Bill Gates wisely pointed out that “most people overestimate what they can do in one year and underestimate what they can do in ten years.” This observation sheds new light on the subject of planning for one’s retirement. Most people rely on the assumptions of half-formed plans without really taking an analytical look at their plan for their “golden years.”
With the urgency of the now, it is easy to put planning for one’s retirement on the back burner, but taking some time to be proactive and plan for life after full-time work is so crucial. Over the course of my career as a financial advisor, I’ve come to see the value and reward in creating a sound retirement plan. Here is a quick snapshot of what retirement planning is and why it is so crucial.
What Is Retirement Planning?
Regardless of background, stage of life, or situation, everyone needs to figure out how to leverage their assets to serve them after leaving the full time workforce. The challenge is to create a plan that will allow for individuals and families to enjoy a retired lifestyle without outliving the income source.
The process of retirement planning often starts with putting dreams and ambitions into tangible and defined goals. These goals then determine the actions steps required to achieve those plans. Identifying sources of income, estimating expenses, implementing a pre-retirement savings plan and managing assets are the next steps that help guide someone to prepare for a future retirement. Thinking through the practicalities of expenses and estimated costs now can help set someone up for success in the long run.
Why Is Retirement Planning Important?
There are so many variables at play and no guarantees. It is challenging to estimate living costs; between inflation, unforeseen medical costs or retirement living accommodations. Factoring Bucket List dreams and planning for other loved ones adds a whole other dimension. Many people have a variety of income sources that they expect to support them, between employer-sponsored plans, IRA’s, and Social Security, but some of those plans don’t end up supporting retirees in the ways they expected.
This is why working alongside a trusted financial advisor can be so crucial. Everyone has a limited amount of assets and figuring out a way to best leverage that money to work for you takes strategy. At WealthPoint, we are committed to demystifying the process and looking for ways to help find the right approach for your unique situation. So many people get caught in the trap of poor planning and find themselves in financial situations that are less than ideal and would have been easily avoidable.
Who Needs Retirement Planning?
The short answer: everyone. No matter your age, stage of life, or circumstance, retirement planning should be a part of your intentional living.
- Various Ages: Many young people shrug retirement planning off, assuming that they have plenty of time to think about that later. This is simply not true! Early in their careers, people should start setting aside money for retirement. A little bit saved often and invested well can have a huge payoff. During the middle stages of an individual’s career, retirement planning might also include setting up different accounts and monitoring these investments. In the years leading up to retirement, financial assets are determined, and plans are adjusted to best support the upcoming stage of life.
- Various Life Circumstances: People with modest incomes might assume that they can’t even think about retirement savings. With modest savings, there’s less margin for error, so getting a structured plan for the future in place can provide a framework that brings clarity towards their needs. High net worth individuals have important decisions to make as well. Complex tax strategies for how and when to utilize their assets can be challenging to navigate without proper planning.
- Various Walks of Life: Each person has a unique situation with different needs when it comes to their financial assets. Whether you own your own business or have worked for the same company your whole career; whether you are hoping to travel around the world when you retire or you hope to help your grandchildren go to college, you need planning to help your goals happen. We are passionate about tailoring our strategies to fit the planning needs of each individual. WealthPoint is an investment management team that takes a holistic approach to help empower clients to make the most of their money.
What Can I Expect As an Outcome for my Planning?
While each situation is different and creating a plan doesn’t come with guarantees, taking the time to get a game plan in place is always a good choice.
For example, we recently had an individual come to us and ask us to help her figure out when she could retire. After reviewing her assets, spending habits, debt and cash flow needs, we were excited to tell her that she could actually retire now. She was eligible to draw her pension and her deceased husband's social security spousal benefit.
We then showed her how we could take her IRA money and grow it for another 10 years without touching it. By giving her access to income now, we were able to not only delay her IRA distributions but also delay her (full retirement) social security benefit until age 70 giving her the highest payout possible. To help prepare for the possibility of a nursing home, which can eat up savings very quickly, we got her an affordable long-term care policy that would protect her assets and give her a sense of security.
Who Can Help Me and How Do I Get Started?
Retirement is a great stage in life and should be enjoyed to the fullest. Planning not only helps people find the road to retirement, but it also helps them remain retired. This planning process must be done with intentionality and strategy.
Finding a trustworthy financial advisor with experience in retirement planning is imperative. Many advisors neglect a holistic approach to planning and give their clients a shortsighted plan for their future. At WealthPoint, we would love to start the conversation about how we can help you invest wisely in your future. We have tools in place, such as our Saving For Retirement Calculator that can help you start thinking about the specifics of your financial goals. A free, no obligation consultation call with one of our trusted advisors is also a great starting point. Our simple but effective approach will quickly help you determine the appropriate plan for you.
It’s so important to have someone alongside you that you can trust to help you make the best decisions for your future. Small steps today can lead to a secure and satisfying life in the future.
Paul Loyacono is the founder and managing director of WealthPoint Investment Management, a boutique investment and financial planning firm, with more than a decade of experience in the financial service industry. He works with a variety of clients in Mississippi as well as throughout the South. Many of his clients are business owners as well as individuals in need of retirement and financial planning.
Paul started his career in the insurance industry, working with Citigroup. He quickly realized that many of his clients also needed assistance with their finances and investments. To assist them with all of their financial strategy needs, he became a financial advisor. Over the course of several years, he worked with large, national firms, including Wells Fargo and Merrill Lynch, and a private firm, Stephens, Inc. With a desire to focus more on his clients’ needs and serve them objectively, he founded WealthPoint Investment Management and joined independent broker-dealer LPL Financial, one of the leading financial services companies and the largest independent broker/dealer in the nation.*
Paul holds FINRA Series 7 and 63 registrations through LPL Financial, and holds FINRA Series 66 registration through IFG Advisory, LLC and LPL Financial. He also holds life and variable annuity insurance licenses. Born and raised in Vicksburg, he enjoys working with the good people in Mississippi, as well as throughout the South. He enjoys spending time with his wife, Kati, and their three daughters. When he isn’t working with clients, he spends much of his time outdoors, whether he’s golfing, playing tennis, or duck hunting.
*As reported in Financial Planning magazine 1996-2018, based on total revenues.
WealthPoint Investment Management
141 Township Avenue, Suite 303
Ridgeland, MS 39157