You’ve Worked a Lifetime to Build Your Wealth. Here’s How to Keep It!

You’ve Worked a Lifetime to Build Your Wealth. Here’s How to Keep It!

Michael Torney, CFP®, JD, LLM (Taxation), Senior Adviser  Sat, August 20, 2022

The first half of 2022 was one of the worst starts for the S&P 500 since 1970. Many investors saw their portfolios decline by 15% or more during the first six months.  On top of that, bonds – usually a safe haven for investors – also experienced a significant decline.

For investors nearing retirement, there is a good lesson here. The skills required to build wealth are different than those required to keep wealth. Just as you had a goal to build your wealth, now you need a goal and skill set to maintain it.

To accomplish this, everyone needs a plan to address the following:

Their goals for wealth in retirement.

A spending and investment plan.

Executing the plan and adapting to any changes.

The Why of Your Wealth

This first step is the most important one.  An individual or couple needs to determine their priorities, including how they will enjoy the wealth they have built.  Most people not only want to maintain their current living standard, but also spend money on new activities and exciting adventures while continuing to support their adult children and grandchildren.

Here are some of the common ways people choose to spend their wealth, which will allow us to develop a financial plan to meet them:

Additional travel and vacations.

Contributing to a grandchild’s 529 college education plan.

Donating more money to local charities.

Purchasing a second home.

Leaving a sizable inheritance for adult children and other family members.

Making a Budget, with Room to Spare

With your goals laid out, the second step is developing a plan to pay for these items while also protecting your portfolio. Unfortunately, the trap some wealthy retirees fall into is thinking their assets – even if they have millions of dollars – will sustain them no matter what.

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https://finance.yahoo.com/news/ve-worked-lifetime-build-wealth-083005253.html