Financial articles and topic discussions you find on the internet can give you some great general guidelines and ideas. However, each and every person out there has very different financial needs and lifestyle choices they make that can impact their current and future financial health.
Our practice is built on the foundation of taking the time to fully understand each of our clients individual financial goals and then tailoring a plan and portfolio to address those objectives.
Begin with a plan
Retirement is typically a time that brings major changes to your lifestyle and finances. You no longer depend on a paycheck from work. You shift to other income sources such as savings, investments, pensions, and Social Security. As you transition into retirement, it’s critical to ensure your income can support you for years to come.
This time requires a plan to effectively manage retirement challenges. The Envision planning process is the foundation for developing your retirement income plan. It can help you make informed choices and find strategies to address the following questions:
When/how can I retire with confidence?
What can I do to help make my money last through retirement?
How do I plan for and respond to unexpected events?
The Envision planning and discovery process*
A first step in developing a comprehensive retirement income plan is a “discovery” session. During this discussion we will gain a thorough understanding of your overall financial situation and what type of lifestyle you want during your retirement years.
It’s important to spend some time thinking about this. How you plan to spend your time will drive budget and spending decisions.
Analyzing income sources
While analyzing your expenses, we will help evaluate your income sources. This starts with creating an inventory of all current and potential sources.
Once we have identified your sources of income, we will analyze your income and expense information. Modeling tools within the Envision process help determine the likelihood your projected income will meet your desired spending levels.
The Envision technology will assign a probability of success score. The higher the score, the more likely you are to be able to spend according to your estimates and not outlive your assets. If there is a gap, we can suggest changes to your portfolio or goals.
Modify your investment strategy
In addition to adapting your spending, another way to help make up for an income gap is to modify your investment allocation. If your investment mix is too conservative — with an over allocation to fixed income investments, for example — your assets may miss out on growth opportunities and not keep pace with inflation and spending. On the other hand, too aggressive an approach with a heavy weighting in stocks can result in excess volatility.
An important first step before making any portfolio adjustments is to understand your risk/reward tolerance. With that in mind, we will use Envision tools to analyze ways in which your portfolio could be adjusted to help close any projected gaps. The goal is to balance your need for income in the short-term while seeking to preserve your principal to continue to generate income for the longer term.
Planning your withdrawal strategies
As discussed above, your income in retirement could come from several sources that might include:
- Taxable (brokerage and savings)
- Tax-deferred 401(k)
- Traditional IRA accounts
- Tax-exempt (Roth IRA) accounts
Planning from which accounts to take withdrawals and when to do so can be complex.
We will use Envision
tools to evaluate your investments and recommend withdrawal strategies. These strategies will consider short-term income needs, manage tax implications and maintain your portfolio allocation to be consistent with your long-term objectives.
Monitoring and adapting
Even with a comprehensive retirement income plan, markets can be unpredictable and life events can affect your spending. That’s why it’s important to monitor your portfolio and withdrawals.
We will meet with you to review portfolio performance, your spending history, and your budget and to discuss future spending plans. You’ll also talk about any changes that might require adjustments to your investments or spending.
The retirement income planning process is not a “one and done” event. It can be viewed as a circular process. The initial plan will be set based on your situation at that point in time. Over time, we will work with you and make modifications to your investments and help you make informed decisions about your spending. Together will will use Envision tools and resources to help ensure your assets will last so you can live the retirement that you’ve imagined.