Given the jaw-dropping costs of long-term care and the odds of needing it at some point in life, many people are left wondering how they will pay for the medical treatment and assistance with the activities of daily living they may require in their later years.
By Charles Welsh, CFP® – Vice President & Wealth Management Advisor
Young investors benefit from time in the market. Time and taking market risks are aligned because the market is up roughly three out of every four years and has always trended up over time. Working age individuals even benefit from years the market dips. This occurs through consistently investing in retirement plans, called dollar-cost averaging, and effectively buying shares on sale. Due to this, many young investors succeed with a standard buy and hold with rebalancing approach.
However, by the time individuals near retirement, investing becomes more complex. The process is complicated by the following variables:
Financial:
- Wealth accumulated
- Tax bracket
- Long term care and life policies
- Social Security Benefits
- Retirement age and medical insurance gaps
Lifestyle:
- More frequent travel
- Major purchases – second home, RV or new cars
- Social clubs and dining
- Part-time work
- Downsizing
Estate Goals:
- Exhaust savings during lifetime
- Inheritance for heirs
- Education funding for grandchildren
- Charitable giving
- Minimize taxes
The factors above combined with inflation, market conditions, and specific feelings about taking risks materially impact the optimum approach to managing retirement wealth. Additionally, in-retirement time is limited, and market volatility creates more severe risks. Your retirement wealth management requires a curated approach unique to your retirement goals.
At many firms, clients will get the “one size fits all” approach, only factoring for client risk – even in retirement. While this approach may work for some clients, it doesn’t factor in specific, unique goals that can ultimately determine success.
There is value in getting to know a client and understanding their specific retirement plan goals. At Central Trust Company, once we have a clear understanding of our clients, we then model the factors discussed and score the probability of retirement success. This score guides the conversations we have with our clients. These conversations in turn impact our strategies, and the likelihood of accomplishing their goals. The outcome is the clients’ estate plan, financial plan, and investment strategy working in tandem to increase their probability of success.
If your financial, lifestyle, or estate goals have changed, please reach out to your advisor to discuss. Many times, individuals only look at one part of the equation and do not take the time to understand all the various pieces that are crucial to ensuring a successful outcome.
We believe a comprehensive review and approach is in your best interest. To request a complimentary, no-obligation Second Opinion Service (SOS) evaluation, visit centraltrust.net/second-opinion-service/ or reach out to an advisor at Central Trust Company.
Related Articles
