The very first stage in planning for lifetime retirement is a "vision exercise." Envision what your retirement looks like. What will you do when your weekdays are now your weekends? Who's around you? Where do you live?
What is most important to you...passing along a legacy to your heirs...taking a first-class cruise every year?
"Retirement" can be defined as many things. The one I like most is: "Doing less of what you don't want to do and doing more what you want to do." Full-time leisure rarely fits the mold. How concerned are you about your own health? The health of your spouse?
In today's world, the sense of well-being, fulfillment and objectives accomplished is going through a paradigm shift. Many of our 30-40-year-old entrepreneur clientele are attempting to design "retirement" strategies today while some of our octogenarians are seeking new methods to extend their lifetime skills and personal satisfaction in new ventures!
After considering what vision you retirement may take, you can make more accurate estimates of what it will cost to fund that lifestyle. We call it moving from the "location" you are today to the "vision" you see for yourself tomorrow (L to V).
Visualizing retirement involves unique, deeply personal choices that each individual or couple make for themselves. This exercise gets you motivated to match your resources and investment strategies with your desires (vision). It also drives home the point that reaching contentment in retirement depends on planning, doing, listening and successfully balancing a series of trade-offs. The keys to contentment in retirement are to plan, diversify and save. People who fail to plan feel unfulfilled in retirement. Remember Peggy Lee's classic refrain, "Is that all there is...?"
I believe the biggest driver of satisfaction in retirement years is not total assets, but financial preparedness, the sense that the resources and plans that have been consciously thought through lead to the lifestyle "chosen" for many years to come.
The decision to invest for retirement is in itself a trade-off between consuming now or consuming later.
Once the vision is captured, the structuring of a Lifetime Income Life (LIP) then consists of:
*The timing of retirement (when, how long, trade-off between inflationary requirements and tax exposures);
* Projections of asset trade-offs under your/outside management;
* Consideration of alternative investment strategies to minimize risk, enhance stability and predictability and increase cashflow; and
* Long-term "care" solutions.
The transition from full-time work and asset accumulation to "retirement" and asset drawdown brings on a new and complex set of financial trade-offs. There is no "one size fits all" solution. The only absolute is the need to plan to actualize the likelihood of a secure, "familiar" and gratifying retirement.
Educating individual families to understand and act on their own retirement security requires a significant effort by the financial services industry, employers, advisors, the media, and especially the individual.
By undertaking a Family Vision Process, you can visualize your retirement years and better prepare the trade-offs between essential and discretionary expenses. Conscious retirement visioning makes it possible to obtain realistic and satisfying goals that benefit you, your family and your causes.
Perhaps most importantly, Lifetime Income Planning provides the comfort of knowing you have been a good steward of your work, which simultaneously allows you to maximize your dreams and legacy.
Jim Feek is a certified estate planner, registered financial consultant and a principal at Feek Justice Financial. He can be reached at 828-1400.[[In-content Ad]]
