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Advisor Perspective

Advisor Perspective

Planning for Retirement: Are You Ready?

Marcus Velasco

Advisor, CPWA®, CFA, CFP®
Marcus enjoys sharing the tools and resources, as well as his experience, that help clients build and stick with their financial plans. Clients know they can count on him to face important decisions in life with confidence and clarity.

Read Marcus' Bio →

This article is the first of a three-part series on planning for retirement. The focus of this article is preparing yourself. Follow up articles will cover maximizing the value of your retirement assets and estate planning.

Are You Ready . . . Emotionally?

In our culture it’s not uncommon to ask someone, “So what do you do?” We take pride in our careers and in many ways allow our careers to define us. This makes sense because we’ve probably spent more than half of our lives working. We’ve spent the last 30 to 40 years waking up with somewhere to go, a deadline to make and a meeting to prepare for. It might have been frustrating at the time, but it will be missed.

What will give you that sense of purpose? It may be caring for grandchildren or parents, dedicating more time to volunteer work, or working part time. Looking into contract or consulting work with your current employer can also give you more control over your hours, allowing you to “ease into” retirement.

Have you had a conversation with your spouse? This can go two ways; they may not yet be ready to retire, or they can’t imagine you being around all the time.

Are You Ready . . . Financially?

We often meet with clients that are in the “Retirement Red Zone”: kids have moved out of the house, 5 to 15 years away from wanting to retire, and are entering a phase in their life with maximum income, saving and investing opportunities. As advisors we are often asked, “Do I have enough to retire?” It is usually answered in one of three ways: “You’re well on your way, keep up the great work”, “You’re close to achieving your goals but we need to make some adjustments”, and sometimes, “Congratulations, you’ve won the retirement game, when would you like to start?”

Answering the question requires a rough idea of your living expenses and what you expect your lifestyle will be. When planning for expenses, be sure to consider:

  • Family expenses – Will you need to assist a parent or child in need, or would you like to assist with your grandchildren’s education?
  • Health costs – Have you considered the cost of private insurance (if you are younger than 65), Medicare, and non-covered medical expenses?
  • Home maintenance – Do you have a reserve for a new roof, furnace, or to cut down that tree?
  • Periodic expenditures – Are you reserving money for a new car or big vacation?

Being prepared financially for retirement is more than just having the assets, it’s developing a plan for spending and meeting unexpected expenses. Perhaps even more important is being prepared mentally and emotionally so that retirement is something you’re running to, not something you are running from.

If you would like to have a conversation about planning for retirement, please call your JMG advisor.

Important Disclosure

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this writing, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this writing serves as the receipt of, or as a substitute for, personalized investment advice from JMG Financial Group, Ltd. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. JMG is neither a law firm nor a certified public accounting firm and no portion of the content provided in this writing should be construed as legal or accounting advice. A copy of JMG’s current written disclosure statement discussing advisory services and fees is available for review upon request.