I'm a Financial Adviser: This Is the Real Secret to Retirement Success
For real retirement security, forget about chasing returns and focus instead on the things you can control: income, taxes, risk-taking and decision-making.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Retirement articles often start (and end) by discussing the markets. I'm going to start with your mornings.
Do you wake up most days feeling good about your money and your future? Or do you frequently fret about your financial security and whether your savings can last and provide the lifestyle you worked so hard for?
If you lack confidence in your retirement future, you need a better retirement plan. And that's about so much more than the markets.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Because retirement isn't about growth — it's more about control. And control doesn't come from an adviser; it comes from your goals and the retirement plan you assemble. Beating the markets sounds good, but it's a tiring, stress-inducing and unmaintainable goal.
However, controlling your income, taxes, risk-taking and decision-making is possible.
Most people don't need another pitch or product to improve their chances of achieving retirement success. They need a clear and comprehensive roadmap for what could be a long journey.
So how do you build that plan?
1. Start by finding your ‘dignity number’
This isn't the amount in your portfolio — the $1 million, $2 million or more you've been told you'll need to have invested when you retire. It's the reliable monthly income that will protect your lifestyle and your financial confidence.
Before chasing returns, it's essential to lock in the resources that will pay the bills — keeping the lights on, literally and emotionally. Your retirement income has to be thoughtfully designed to serve as a replacement for your paycheck.
That means decisions must be made about Social Security timing, pensions, annuity or bond ladders, where appropriate, and a realistic portfolio withdrawal strategy that protects your nest egg's longevity.
When these essentials are secured, market volatility becomes background noise.
2. Next, turn your attention to taxes
For many retirees, taxes will be the largest lifetime expense. Proactive Roth conversions, smart withdrawal sequencing and bracket management often add more to net worth than a few extra basis points of performance.
The markets give, and the markets take. Taxes can take only if you let them.
Your plan can help you avoid stealth costs such as taxes on your Social Security benefits, the Medicare surcharge that penalizes savers for their financial success or a one-time spike from a Roth conversion or the sale of your business.
3. Prepare for inflation, medical and long-term care costs and other common retirement risks
You'll need to plan for a retirement that could last 30 years or more. And that requires transitioning to a portfolio that balances safety and growth.
Safety is the shock absorber that keeps everything else intact when life or the market takes an unexpected turn. With the right amount of liquidity (think Treasury bills, notes and bonds; Treasury inflation-protected securities (TIPS); certificates of deposit; high-yield savings), you won't ever feel forced to sell during a downturn or delay a critical decision.
Growth must be purposeful, tax-aware and aligned with your comfort level — because the best strategy is the one you can actually stick with. Without growth, purchasing power erodes and options shrink. Which is why it makes sense for many retirees to keep some risk in their portfolio (such as stocks, exchange-traded funds and mutual funds).
In retirement, it's important to feel certain about where you stand. You don't want to be either too conservative or too aggressive with risk-taking.
Talk to a financial adviser about stress-testing your portfolio to see how it would hold up under various scenarios, such as a prolonged period of inflation or a serious market downturn, early in retirement.
Many soon-to-be retirees I meet think they have a moderate or conservative portfolio. They don't.
4. Finally, look at your legacy as a living system, not just your final documents
Your beneficiaries matter. So do your values. Your money can outlive you — and tell the right story when it does.
Regularly scheduled family conversations about your goals, a plain-English letter to heirs that explains "why we're doing it this way" and properly prepared paperwork that puts your plan into action can help you align your gifts with what you want your name to stand for.
And remember …
Your portfolio is not a plan.
Neither is panic selling, chasing last year's winner or scattering your money across multiple accounts without knowing why you have what you have. That's called "winging it."
Putting together a comprehensive retirement plan doesn't have to be super complicated. Complex plans may look sophisticated in a binder, but it's the simple plans that are followed.
Look for rules you can stick with on your worst day, not just your best day. Automate as much as possible so that discipline isn't a daily test of willpower.
Because when control shows up, anxiety checks out. And that's the real return retirees are after.
Kim Franke-Folstad contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Related Content
- Nine Things You Need for a Complete Retirement
- Risk in Retirement: What's the Right Level for You?
- I'm a Financial Adviser: This Is How a Balanced Portfolio Builds Confidence Despite Market Storms
- Is It Time for Retirees to Break Up With Bonds?
- Auto-Callable Yield Notes Are the Income Stream Nobody's Talking About
-
Look Out for These Gold Bar Scams as Prices SurgeFraudsters impersonating government agents are convincing victims to convert savings into gold — and handing it over in courier scams costing Americans millions.
-
How to Turn Your 401(k) Into A Real Estate EmpireTapping your 401(k) to purchase investment properties is risky, but it could deliver valuable rental income in your golden years.
-
My First $1 Million: Retired Nuclear Plant Supervisor, 68Ever wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Look Out for These Gold Bar Scams as Prices Surge
Fraudsters impersonating government agents are convincing victims to convert savings into gold — and handing it over in courier scams costing Americans millions.
-
How to Turn Your 401(k) Into A Real Estate Empire — Without Killing Your Retirement
Tapping your 401(k) to purchase investment properties is risky, but it could deliver valuable rental income in your golden years.
-
Don't Bury Your Kids in Taxes: How to Position Your Investments to Help Create More Wealth for ThemTo minimize your heirs' tax burden, focus on aligning your investment account types and assets with your estate plan, and pay attention to the impact of RMDs.
-
Are You 'Too Old' to Benefit From an Annuity?Probably not, even if you're in your 70s or 80s, but it depends on your circumstances and the kind of annuity you're considering.
-
In Your 50s and Seeing Retirement in the Distance? What You Do Now Can Make a Significant ImpactThis is the perfect time to assess whether your retirement planning is on track and determine what steps you need to take if it's not.
-
Your Retirement Isn't Set in Stone, But It Can Be a Work of ArtSetting and forgetting your retirement plan will make it hard to cope with life's challenges. Instead, consider redrawing and refining your plan as you go.
-
The Bear Market Protocol: 3 Strategies to Consider in a Down MarketThe Bear Market Protocol: 3 Strategies for a Down Market From buying the dip to strategic Roth conversions, there are several ways to use a bear market to your advantage — once you get over the fear factor.
-
Dow Adds 1,206 Points to Top 50,000: Stock Market TodayThe S&P 500 and Nasdaq also had strong finishes to a volatile week, with beaten-down tech stocks outperforming.
