Here are a few things I wised my clients new about retirement planning

in #finance6 years ago (edited)


A recent study from the Indexed Annuity Leadership Council published an article stating that about 3 out of 5 Americans will find themselves working longer to meet their retirement goals. The article goes on further and finds that about 40% of Americans regret not saving earlier in their careers. 17% of Americans admins not saving enough, and 19% of Americans say they admit to making bad financial decisions. These same Americans are likely to accumulate higher debts. As a Financial advisor here are some things I wished my clients knew about planning for retirement:

The expense of your costs & taxes on your retirement

When I prepare a financial plan for individuals and families what surprises most is the amount I show them what they need to save in order to maintain their living standards when preparing for retirement. Most of my potential & current clients never factor inflation into their plans. I’m not a tax preparer, but I am familiar with some tax consequences about drawing from their accounts.
Most of my clients think they have a solid plan, but when I enter their information into my software they realize all these elements they did not consider affect their retirement plan. They thought they had a solid idea of their retirement goals and thought they were on track to reach them, but when I show them their financial plan report almost 90% of the time most fall short to consider the elements that affect their retirement plans.

People think they know how much they need for retirement

I meet with people young and old, some have been in their profession for over 20 years while others who are blessed to be in a significant position that makes them more than their colleagues at their young age think what they currently have is enough to set a solid retirement plan. For example, an individual that has built a $100,000 retirement account thinks they have enough to live on to support a $45,000 lifestyle I easily show them the real numbers and tell them as sincerely as possible that this amount can only sustain someone for only a few years. They never believe me and I sit down with them and show them their projections. To their demise, they thought they had enough. Whatever you think you need just remember you actually need more than you think.

The scary thought of outliving your retirement

Most people don’t consider what if they live beyond their planned age of retirement; then what? When you're in your retirement budgeting is crucial to your accounts. There is also a plan you should set up when you are approaching retirement so that you have precautionary measures in place to keep you from living beyond your retirement and to keep those worries at rest.

Watching your cash flow

When I sit down with people they often establish a cash flow on their current activity and the living situation they are in. What they don’t realize is that their cash flow will change at their stage in retirement. Maybe their goals are to travel more, they might end up spending more on entertainment than before people always think because their obligations go down this means that their cash flow will go down, but studies have shown that some people find that their retirement plans grow their cash flow so keeping this area in mind is also crucial to a solid successful retirement. Most people do not consider these small elements as part of their plan.

The effect of health insurance

Lately, I have noticed a small portion of my clients planning on wanting to retire early. When I help cover every detail of their retirement plan with them they fail to realize the cost of health insurance. I don’t expect anyone to consider this, but it is important to keep this in mind because most of your career your employer has helped subsidize your health insurance now that you are on your own this can be the decisive area where most people change their minds and wait to the age of 65 years old.

Building an exit strategy

When approaching retirement most people find themselves with multiple different types of accounts. The question arises at this stage in life is “what account should I pull from first?” “How should I set up my accounts for retirement?” There are many puzzles to this stage in life, setting up a solid exit strategy will help keep anxiety and stress minimal so that you can enjoy your retirement knowing you have the right things set in place to help prevent you outliving your retirement and making sure your expenses don’t sink your retirement. You worked hard for this, make sure you retire appropriately. You deserve it.

If you live in the greater Austin area feel free to contact me for an appointment. I would be happy to help you make sure you are set to retire on a solid foundation so that you can enjoy yourself and your family at that stage in your life!

Rene Gonzales

Senior Representative
c. 512-568-7203
e. [email protected]
www.Primerica.com/ReneGonzales
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