The 2 Questions You Need to Answer Before You Retire
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The 2 Questions You Need to Answer Before You Retire
Summary:
As you get closer to retirement, a lot of questions start popping up, but two stand out as the most important to answer before you hand in your notice.
1. What single financial risk could make the biggest impact on your retirement?
2. How can you eliminate the possibility of this risk ruining your retirement income?
If you'd like to learn how to prepare for a retirement with no known end date, or if you'd like Victoria to stress test your income plan, take action!
Video Transcripts:
Erin Kennedy 0:06
Victoria, it is so good to see you. Today we are going to talk through the two questions you need to answer before you retire. As you get closer to retirement, a lot of questions start popping up, but two stand out as the most important to answer before you hand in your notice. So the first question that you need to answer is, what single financial risk could make the biggest impact on your retirement?
Victoria Larson 0:27
Hands down, that is longevity risk. In fact, I was recently reading an article that said those living over 100 is the fastest growing demographic. Wow, actually, in baby boomers, there's estimated they're going to be 3 million that live over 100 so longevity risk is a multiplier. Not only is it the fact that you need money for a longer period of time to meet your living expenses, but multiple other risks come into play, inflation risk being one of them, if you need $100,000 today, 10 years from now, that same buying power requires $136,000 Wow, long term care becomes a big factor as we live longer, the likelihood that we will need care will be at play there, and that inflation is considerably higher than standard across the board inflation, right? So when you look at things like it, long term care, inflation, even taxation, what tax rates are today are likely to be far higher in the future. All those factors deplete those hard earned dollars, and we often forget about it, right?
Erin Kennedy 1:38
All right. Next question here is, how can you eliminate the possibility of this risk ruining your retirement income?
Victoria Larson 1:45
Well, that comes down to planning. Yeah, using financial planning software, looking at things like, you know, what, how much assets I have, estimated growth rates, stress testing it in terms of different inflation rates, life expectancy, even if there's a market correction, what would be the impact on those dollars? Financial Planning is at the heart of it to address that longevity
Erin Kennedy 2:13
risk, right? You know, it's interesting though, Victoria, to talk this through with you. I recognize it feels very overwhelming to try and plan for a retirement with no known end date,
Victoria Larson 2:23
It that is a risk factor. That's why longevity risk is the biggest one. In fact, I find it almost comical when somebody comes into my office and says, Well, I'm only going to live till age 85.
Erin Kennedy 2:34
They know that ...
Victoria Larson 2:37
They've got that crystal ball that says, that's the likelihood. What if we live to 86 and often retirees underestimate their life expectancy, and so we just know that with years of experience, so we have to do the planning to make sure that their plan could sustain regardless of what that life expectancy is, right?
Erin Kennedy 2:59
And you mentioned this a second ago, but I'd like to hear kind of more about what it means to stress test a client's income plan in their portfolio.
Victoria Larson 3:08
Yeah, so with our clients, the best way to do that is financial planning software. It's often overlooked by Do It Yourself investors, but those that software runs all these different Monte Carlo simulations allows us to see what happens if there was a down market early on in their retirement. What if inflation was higher? And have constant regular dialog with our clients to make sure that we're always making sure they're on track, making small fine tune changes along the way. So it's not 20 years from now and we're going, you're out of money, and you need to go find that job at Walmart,
Erin Kennedy 3:49
Right? You know, this is so valuable talking to you Victoria, because it's easy to see that this really is a moving target that needs to be revisited. So perhaps somebody watching this video is recognizing that they may not have a great answer to these two questions. So if they would like to sit down with you to make sure that they can have a just nothing but good news with longevity in their whole retirement, what's the best way to reach you?
Victoria Larson 4:12
They can reach us at info, at vitalityinvestments.org,
Erin Kennedy 4:17
All right, Victoria, again. Thank you so much for your time today, I really appreciate it. Thank you.
Victoria Larson, RICP® is an independent, fiduciary financial advisor and founder of Vitality Investments. With over 20 years of experience in the financial services industry, she specializes in holistic, retirement-focused planning. Her work helps clients protect, grow, and use their assets in ways that align with their goals and values. Victoria partners closely with individuals and families to build income security, minimize taxes, and prepare for life’s financial uncertainties.
Hypothetical examples used are for illustrative purposes only.
Investment advisory services offered through Brookstone Wealth Advisors, LLC (BWA), a registered investment advisor and an affiliate of Brookstone Capital Management, LLC. BWA and Vitality Investments are independent of each other. Insurance products and services are not offered through BWA but are offered and sold through individually licensed and appointed agents. Index or fixed annuities are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Please refer to our firm brochure, the ADV 2A Item 4, for additional information. Registered Investment Advisors and Investment Advisor Representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interests of our clients and to make full disclosure of any conflicts of interests. Please refer to our firm brochure, the ADV 2A item 4, for additional information.
