Advice & Features Articles

It’s Not Just a Financial Process

It’s a Human Process

Planning for Retirement Requires Looking at More than Numbers

What do you see when you envision your life after retirement?  Is it golfing every day?  Traveling the world?  Spending more time with the grandchildren?  Maybe you’re imagining finally purchasing that lake house you’ve always wanted but never thought you had enough time for.  How can you make those dreams a reality?

by Craig Greenway, CPA, CFP® | Contributor

Years ago, there was a series of commercials with the tag line, “What’s your number?” as in what is the amount you need to have saved that would be enough to get you through retirement.  This approach, however, is very shortsighted.  There is a huge paradigm shift as you move into retirement, and it requires taking assessment of your lifestyle changes, not just your cash flow.  I say it’s not just a financial process; it’s a human process;  It’s a pleasure for me to work with families, to really get to know them, so that I can understand how to best help them reach their goals.   I strongly recommend that they establish a team to help ensure they’re ready for the future.  As a wealth advisor with over 30 years of experience, I’ve been able to help clients walk through the process, always mindful that financial planning, tax planning, estate planning, and insurance all need to work in concert with the same goals in mind.

We tend to romanticize retirement somewhat, so having an advisor to help you realistically examine your situation is invaluable.  Often people are not as prepared as they think they are, so the process of planning for retirement can never start too early.  By the time you are 10 to 15 years out, it’s vital that you begin to take a hard look at your financial resources and how they can work for you in your golden years.  The thing is, often this is the time when people are at the pinnacle of their careers and may be overspending.  They may be thinking that they’ve been working so hard to get where they are, they’ve earned the right to enjoy it.  However, it’s really at this time you should probably be accumulating more and spending less.  Expenses in retirement are often higher than you’d imagine, so it’s crucial to be working toward what I call “retirement savings targets.” It can be very sobering to realize right at the point one wants to retire or, worse, just afterwards that you really don’t have enough saved.

Many times it’s the unforeseen challenges that most affect someone’s retirement resources.  An unexpected health diagnosis can cause your finances to take a big hit.  In these days, with the political football of healthcare bouncing around, that is a big variable.  Will you need to plan for aging parents?  As life expectancy increases, your parents may outlast their own resources, and if you live to 100, you may need your resources to last as long as 35 years after you retire.  That’s a long time.

Retirement should be a wonderful reward for a long, successful career so I certainly don’t want to throw cold water on it.  It can be everything you imagine it to be.  It’s very satisfying to talk with clients and see that by really listening to them, talking to their families, and working with them over time to establish a plan, we’ve been able to make their retirement years some of the best years of their lives.

Craig Greenway is a Managing Director at SFMG Wealth Advisors.  He brings more than 30 years of experience providing clients with advanced wealth management and tax advice.  Reach Craig at craig@sfmg.com or 972.960.6460.



Top Considerations as you Plan for Retirement

  1. Cash Flow – Consider your pre-retirement lifestyle and post-retirement expectations (and what those may cost). What will generate the source of income you need.
  2. Potential Risks – Long-term care later in life, disability while you’re still earning, caring for aging parents, and other factors could significantly affect your retirement. Factor the possibility of these into your plan and discuss them with your advisor.
  3. Leaving a Legacy – Consider how much you want to leave to your children or to a charity.  Is that realistic considering your own needs?
  4. Spouse and Family Vision of Retirement – As you plan, make sure you and your spouse, and possibly your adult children, are all on the same page.  Considerations such as downsizing your home, traveling, or making large purchases are best made together.
  5. Changing Tax Environment – Take advantage of opportunities to decrease your tax burden.  For example, converting funds into a Roth IRA can give you additional cash flow flexibility during retirement and remaining funds can be left to your children.

NOTE: Please consult with your tax and/or financial advisor before taking these recommendations.  SFMG is not a CPA firm.

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