WILL RETIREMENT BE LIKE VACATION?

Will your RETIREMENT be like your Vacation?

This is a popular time of year to take a vacation. If you are like my family, we find ourselves working so hard that vacation is an important respite too precious to not go well. If you are enjoying this article as part of your leisure reading while on vacation, we hope all is going exactly as you planned and that your spirit, body and relationships are getting recharged. Ironically, many people put more effort into planning their vacation than they do into planning for their retirement. If your goal is that your lifestyle in retirement echo your best vacations, it’s important to plan for what you want and to periodically validate your progress in meetings with your financial advisor. Important elements to include in your plan include knowing when you can retire and not outliving your money. Let’s briefly examine both.  KNOW WHEN YOU CAN RETIRE Chances are when you contemplate when you will retire, the first thought that may come to mind is that “people retire at age 65.” This may or may not be a proper target for you. To find out, your best strategy is to have a dynamic, comprehensive financial plan and to revisit it periodically with a competent financial advisor. No two people are exactly alike, and you deserve a customized plan. If you don’t yet have a personalized plan, there are a couple of guidelines to keep in mind. Assuming that it is still around at your retirement, it’s highly doubtful that your Social Security Retirement Benefit is going to generate enough income for you to survive on. You also need to understand when you can start drawing on this benefit. (Hint: It’s not age 65.) Here is the current schedule:

YEAR OF BIRTH: FULL (NORMAL) SOCIAL SECURITY RETIREMENT BENEFITS*

1943-1954 1955 1956 1957 1958

FULL RETIREMENT AGE: 66 YEARS 66 AND 2 MONTHS 66 AND 4 MONTHS 66 AND 6 MONTHS 66 AND 8 MONTHS 1959 >= 1960

66 AND 10 MONTHS 67 YEARS

You can get a personalized illustration from the Social Security Administration, and if you have taken the time to review yours, you’ll know that this amount will probably not be enough for you to live on. At best, it should subsidize your personal savings/investments. Your primary source of retirement income will most likely be your personal retirement savings/investments. The amount you’ll need to accumulate prior to retiring will depend on several key factors including your age, lifestyle, health and anticipated longevity. Hence the importance of a comprehensive plan. Beware the urge to retire too early. For many of us, our greatest earnings from work occur after age 50 and well into our 60s. Switching from a healthy income stream to having to then live off of your retirement savings is a significant shift and should be done only after very careful review with competent counsel.  DON’T OUTLIVE YOUR MONEY There are few nightmares more frightening than running out of money in retirement and becoming financially destitute. The thought of having to find gainful employment when you are in your late 70s or 80s causes more than a few retirees to not sleep well. This is not a position you want to be in. Average life expectancies for people today hover around 85 years of age, and thanks to ongoing advances in medical science are expected to continue to extend out. Remember that an average life expectancy of age 85 means that half of us will die prior to achieving that age while the other half of us will live beyond that point. With that in mind, it seems wise to plan on still being around to enjoy your life and to be able to pay your bills into your 90s. How can you make your retirement savings last longer than you will? Here are a few ways to put the odds in your favor: • Properly allocate your retirement portfolio with enough equities to allow you to keep pace with inflation plus to withdraw up to 4% per year to live on. • We suggest you have a portion of your retirement savings in a financial asset that will provide a guaranteed income stream for your life. This financial safety net can be a welcome friend during uncertain markets. • Plan for the very real costs of longterm care for your spouse and for yourself. Once you reach age 65, incurring long-term care expenses during your life are a probability, not a possibility, and you will want to plan accordingly. • If suitable for your individual situation, we suggest having your investments in an investment advisory account rather than a brokerage account. This would require your financial advisor to follow the fiduciary standard and there can be comfort in knowing that she/he is required to put your best interest before their own. These are just a few broad but important aspects to keep in mind when planning your retirement. With good planning and good fortune, your retirement could rival your vacations! For more detail and insight, you are welcome to contact us. We would be happy to help assure your lifestyle and legacy.

Managed accounts are charged Advisory Fees in addition to internal fees of investment company products, and should be evaluated when determining the costs of a fee-based account. A list of additional considerations, as well as the fee schedule is available in the firms Form ADV (Part 2A) as well as the client agreement. Please ask your Advisor to provide. This material is intended for informational purposes only and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney, tax advisor, or plan provider. Any opinions are those of Tom McCartney and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

 Tom McCartney is the Founding Principal of My Advisor & Planner and a Wealth Manager. Securities and Investment Advisory Services Offered Through Raymond James Financial Services, a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. My Advisor & Planner is independently owned and operated. Tom and his team can be reached at info@ mapyourfuture.net, at 630-457-4068, or you can visit them at www.mapyourfuture.net.