Is Planning for Retirement Really That Different?

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Is Planning for Retirement Really That Different?

If you are reading this, you probably already know that we specialize in helping our clients transition into and live in retirement. But is the advice we provide really that different from a generalist advisor? We think so!

When you retire, a fundamental shift happens – you go from accumulating assets to distributing assets. This shift changes the entire planning framework and resulting recommendations.

 3 Reasons Why Retirement Planning is Different...

1. Goals

The goal of the accumulator is to maximize wealth at a specific level of risk.

The goal of the retiree 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

The greatest risk to the accumulator is job loss.  

The greatest risk to the retiree is their sequence of returns (SOR). Even if the retiree experiences a strong long-term market return, SOR is the risk that ongoing 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.

Having the right tools and strategy to adjust to a poor SOR is critical.

3. Phases

Accumulation typically has one phase – the accumulation phase.

According to the MIT Age Lab, retirement has four phases – (1) the honeymoon phase, (2) the big decision phase, (3) the navigating longevity phase, and (4) the solo journey phase.

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 financial planner than can advise when, and who you should speak with is invaluable. 

Transitioning into retirement is not only about determining how to best spend your money, but also about learning how to best spend your time. This is why we have Dana Siperstein, a Harvard trained psychiatrist, consult with clients to make the most out of their retirement.

If you would like to learn more about how we can help you retire, please feel free to schedule a "meet and greet" below. Thanks!


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