Fee-Only Financial Advisor Rhode Island – Eliot Rose Wealth Management

Retirement Planning – 3 Reasons to Hire a Specialist

Last updated 11/1/2023 • By Jason Siperstein, CFA, CFP®, RMA®

Expertise Matters in Retirement Planning

We, at Eliot Rose Wealth Management, specialize in retirement planning. Retirement planning is a specialty within general financial planning.

The focus is not on building credit, saving for a home, reducing student loans, nor growing a family. Those are milestones that happen earlier in life.

Retirement planning is all about the last 30 years of life.
In a nutshell, retirement planning helps you figure out how to optimally make the money you’ve already earned last the rest of your life.

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OUR TAKE: A generalist financial planner is like your primary care doctor and the retirement planner a cardiologist. Your primary care doctor has a vast array of medical knowledge. However, when you need more specific care, you seek the guidance of a specialist that focuses on that one body part.

When you retire, a fundamental shift happens – you go from accumulating assets to decumulating (living on your) assets. This changes the entire financial planning framework and resulting recommendations. It is this shift that makes the entire planning process completely different and, if you are retiring, why you should hire someone that knows the ins and outs of this new chapter.

The 3 Principles of Retirement Planning

1. Goals

Instead of maximizing wealth, the goal of retirement planning is to maximize and ensure income at specific dates. The retiree no longer has the luxury of waiting indefinitely for a portfolio to recover from losses. The portfolio becomes more than just a pool of money, but something that is tethered to a client’s life. This added dimension results in very different portfolios.

2. Risks

Instead of job loss, the greatest risk to the retiree is an unfavorable sequence of returns (SOR). Even if the retiree experiences a strong average market return, SOR is the risk that ongoing portfolio withdrawals on top of a series of early bad returns will cause the portfolio to be fully depleted before the “good” returns finally arrive to average out in the long-run.

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OUR TAKE: You want to balance living fully (spending freely) with living responsibly (not running out of money). Spending too little is just as big a problem as spending too much. We founded the Sustainable Spending Lab (SSL) to address this problem.

3. Phases

Instead of looking at retirement as one phase, retirement planners view retirement as 4 unique phases. According to the MIT AgeLab, retirement has four phases – (1) the honeymoon phase, (2) the big decision phase, (3) the navigating longevity phase, and (4) the solo journey phase. If you are interested in learning more about these phases, check out our blog article here.

Retirees typically have different goals and concerns within each phase. Therefore, it is important to revisit past assumptions. Sometimes developing an entirely new financial plan is required.

As the retiree navigates retirement, he/she will most likely require the expertise of a Medicare consultant, eldercare attorney, gerontologist, etc. Working with a retirement planner that can advise when, and who you should speak with is invaluable.

Retirement Advisors Have Specific Training

Advisors that focus on retirement must have specialized expertise in developing “paycheck replacement portfolios” and their accompanying tax considerations. Specifically, good retirement advisors have specialty in the following areas:

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OUR TAKE: Retirement planning requires a specific skillset. Look for the Retirement Management Advisor® (RMA®) credential. As you near retirement, talk to a specialist like us!

By Jason Siperstein, CFA, CFP®, RMA®

Jason Siperstein is a fee-only financial planner that specializes in retirement planning. He is based in Rhode Island and serves clients locally and across the country. Jason is called on by local and national news to share his insights.

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