Originally published in Wealth Point, June 2018
Transitioning to retirement is a key life event for most workers. Whether you have meticulously planned out your retirement life or have just started to give thought to this new journey, there are some important questions to ask yourself, or to discuss with your advisor.
RETIREMENT READINESS QUESTIONS
Retirement is both a mindset and a financial readiness. When clients come to us wanting to have exploratory discussions, we customize the conversation based on what adds the most meaning to their lives.
Have you given thought to what retirement looks like for you?
Try and visualize your first day of retirement: What are you doing? Does this day look different from other days? Are you still working or consulting part time? Or are you looking forward to having that time to devote to a different fulfilling activity?
Once our clients create a vision for what retirement looks like, we work with them on their financial readiness. Retirement may mean you’re no longer working at a job you don’t love, but it also means that you will still need a plan for how to replace your income stream.
What are your income streams? Whether it’s your retirement accounts, pensions, Social Security or your investment assets, obviously the more income streams you have, the better. Coordinating when and how you take income from these various sources is a key component in optimizing your financial plan.
Another key component of the financial readiness conversations are around spending. What percentage of your spending covers essential needs, like healthcare or housing? How much money are you spending for discretionary purposes? Sometimes there is a disconnect between what clients think they spend versus what they actually spend. It’s helpful to review past expenses to get a sense of where your money is actually going. For example, are you maintaining a big house when all the kids have gone? Does it make sense to downsize? The hard part about cash flow planning and tracking your spending is that you’re never done. But this continual examination of your expenses and finetuning your financial plan can help you live out the kind of retirement life you envisioned.
Another common misconception that we hear from some of our clients who are working and would like to retire early is that you need to keep working just so you can have health coverage. Ultimately, healthcare is an expense—just like any other expense—and can be planned for and factored into retirement planning.
Are you on the cusp of change—moving from working life to retirement life? We’re here to listen to your priorities and understand your vision of your retirement life. We can help you get retirement ready and will continue to work with you during your retirement to help you live out your best life. We’re here to plan with you on what can be possible.
Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate, but is not guaranteed or warranted by Mercer Advisors. Content, research, tools, and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy or product made reference to directly or indirectly, will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.
This document may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to market conditions. Readers are cautioned not to place undue reliance on these forward-looking statements. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Mercer Advisors’ control.