By LouAnn Schulfer, AWMA®, AIF®
Accredited Wealth Management Advisor^SM
Accredited Investment Fiduciary®

When I meet with a prospective client or couple for the first time and ask, “What is the most important thing I can help you with?”, the answer is often a list.  Near the top is, help me develop a clear picture of my retirement.  They usually go on to say that they have been strong savers, are not huge spenders and have accumulated a nest egg.  But the worry is there:  how much is enough?  How do I know my money will last as long as I do?   When can I start taking money from my retirement accounts, and how much can I take each month?  Which accounts do I tap first?   How do I fold social security into the picture?

The first step is to organize your accounts by registration:   IRAs, ROTH IRAs, 401(k)s, non-retirement savings, and other investments.  What is your total in each category?  How much are you adding each month?  The second step is to develop answers to comprehensive questions pertaining to your golden years.  Retirement planning is like a big equation.  There are many inputs needed to get clear projections.  What amount of income will you require?  Factor in monthly recurring expenses as well as money you’ll periodically need for large expenditures such as replacing a car, appliances, home repairs, and/or travel.  What else may you need money for?  Include inflation.  Health needs.  Life expectancy.  Remember taxation.  What is your expected rate of return?  How will your portfolio react to downturns in your investments?  What other unique situations may apply to your and your family’s future?  The third step is to put is all together, developing that “equation” for your retirement projections.

The clearest financial pictures we’ve developed include a year by year numerical analysis as well as bar graphs showing the sustainability of income and account balances.  The numerical analysis gives a clear picture as to where your money is expected to come from year by year, accounting for the circumstances mentioned above.  The bar graph is gratifying to look at when it does not run in the red before your projected expiration.

What happens if you do not have a clear picture?   If you are still in your working years, you may not be saving enough or (less commonly) you may be saving more aggressively than you need to, not enjoying the things you’d like to now.  If you are already retired, the distributions you are taking may be too rich, putting sustainability of your nest egg at risk.  Then again, I’ve also seen people who have been frozen and afraid retire or to use the money from their portfolio because they do not have a clear picture.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. You should discuss your specific situation with the appropriate professional before making any decision.

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Financial Professionals and can be reached at (715) 343-9600 or[email protected].  www.SchulferAndAssociates.com
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.