In some regard, the desired approach to retirement planning is comparable to the game of football. Among the many members of the organization, there are two critical personnel that everyone typically recognizes: the first, of course, being the coach, and the second being the place kicker. The place kicker’s job is to put the football between the two uprights. Over the years, I have described our approach to retirement planning with the primary objective being to keep the retirement client between two uprights. The one on the left is the fear (and the distinct possibility) of running out of money too soon, and the one on the right is the possibility that upon reaching old age (perhaps 85 to 95 years old), you come to the realization that you have more money than you need. For many in this position (assuming they are still in the frame of mind to realize what is happening), they lament the fact that they could have spent more money on themselves, their family, charities, and overall in order to have enjoyed a “richer” retirement.
As you are aware, the game of football has four quarters, and, in a manner of speaking, so does the “game” of retirement. The first quarter (usually an extended period of time) is what is generally referred to as the accumulation phase. Typically, this span runs from your early 20’s up until your early 60’s. The next two quarters (although shorter in timeframe) are the critical five years just before full retirement, and the five years immediately following full retirement. On the timeline of life, these two periods of time represent the top of the wealth management bell curve. Any mistakes in the management of your finances during these two critical periods present an accentuated risk of inadequate funds for a comfortable retirement, or running out of funds too early. The final phase, or fourth quarter of life, is more commonly referred to as the distribution phase, and typically lasts from age 70 and beyond. Owing to the marvels of medical science in this day and age, the average retiree could live well into their 90’s and even age 100.
The final similarity that retirement has to the game of football is keeping score. We have an old saying in the financial service business that, “if you don’t know where you’ve been, it’s very difficult to see where you are going.” Simply stated, it’s imperative to have a plan and to track the results of your efforts. In this day and age through the use of modern technology, it is not only possible, but it is imperative to model your retirement plan and to track its progress. This is precisely what we do here at CDA Group—we guide our clients, as a financial coach, through the various phases of financial management. We use a process driven team approach that brings to bear the various critical components including investment management, tax planning, estate planning, and the latest in technology for the management and tracking of the retirement planning effort. Most importantly, we help you as clients to, “keep it between the uprights.”