Everyone has a retirement plan regardless of their level of conscious preparedness. For many people the thought of looking at the course they have set for their retirement can be a daunting, confusing and sometimes frightening task. At Tradewinds Capital Management we help clients understand their current destination and what is required to achieve their goals, and assist them in changing course if necessary. We accomplish this with a three step process of exploration, measurement and contingency planning.
Exploration
The first step in our retirement planning process is to discuss and create a picture of what retirement looks like for each client. For some, retirement means taking a nice European vacation each year and a new car every five, keeping key memberships to social and country clubs while maintaining a connection in the community through charitable giving. For others, retirement may be enjoying a yoga class in the morning, volunteering at a local school in the afternoon and enjoying evening fellowship with friends in a local book club. As these two ideas require very different plans for saving, a client must first examine what kind of retirement is desired. We use this step to determine how much cash flow per month is required to create a client’s ideal retirement lifestyle.
Measurement
The second step is to take inventory of a client’s current retirement assets. This may include investments in retirement accounts (IRA, ROTH, 401k, etc.) and other savings, plus cash flow benefits that will be received in retirement (company or government pension, social security, etc.). This current inventory is then combined with future personal savings toward retirement (plus any company contributions). This allows us to plot a client’s current course. If this course will not reach the desired destination we then explore what course changes are required to help our clients GET THERE.
Contingency Planning
The third step is to adjust one’s personal assumptions and explore what happens to the plan when the joys, mishaps and course corrections of life come. Is the plan strong or is it fragile? Does the plan allow for flexibility? Have we mentally explored and prepared for contingencies?
We have found that once we take a client through these three steps their anxiety diminishes and they become more confident that they can create the life they desire in their second adulthood.