By Cory Bittner, CRPC, COO, Wealth Advisor
Retirement is something most everyone aspires to. While I feel quite fortunate to truly love what I do and I plan to work forever, I fully anticipate 30 years from now I might be ready for life’s next stage. With that in mind, I understand the importance of planning for the future.
Almost all of our clients are retired or plan to retire soon. Clients ask quite frequently how they are doing relative to the next person and they also ask us to share wisdom from lessons that others have had to learn the hard way. If you’re preparing for this crucial juncture, I’ve created a short list of mistakes that we’ve seen people make:
1. No Financial Plan
Straightforward, simple, yet so many people neglect the importance of a written, thoughtful financial plan. As Benjamin Franklin is famously credited with saying, “If you fail to plan, you are planning to fail!”
2. No Concept of Expenses
Not taking the time to truly evaluate expenses can prove to be costly. Quite often someone has an
idea of what their employment income is, and assumes that so long as they have that same
income in retirement, they’ll be able to live the same lifestyle forever. What about health care expenses? How about travel? Think about the money you’ll spend on activities you didn’t have the time for while you were working. If you need help with this, we can provide a detailed expense tracking spreadsheet to serve as a good starting point.
3. Drastic Investment Allocation Changes
Approaching the phase where you’re going to stop saving and start spending proves to be challenging.
As people approach retirement, they are inclined to make significant shifts with their investments to something “safe” as the finish line approaches. While an allocation to “safe” investments is important, viewing retirement as the finish line is the mistake.
It’s the starting point for the rest of your life.
The money you’ve saved may need to last 30+ years.
4. Giving Away or Spending Money
on Others (Kids & Grandkids)
We appreciate and respect our clients’ generosity. However, overdoing this and not taking it into consideration with expenses can be problematic. Putting it graciously, a college education can be financed, but your retirement cannot be.
5. Failing to Consider How Time Will be SpeNT
Some people scoff and/or laugh when we ask how they’ll occupy their time when they’re not working anymore, but people fail to really consider it. If you wake up on Thursday at 9 am and you aren’t going to work, where are you going? Plan to retire to something, not from something. This consideration shouldn’t be discounted.
While this list certainly isn’t exhaustive, it’s designed to highlight some of the threats that individuals face prior to retirement. Neglecting to create a financial plan is listed as mistake number one because of its critical nature. If you’d like to start the conversation with a trusted advisor, please contact us today.
To schedule a complimentary wealth management consultation, contact Falcon Wealth Advisors at 913-326-1900 or visit us online at www.FalconWealthAdvisors.com.
2000 Shawnee Mission Parkway, Suite 230
Mission Woods, KS 66205