It’s a Personal Journey
Planning for Retirement Involves More than Just Figures
What do you envision for your life after retirement? Is it golfing every day? Traveling to far-off places? Spending quality time with your grandchildren? Perhaps you’re dreaming of finally buying that lake house you’ve always desired but never had the time to pursue. How can you turn those dreams into reality?
by Craig Greenway, CPA, CFP® | Contributor
Years ago, there was a well-known advertising campaign that asked, “What’s your number?” referring to the amount you need to save to sustain you through retirement. This mindset, however, is quite limited. Transitioning into retirement involves a significant shift in perspective, one that necessitates an evaluation of lifestyle changes, not only cash flow. I believe it’s not merely a financial undertaking; it’s a deeply personal journey. It brings me joy to connect with families to truly understand how to guide them in achieving their aspirations. I strongly advise assembling a team to ensure preparedness for the future. With over three decades of experience as a wealth advisor, I have supported clients through this journey, always conscious of the need for financial, tax, estate, and insurance planning to align with the same objectives.
Retirement is often idealized, making it essential to have an advisor assist you in realistically assessing your situation. Many people discover that they are less prepared than they had believed, emphasizing that retirement planning should begin as early as possible. By the time you are 10 to 15 years away from retirement, it’s crucial to scrutinize your financial resources and determine how they can support you during your golden years. Ironically, this period often coincides with individuals reaching the peak of their careers and potentially overspending. Many think they have worked hard enough to deserve some indulgence. However, it is precisely at this time that accumulating savings and minimizing expenses is vital. Retirement costs can frequently exceed expectations, making it essential to work towards what I refer to as “retirement savings targets.” It can be quite a harsh awakening to realize just as you wish to retire—or worse, shortly afterward—that you haven’t saved enough.
Often, it’s unexpected challenges that can most impact one’s retirement savings. An unforeseen health condition can lead to significant financial repercussions. Considering the ongoing uncertainties in the political landscape surrounding healthcare, this remains a crucial variable. Will you need to make provisions for aging parents? With life expectancy increasing, your parents may outlive their financial resources, and if you live to 100, your funds might need to last for up to 35 years post-retirement. That’s quite a while.
Retirement should be a fantastic reward for your hard-earned career, and I certainly don’t want to dampen that prospect. It can indeed be everything you hope for. I find great fulfillment in discussing plans with clients, and by actively listening to them, engaging with their families, and collaboratively establishing a roadmap, we have often transformed their retirement years into some of the most rewarding chapters of their lives.
Craig Greenway is a Managing Director at SFMG Wealth Advisors. He brings over 30 years of expertise in offering clients advanced wealth management and tax guidance. Reach Craig at craig@sfmg.com or 972.960.6460.
Top Considerations as you Plan for Retirement
1. Cash Flow – Assess your pre-retirement lifestyle and what you expect post-retirement (and the associated costs). What will be your income sources?
2. Potential Risks – Long-term care needs, potential disabilities while still working, caring for aging parents, and other factors can significantly influence your retirement. Incorporate these possibilities into your plan and discuss them with your advisor.
3. Leaving a Legacy – Think about how much you would like to pass on to your children or charitable organizations. Is this feasible considering your own needs?
4. Spouse and Family Vision of Retirement – Ensure that you, your spouse, and potentially your adult children are aligned in your retirement vision. Discussions regarding downsizing, traveling, or making significant purchases should involve everyone.
5. Changing Tax Environment – Look for opportunities to lessen your tax burden. For instance, transforming funds into a Roth IRA provides greater cash flow flexibility during retirement and leftover funds can benefit your children.
NOTE: Please consult with your tax and/or financial advisor before implementing these recommendations. SFMG is not a CPA firm.
