When people think of retirement, it typically evokes a mixture of emotions, specifically in the financial planning arena. When determining which plan may be best suited to you, many advisors may try to simply look at the balance sheet and cash flows; however, they often fail to take into account the whole person. Often, my clients wonder, "What are the activities and goals in retirement that will fill the void of time that work once filled?" Robert Powell, author from MarketWatch discusses the importance of this notion by building a psychological portfolio along with a financial portfolio, and, to do so, far before retirement. In fact, Powell sites various studies that conclude: creating a financial and psychological plan for retirement gives the pre-retiree a whole plan to look forward to in the future.
Understandably, retirement may seem overwhelming and planning for it, farfetched; and those who are overwhelmed by retirement planning in their early years should stop and take a singular step toward uncovering how to improve their financial literacy. If you are unsure of where to begin, simply having a conversation about your current financial situation and what goals are coming up is where the process starts. Your advisor should have a good insight on how to help you save on taxes, generate more income, and provide long term solutions.
It is always easy to talk about what needs to happen, but, after doing so, take a moment to talk about what you WANT to happen. Your advisor should talk with you about what you want to have happen and should know what motivates you. This will allow for a comprehensive, co-authored plan that takes into consideration what goals you need met, as well as what goals you want to accomplish. Retirement planning isn't solely about mapping out line item by line item, of what, when, and where; it's about dreaming about what you may want to accomplish.
Finally, don't be afraid of an unknown retirement future. Your advisor knows that retirement planning is an evergreen process and cannot be predicted to the dollar, cent, time, or place. They also understand that this is your retirement, and you deserve to live it how you wish, and know that you (will) have worked hard to make it happen. So, no matter what your age, take the first step and have the conversation. You may find yourself on a path with the two factors critical for a wonderful retirement, "much to live on and much to live for."
Caroline Hill, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).