A complete and personalized picture of your current and future finances using several planning concepts that consider risk and the potential length of your retirement, is often one of the best financial moves you can make.
Our article notes that a wealth plan has four core components, the first of which is taking inventory. A wealth plan begins with considering all your current assets, income sources, and expenses, while also addressing inflation.
An inventory of your assets may be a wise step because it also positions you to view your current assets and path to retirement. It can also determine if you’re saving enough money or if you have any potential income or wealth gaps.
Setting Your Goals
Setting your goals is another solid step. As the article notes, some people determine if they’re a conservative, moderate, or aggressive investor by using cookie-cutter strategies that may not actually work, but wealth plans typically work in reverse by defining your goals before you begin building your investment strategy.
Working with your financial services professional, you can create a list of achievable goals by determining your estimated retirement income and comparing it to likely expenses like healthcare, taxes, vacations, hobbies, and the legacy you want to leave behind for the people you love. Your eventual income needs should be estimated through at least your 95th birthday, which will reduce the possibility of outliving your money.
If you don’t grasp what you need to do to reach your goals, it becomes much more difficult to decide the tools and methods you want to implement to produce your desired income.
Create Growth Strategies
You should also work closely with your financial services professional to create growth strategies. After you’ve determined your future needs and possible risks, a wealth plan may help you choose possible strategies to achieve your personal goals.
While a wealth plan’s growth strategies may include a diverse investment portfolio that contains things like fixed income sources, stocks, ETFs, and mutual funds, they generally go even further than that.
A thorough wealth plan will operate with a wide perspective to meet your needs and protect your assets. For example, if your spouse died unexpectedly, would the life insurance be enough to address all your needs? Would your preferred retirement still be attainable with just a single monthly Social Security check?
An Annuity For Income
A wealth plan may recommend using an annuity to provide yourself with a consistent stream of reliable lifetime income and a long-term care policy that may protect your assets against future healthcare costs.
Furthermore, a wealth plan may utilize a Roth IRA and health savings account, in addition to your 401(k), to adequately save for retirement and potentially reduce your tax liability.
The wealth plan you and your financial services professional create together shouldn’t look like everyone else’s plan. It should be tailored specifically to you.
Withdrawal Strategies
Your wealth plan should supply you with withdrawal strategies. After you’ve stopped working and are enjoying retirement, you’ve moved from your accumulation phase to your distribution phase. A wealth plan works to build a strategy that positions you to make withdrawals in the most tax-efficient way possible.
If your current retirement strategy is nothing more than saving as much money as possible without any thought to how your retirement will play out, you’re likely making a mistake.
Your retirement is your reward for decades of hard work and financial discipline.
Let us help you build a comprehensive wealth plan using these strategies to secure your financial future.
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