Retirement planning is becoming more complicated. The traditional view of retirement is changing. More uncertainty is being interjected into the formula as Clients consider:

• Retirement profile: One can have many unresolved issues including: where to live, retirement age, part-time consulting, finding a new activity or passion, retirement budget, etc.
• Long-term care costs: The issues of long-term care and the unknown increases in long-term care maintenance.
• Health Insurance cost: Increasing and the unknown cost of health care and Medicare premiums and supplemental policies.
• Superannuation: People are tending to live longer and increased longevity requires a longer payout period
• Social Security payments: Do you want to count on what has been promised or view Social Security as a bonus?
• “New Math” during your withdrawal years: The rates of return will be less than the accumulation phase, because the risk tolerance assumptions will be lower. What do you assume for an investment rate of return during your withdrawal years? Your risk tolerance will probably be lower which means less return.
• Stylized living: This is your opportunity to spend time evaluating your retirement budget. You may have a significant decrease in living costs. Many are realizing they didn’t really want a Ferrari or a bigger house. Being free of unrealistic goals and defining your core values and planning your retirement activities often leads to smaller retirement withdrawal demands.

One thing is for certain. Many Clients will need to consider all of their options and earnestly visualize what their life in retirement will be like in order to make the best decisions possible with the resources they have.

Instead of panicking about retirement income based on your peak cost-of-living, focus on what’s most important to you and determine what it will cost. That is why the Family Financial Philosophy mission statement is so important. Solid planning advice is difficult unless you have evaluated and articulated where you are going.

Realistic planning almost always has a better result than just "letting things happen."