By Landon Yoshida, AIF, CRPC, Vice President Wealth Management and Principal, and Laura DeVore, Financial Advisor —
The first discussions we have with our clients often center around their plans for retirement.
In these conversations, we talk about many topics, including their goals, concerns, wishes and fears. What financial concerns keep them up at night? “I just don’t want to run out of money,” some say. “I don’t want to be a burden to my family” or “I want to maintain the same lifestyle for the rest of my life” are other popular responses.
While each concern and goal might sound similar, the mental and emotional places that each client comes from are truly different in terms of money. Looking deeper into these statements, we find that everyone has a “money-personality” and a “money-story” in their lives. We believe our individual personalities make us unique, and that extends to how we view money as well.
Years ago, the analysis of a family financial plan consisted of a spreadsheet with bar graphs. Many advisors would calculate an amount that can be withdrawn regularly and that amount would remain the same throughout the client’s retirement. The analysis was based on average rates of return and projected annual spending. We at Apriem believe that is insufficient.
A retirement analysis must be comprehensive and it has to take in into account multiple factors, including inflation, varied investment returns and longevity of life. Additionally, advisors must ensure that taxes and estate planning are addressed every year. After all, retirement is not a single phase in life. Within retirement, we believe that there are three distinct chapters: the Go-Go Years, Slow-Go Years, and No-Go Years.
Here’s an example…
You finally retired, and after a long, hard-worked carteer it’s time to have fun. You’re healthy, and it will cost a little more to travel and enjoy these first years of retirement. Perhaps there are projects around your home that need attention or renovation, and after decades of putting them off, the time has finally come to re-do your kitchen, backyard or master bedroom. Whatever it is, you will spend more money than when you enter the Slow-Go Years.
At this second stage of retirement, you’re happy and content being at home. Travel expenses are reduced and you do not spend as much money as in prior years.
However, when you hit the No-Go Years, you don’t want to leave your house and you need more help – which unfortunately costs more money to stay in your home. There is also increased potential for assisted living, senior housing and increased medical bills. Sadly, your sight will fade, teeth will fall out and you won’t be able to hear as well anymore. Remember, glasses, dental implants and hearing aids cost a lot of money – and are not covered by Medicare!
Our goal is to serve our clients well, caring for them as members of our family. After we gather more than 400 data points to build the average financial plan, clients find our deep dive extremely helpful. The interactive planning experience addresses many financial “what ifs” and provide peace of mind for all involved.
By spending time with our clients every six months, revisiting their financial plan, they are ready to move through the three chapters of retirement.