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FINDING THE RIGHT RETIREMENT STRATEGY
Developing an effective and safe
retirement strategy is no easy task. Retirement planning requires both specialized financial planning and an approach
to investment management that is specifically structured to taking money out of your nest-egg. There are many strategies
that work well during a person's wealth accumulation years, but very few that work during a person's draw-down
years.
Most people will need to work with an expert. However finding a real expert is challenging. Many large financial
institutions are spending a great deal of money to convince you that they can help you navigate retirement successfully.
However, there is a difference between advertising and actually delivering high caliber retirement planning services.
We believe that you need to ask the tough
questions and proceed with great caution. Discovering an advisor who can provide retirement planning services tailored
to your priorities may be the most important financial decision you will ever make.
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If you are nearing retirement we invite you to contact
Wealth Analytics for an appointment to discuss our integrated retirement planning services.
WHEN INVESTMENT PERFORMANCE IS NOT
ENOUGH
Before retirement, most investors spend much of their time evaluating the performance of their investments. They
compare the performance of their investments to familiar benchmarks such as the S&P 500, to other people's
investments, and to the general background of speculation by pundits in the media. And from time-to-time they,
or their advisor, may change a mutual fund here, or a stock selection there. For most investors the general framework
for making investment decisions is based on performance. Pre-retirement investors tend to focus on the question: how fast is my money growing?
Unfortunately, most investors do not realize that managing their money in retirement is far more complex than managing
their money during their working years. Applying a simple "how fast is my money growing" framework to
investment management in retirement is a recipe for disaster.
During retirement investors need to create an entirely different framework for making good investment decisions
--one in which investment performance plays a very different role than it does during their working years. Investment
performance becomes one among many important factors that affect the longevity of the client's investment portfolio.
Unfortunately there is no credential or title that identifies investment advisors or financial planners who excel
in the area of investment planning during retirement. None-the-less, there are some important features that investors
can look for in a genuine retirement-oriented investment plan:
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Does the advisor have a methodology
for stress testing the investment portfolio to see how
long it will survive in both good and
bad markets?
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Does the advisor help clients determine
the withdrawal strategy that best suits the client's
lifestyle expectations about retirement?
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Is the advisor dedicated to helping
the client monitor their spending?
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Does the advisor help co-ordinate
withdrawals from all accounts?
Good retirement planning lays out a framework for investment management based on the factors above. Advisors who
are truly knowledgeable about the field of retirement-oriented investment management will spend at least as much
time discussing these factors as they will spend talking about specific investments or investment strategies. If
you are nearing retirement it is imperative that you begin to consider the question of how to get money out of
your nest egg safely. |
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