Saving for Retirement Isn’t Enough: You Need a Wealth Plan

To ensure you have a wealth plan in place that will work for you, five key steps can help get you safely to your retirement destination and beyond.

Fingers crossed in front of an airplane window that looks out on a runway.
(Image credit: Getty Images)

Imagine boarding a plane for a long-awaited retirement vacation in Hawaii. Before takeoff, the captain announces the crew is fairly certain they have enough fuel to make it to Hawaii safely, but if not, the plane will land in a desert instead. Not only that, but the navigation system is down. The plan is to simply fly west and hope for the best! And for a hat trick of misfortune, the weather radar is malfunctioning, so no one knows what kind of turbulence is ahead. But don’t worry, the crew is sort of optimistic that good weather is ahead, so they’ve taken the liberty of removing the emergency life jackets and air masks. Are you staying on that flight?

Unfortunately, this is how many people approach retirement. Saving money year after year is a great start, but it isn’t a plan to help you reach the ultimate end goal of retirement. A comprehensive wealth plan acts as your flight plan to retirement. It determines if you have enough fuel (assets) to get you to retirement and last a lifetime. It ensures you can withstand any upcoming turbulence (market volatility) that may hit before and during retirement. 

In order to reach retirement safely and efficiently, it is paramount to have a wealth plan that is stress-tested and offers proactive strategies unique to your needs.

How did we get here?

The responsibility of creating a comprehensive wealth plan wasn't always on the shoulders of everyday working people. Your parents may like to gripe about walking uphill to school both ways, but they had it easier when it comes to retirement planning.

Decades ago, the average person lived only 10 to 12 years after retirement and could rely on a pension and Social Security benefits to largely meet their needs. Pensions, or defined benefit plans, put the risk of creating retirement income on the employer. They were responsible for growing their pension fund investments, but after life expectancies began to rise along with market volatility, companies wanted to ditch the risk of providing lifetime income to their former employees. After lobbying with Congress to create a new investment vehicle for employees known as a defined contribution plan, the 401(k) plan was born.

Now, the risk of creating lifetime income is on the employee. It’s up to you to create a retirement income plan that provides for your needs, which is especially challenging as people live longer. A 65-year-old man of average health today has a 55% chance of living to age 85, while a woman of that age has a 65% chance of reaching age 85. But some will live even longer: A man in the top 1% in net worth has a life expectancy of about 87 years old, while a woman in the top 1% has a life expectancy of nearly 89 years old. 

Do you have a retirement income plan that can provide income for two to three decades of retirement?

Longevity makes retirees more susceptible to all other key retirement risks, such as sequence of returns, inflation, interest rates, healthcare and taxes. Withstanding those six major risks requires proactive planning and careful strategy, which can be accomplished only through a comprehensive and customized wealth plan.

What is a wealth plan?

An investment portfolio, 401(k) or IRA is not a wealth plan. Investing money is certainly a key component for retirement planning, but a wealth plan is much more comprehensive. It provides an in-depth, personalized look at your financial future using dozens of advanced planning concepts that can account for potential risks, no matter how long your retirement lasts. It asks, “What if?” over and over again so that you are never left asking, “What now?”

You may think you have a solid plan in place, but unless your plan has gone through five key steps, you may be boarding a plane to retirement that lacks any clear guidance or safety nets. Those five key steps are:

Bradley Rosen
President, Longevity Financial

Bradley Rosen is the owner and president of Longevity Financial, an independent financial professional with over 24 years of financial planning experience. Bradley provides each client with a customized Design for Life By Longevity FinancialⓇ plan that encompasses each part of their financial picture, including investments, insurance, taxes and legacy planning. He is passionate about creating longevity with one’s finances and prioritizing holistic health, both physically and financially. His unique approach to retirement planning is the result of watching both his grandmothers outlive their retirement income. For his dedication to educating and empowering women, he was awarded the Thelma Gibson Award in 2015. He has been featured in Forbes and on the local CBS, NBC and FOX TV news affiliates in his new hometown of Atlanta.