Retired in the 21st Century

Whether you are currently retired or retiring in the future, it is important to update your retirement plan and income goals every year or so. The main question that should be asked through this process is whether or not a person will run out of money during retirement.

There is a systematic, step-by-step process that can be taken to determine this answer, but without professional help it can look overwhelming. However, even though the guidelines may be simple, with the many variables involved the answer is never simple.

Four key areas that initially must be addressed are: longevity, lifestyle, available retirement income, and what role accumulated assets will play in your income needs. 

Risk Management/ Estate Planning

Once the answers to these questions have been formulated, then you move to the next step of accessing investment risk management, income tax and estate planning. Finally, regardless of the depth of plan design, it is crucial for success to monitor the plan. This allows you to see how the assumptions are working when compared with reality, and make appropriate changes if the plan seems to be heading off track.

For most retirees the main areas that can have the greatest impact on the success of a plan are lifestyle, investment risk management, and estate distribution.  If your desire is to maintain the same lifestyle that was enjoyed before retirement rather than scaling back, then this needs to be factored into the plan. 
As you consider investment risk, diversification and balance are usually good benchmarks to follow.

A good rule of thumb is not to assume more investment risk than with which you are comfortable. What we mean by this is that an overly aggressive investment strategy may result in the loss of significant principal and lead to inadequate cash flow. On the other hand, an overly cautious investment strategy may not provide the cash flow that is needed.

When considering estate distribution, the primary question revolves around the priority that is placed on providing an inheritance to heirs. This decision can impact how accumulated assets will be used for cash flow needs.

Review

In conclusion, once your plan and investment strategy have been mapped out, if your investment goals lead to a portfolio that makes you uncomfortable, you will need to examine your alternatives with your advisor and make knowledgeable decisions that are realistic.

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Rockford
815-877-8440 (Toll-Free 877-495-5227)
Madison
608-442-5637 (Toll-Free 800-396-0928)
E-Mail info@klaasfinancial.com

We look forward to hearing from you!

Rockford Office
6050 Brynwood Drive,
Suite 103
Rockford, Illinois 61114
Phone 815-877-8440
Toll-Free 877-495-5227
Fax 815-877-6807

Madison Office
2960 Triverton Pike, Suite 102
Madison, Wisconsin 53711
608-442-5637
Toll-Free 800-396-0928

info@klaasfinancial.com

Individuals associated with Klaas Financial Services are securities licensed through Investacorp, Inc., a registered broker dealer, member NASD, SIPC. One or more associates are securities licensed in the following states: AL, AR, AZ, CA, CO, FL, GA, IA, IL, IN, KY, MI, MN, MO, NC, NH, NV, NY, OH, OK, PA, TX, UT, WA, WI.
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