5 Key Lessons Learned in 25 Years of Retirement Planning
5 Key Lessons Learned in 25 Years of Retirement Planning
Smart Insights From Professional Advisers
By Nino Pavan, Investment Adviser, CFP | Financial Designs 7-5-19
Posted in Dinar Recaps Archives on 7/9/2019
After witnessing the accomplishments that retirement savers have achieved, and the mistakes they've made, a few helpful truths become clear.
Like most financial advisers, I’ve spent (and still spend) a good share of my time building on the technical knowledge I need to do my job. The financial industry is always changing, and it’s important to stay on top of new theories, trends and tools.
But after 25 years of working with retirees and pre-retirees, I’ve learned that experience — and a lot of listening — can be every bit as valuable. It helps me to ask the right questions, keep an eye out for potential red flags, and to understand (as well as predict) certain emotions and behaviors.
Helping clients plan for a successful retirement means sharing the lessons I’ve learned during that time. Here are five lessons that stand out:
Don’t Underestimate How Much Income You’ll Need In Retirement
It’s amazing how many people who are in their 50s and 60s don’t maintain a budget or a good idea of how much they spend each month. I get it — it’s tough to list every expense each day to determine where your money is going. But it is possible to take a simpler, more top-down approach.
Start by looking at your earnings minus taxes each month. Then subtract whatever you’re saving in investment and/or savings accounts, or even in a shoebox under the bed. The end result is what you’re spending.
It’s easy to overlook costs that come directly out of your monthly paycheck right now, including health and life insurance or other bills on autopay. And many people don’t count the money they’re giving to their kids, grandkids, church or charities.
Other expenses can just slip by, such as lunches with co-workers or a new pair of shoes. But you’ll likely have similar expenses in retirement — or maybe some new ones if you plan to travel or pursue a hobby. Building a reliable replacement “paycheck” is critical to retirement success, and the planning starts with knowing what you’re spending.
Consider Dipping A Toe Into The Retirement Waters Instead Of Diving In Headfirst
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