3 Essential Questions for Retirement Income Planning

Photo of Yogi Berra in his Yankee uniformWhat does it mean when we state that we are retirement income planners? For us it’s ensuring that all of our clients can answer the following question.  Are you going to outlive your money or is your money going to outlive you?  If the answer to that question is that you are not sure (which for most people would be the correct response), then you should sit down with a retirement income planner to figure out the answer to that simple but profound question.

In order to begin to determine the answer to that question, we sit down with prospects and have a conversation to determine the following 3 items:  what they are trying to accomplish, how much time they have to accomplish it, and what resources have they saved to date in order to accomplish their goals.

1)      What they are trying to accomplish?   Most people have multiple financial goals which they would like to accomplish.  However, for nearly everyone, the paramount objective is to determine how to generate enough income to support them and their partner for the rest their lives and to do so in same lifestyle that they’ve become accustomed to.  Once you have been able to determine how much income you will need and how to generate this life-style sustaining income, you and your spouse will be on your way to having your dignity and independence in retirement.

2)      How much time do you have to accomplish it? When do you plan on retiring?  It is important to determine when the money that you have invested will need to begin to support your lifestyle.  This is the most important consideration in determining how the money can be invested.  It is also important because if you are an average aged retiree, you and/or your spouse will likely have a much longer time in retirement than any generation before you and this requires that the investment portfolio reflect this reality.  That reality being your retirement could likely be three plus decades long.

3)      What resources have you saved to accomplish your goals? How much have you saved to date for your retirement?  This is strictly the money saved for retirement and not for other purposes such as your children’s college tuition or money to assist your parents. In addition, how much are you saving each month to increase the amount saved for the eventual retirement date?

Once we have this information, we can determine an estimate of the rate of return that you would need to increase your retirement portfolio so that you will have sufficient income at the desired retirement date.  If that rate of return that you require is not realistic, adjustments can be made to the retirement date or the amount saved.  However, these adjustments can only be made if you have an understanding of what you are trying to accomplish.

So sit down with a retirement income planner so you can determine where you are currently, where you would like to go and what actions need to be taken to have a successful retirement.  Because as Yankee great Yogi Berra famously stated,

“If you don’t know where you are going, you might wind up someplace else.”  

At Crimmins Wealth Management, we offer this analysis free of charge and we even throw in a cup of coffee.

About Dan Crimmins

Dan Crimmins, co-founder of Crimmins Wealth Management, is a financial coach and financial planner. Have a financial question? ASK DAN


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