, for both changes in goals, resources, and the market, but never overreact. Know that the plan includes provisions for market volatility.
- Stay healthy! This is not some sentimental rhetoric that your grandmother used to espouse. If you haven’t gotten there yet, I’m quite certain one day the light will suddenly turn on and you’ll be confronted with the following question: what is the point of building financial health if one’s physical health cannot enjoy it?