by TYLER SINCLAIR, PARTNER
The word retirement can mean a lot of things to a lot of people. For some, it conjures up images of long-awaited world travel. For others, it’s simply not working. Unique retirement goals cannot be achieved with a cookie-cutter approach. However, there are some mistakes that can thwart even the best of plans.
In the spirit of inverting the question to get to a great answer, below are some examples of what not to do in preparation for the golden years.
Retire from something instead of to something
You’ve worked your whole life for it – that first day you don’t head into the office. While this may seem like quite the achievement, we find that many clients with no plan for day two and beyond struggle when their daily routine is replaced with loads of newfound free time. This doesn’t mean you have to schedule your retirement out to match your current calendar, but studies show that active retirees have a much better quality of life. For you, that could mean spending more time volunteering, working a small part-time job, taking up a new sport or being with family.
Keep your spouse in the dark
We often see client couples who share common retirement goals, but not details on how to get there. It’s not unusual that one partner in the relationship is more involved in the family finances, but that doesn’t mean the other spouse has to be left clueless. It is vital that both partners are involved in the numbers to some level of detail. It also greatly reduces the burden on the surviving spouse in the event of an unplanned early illness or death.
Our most prepared clients work to develop a detailed action plan for their surviving spouse to use upon their passing. This includes an itemized list of accounts, contact information (financial planner, estate planning attorney, etc.) and perhaps most importantly in today’s world, login credentials for any financial information accessed via password.
Let inertia take over
Life is busy for all of us. Those nearing retirement are likely in the peak years of their career, leaving them less time to tend to personal affairs including a retirement plan and portfolio. This can mean having a “set it and forget it” approach to your portfolio allocation for too long leading to a portfolio mix that is too risky relative to the years remaining until retirement. It can also mean failing to know if your current savings rate is enough to achieve the portfolio sum required to support your desired lifestyle in retirement.
Watch too much CNBC
In the Information Age, we are bombarded with market returns, stock picks, initial public offerings (IPOs), interest rates and global economic data ad nauseam. While there is nothing wrong with being informed of current events, too much information can distract from the slow and steady discipline it takes to build a retirement portfolio and achieve goals.
The outsized returns and short-term trading ideas discussed on the cable talk shows are good for ratings, but not necessarily a disciplined portfolio. Having a comprehensive financial plan that matches your goals with a portfolio action plan may be a better way to achieve your goals.
Fail to have accountability
At TrustCore, we find that helping our clients stay informed about their progress helps them arrive at retirement more prepared. Having periodic, objective reviews of goal achievement and portfolio growth helps our clients stay on track and moving in the right direction. It also creates room for unexpected changes, both positive and negative, such as an inheritance windfall or expenses related to caring for an aging parent. A financial planner can help roll new circumstances into the current plan, working together with you to modify goals as needed.
Ready or not, we all reach retirement age eventually. By avoiding these and other pitfalls, you could have a better chance of finding yourself spending more time on the back nine or the back porch, whatever you find yourself most looking forward to.
At TrustCore, we’d love to help you avoid these and other pitfalls. Contact us to create a retirement plan that suits your goals.
TrustCore is one of the largest independent wealth management firms in the U.S. From its offices in Brentwood, a suburb of Nashville, TrustCore advises on client assets of $1.8 billion for clients in 34 states across the nation.
Financial planning and investment advisory services offered through TrustCore Financial Services, LLC. Investments offered through TrustCore Investments, LLC, member FINRA and SIPC®. This is not an offer, or solicitation of an offer, to buy or sell any security investment or other product.
Important Information and Disclosures
Readers are encouraged to conduct their own independent research. This information is intended to be limited in scope and provide basic educational information on presented topics. Data represented is believed to be from reliable sources.
TrustCore makes no warranty concerning such information. TrustCore expressly disclaims all representations and warranties that: (a) the content is correct, accurate, complete, or reliable; (b) any of the information will remain available for any amount of time or in any medium; and (c) that any omission or error will be corrected. The information contained in this presentation should not be considered a solicitation, offer, or recommendation for the purchase or sale of any securities, other financial products, or services and should not be regarded as a description of services offered by TrustCore. TrustCore shall not be held responsible or liable for any damages or losses, whether direct, indirect, incidental, special, consequential, or exemplary, that arise or result from the use of such information.
The information contained herein is presented with the understanding that the individual authors, presenters or organizers are not rendering financial, legal, accounting or other professional advice or opinions on specific facts or matters, and accordingly assume no liability whatsoever in connection with its use. The foregoing information should not be regarded as offering a complete analysis or opinion on any provision of local, state or federal law. You should not attempt to implement any of the planning strategies set forth in this content without first obtaining competent, professional advice from a qualified individual or firm.