Pre-Retirement


Smart Retirement Planning Begins with a Smart Process

Retirement is a challenging prospect. After all, if we plan it correctly, most of us will only do it once. Planning for retirement is a complex undertaking that requires a great deal of personal and financial planning. And, as if that weren’t challenging enough, managing your retirement will be an ongoing responsibility as well.  

While building and managing your retirement is quite literally the project of a lifetime, with a little work and some good advice, a comfortable retirement is attainable. Just remember, it’s a marathon – not a sprint!

Step 1: What Does Retirement Planning Really Mean?

In a word – uncertainty. There are many things that can derail your retirement, either before or after it begins. According to a study by Fidelity, only about 27% of Americans are on track for the retirement they want to have, which often includes financial freedom. More than half either needs attention or is only in fair shape. Here are a few other areas to consider.

Step 2: Identify Your “Must Have” Priorities

Regardless of the size of your assets, a good retirement plan really has many benefits, and, most importantly, provides you income for the lifestyle you want. Some of the most important are:   

  1.     It can ensure you will not be a burden to your children and family.
  2.     It can prevent unexpected health care costs and tax obligations from derailing your quality of life.
  3.     It allows you to leave an orderly and lasting legacy for your children and grandchildren.

Many people want to leave a legacy to their family – to help pay for education, a first home, a wedding, or to help the next generation. They also don’t want their expenses to be a burden to their family; and with some careful planning, they can accomplish both objectives

Step 3: Recognize Timing Matters

Time makes a huge difference. It’s important to invest wisely, at a rate that hopefully meets or beats inflation. On top of that, is the idea of compounding. If you have $100,000 and you get a 7% return (which is the historical average for the S & P), then at the end of one year, you’d have $107,000. If you reinvested that whole $107,000 the next year, you’d essentially get interest on your interest. Compound that over 20-30 years, and it makes a huge difference. For example, a thousand dollars invested 20 years ago would be worth about $5,480 today, while that same $1,000 invested 30 years ago, would be worth almost $14,000!*

Step 4: Invest Wisely to Outpace Inflation

Or, in an ideal world, you would beat it all together. The reason that investing is so important, is because the value of money decreases over time. Historically, inflation has increased to 3% a year. The interest from savings accounts, CDs, and even some bonds is often not enough to keep up with inflation, much less beat it. So, the best way to ensure that your money will be worth what you need it to be by the time you retire is to invest wisely.

Step 5: Expect the Unexpected

This is for all those things that we never see coming until it’s too late! A medical emergency, for example, or a change in your financial circumstances. Having a secure nest egg can make it easier to meet those challenges that we all face, even if we don’t know what they’ll be yet.  

Medical expenses in retirement are an enormous expense for most people in the United States these days, and these rates skyrocket as people get older and need more and more medical care. In fact, a report by Fidelity found that the average 65-year old couple who retired in 2020 would spend $295,000 on medical expenses throughout their retirement. And that doesn’t factor in the cost of long-term care insurance, which may be another consideration altogether. The bottom line is that healthcare costs in the United States will likely continue to increase, and the average person needs to make more use of the healthcare system as they get older.  


*The example is provided for illustrative purposes and not a guarantee of performance

Lineweaver Financial Group is independently owned and operated. Securities offered through Triad Advisors, LLC, Member FINRA / SIPC Advisory services offered through Lineweaver Wealth Advisors, LLC. Lineweaver Wealth Advisors, LLC, is not affiliated with Triad Advisors, LLC.

*: Yahoo.com Article: 64% of Americans Aren’t Prepared for Retirement – and 48% Don’t Care.

1: Crain's Top 25 RIA: Based on assets under management

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