I just retired, so now what?

David retired after 35 years with the Hotsky Company. All those years of hard work helped him be successful in his career, but did not give him time to prepare for retirement. David realized that hard work was not a plan and that now he needed to think of his own situation as if it was his full-time job.

David knew his situation was too important to do it himself. This was not a do-it-yourself Home Depot project, but would probably be the most important financial decision he would make. As such, he knew he needed someone to help give him a guiding hand. However, the challenge was who should he turn to for guidance?

His previous experience with financial advisors were stockbrokers who seemed to focus on a hot stock or would endlessly seem to want to impress him on their knowledge. David first looked for a CERTIFIED FINANCIAL PLANNER™ (CFP®) as a baseline requirement. A CFP® is a certification that requires not just a high-level of education in the financial field, but also a high level of integrity.

Next, he chose to find a CFP® who was also a fee-only financial planner. David knew that a fee-only financial planner would not sell on commission and would be compensated in a way that was centered on his needs.

The financial planner was able to put all of David’s financial information in an organized manner that made sense of his situation and allowed him to create a path and discipline on how to invest and spend his retirement money wisely.

With my money, I don’t want to be an expert, but I want to know what to expect and what it costs.

Mary, a recently retired biologist, knew that her field of expertise was not financial. However, she’d had enough of so-called “experts” that talked around the subject, but never seemed to answer the question. 

Mary wanted to be sure her investments were in-line with her comfort level, but could also produce the level of growth she expected. In addition, she wanted full disclosure on what she would pay for this guidance. From the advice of a friend, she found a financial planner that had the skill sets to look at her total situation and provide an overall risk level of her investments and could drill down into the detail and risk of every investment she chose to review.

The financial planner provided sample reports and discussed how the information would be provided on a timely basis. Mary was relieved to see that she could control what information she wanted to see and at the level of detail she wanted. She was also pleased to see that the advisor’s total compensation would be reported to her in a clear and timely manner.

Am I taking too much risk with my investments?

Brian was a risk taker. He was taught that without risk, there can be no reward. But now that he was nearing retirement, he knew he needed to make a more calculated approach to investing. 

The financial planner he chose had the skill sets and analytical tools to provide an investment strategy that would lower the risk over time without significant loss of opportunity. He also appreciated the ability to see his overall plan and investments in a single report.

Am I on target to retire when I reach 65? 

David and Beth, mid 50s, had their last child graduate from college a year ago and are now beginning to focus on their own lives and retirement plans. They both work hard and have good careers, but outside of their 401(k) company retirement, they have not built any other financial assets. In addition, they have long had a dream of owning a mountain home as their second home.

The first step was to quantify their current situation. What assets did they currently own, how long did they expect to work, what level of risk were they willing to take?   

With the facts and assumptions, a financial plan was created with the options and trade-offs needed to meet different objectives. It was determined that increasing their 401(k) contribution would make a significantly larger nest egg in 10 years. 

With the facts and assumptions, a financial plan was created. The plan considered different options with different outcomes. Purchasing a vacation home now and renting it out became a viable option and a Certified Public Accountant (CPA) was consulted to review the tax implications of owning a rental home. 

Creating an investment strategy that considered both 401(k) plans together provided a more logical approach to risk-taking. Finally, establishing a taxable investment account with only nominal monthly deductions provided enough of a nest egg for any unforeseen financial needs.