Keen On Retirement™

A comprehensive retirement plan usually includes a lot of important documents. Charts and graphs. Monte Carlo simulations. Annual rate of return projections. Lifetime tax liability. Legacy plans. But a comprehensive retirement plan isn't just documents. It's a dynamic framework for making the best possible decisions for you, your family, your money, and your life for decades to come. And as important as the numbers printed in black and white are to that framework, I believe that the true strength of a retirement plan is measured by its durability and by the confidence it gives seniors to live their best lives during their Golden Years.

Are you feeling a little more anxious than usual about your money? Given everything that's happening in the world right now, that's perfectly understandable. What concerns me is the rising number of Americans who say that their money worries are nudging them towards high-risk speculation in crypto, meme stocks, and prediction markets. And what's even more concerning is that folks aren't taking massive money risks just because they want to get rich quick. They're afraid that their peers and some of the bedrock assumptions of our financial system are leaving them behind. Unfortunately, substituting a disciplined financial plan with speculative gambling rarely helps anyone catch up, let alone build wealth to secure retirement. On today's show, we try to ease some of this financial anxiety by answering three listener questions that touch on some very common money fears.

It's "a tradition unlike any other." The $1.50 pimento cheese sandwich. Every year at the Masters, you'll hear TV commentators wax nostalgic about what makes the world's most famous golf tournament unique: the course, the history, the cell phone ban. And those sandwiches, which, at the very first Masters in 1934, cost just $0.30. If the pimento and cheese had kept pace with the rate of inflation since then, today it would cost $7.50. But the $1.50 price tag has stuck since 2003. Other than Costco hot dogs ($1.50) and Arizona Iced Tea ($0.99), there aren't many other examples of products whose prices have stayed flat over time. In the past couple of years, we've all had to cope with costs that have risen a little faster than we're used to, not just at the grocery store but at the pump and on our utility bills. As we discuss on today's show, protecting your nest egg against inflation and other variable costs is an important part of a comprehensive financial plan, especially once you retire.

As I discussed in a recent blog post, many of the most important retirement decisions you’ll make aren't about your accounts and amounts. They're emotional choices that involve personal judgment, weighing trade-offs, and your most deeply held personal values. However, refocusing your retirement planning on the things that matter as much or more than money might spark a new concern: perfection. If hitting a number is your main retirement concern, you can always work longer, save and invest more, and keep topping off your accounts. But once you start thinking about your money as a tool that you'll use to support bucket list travel, philanthropy, lifelong learning, and your grandkid's education, the pressure to get every detail right on paper might feel overwhelming, even paralyzing. These three examples of financial planning "perfection" all start from a place that seems logical and proactive. But they all come with downsides that could sacrifice the flexibility and resilience most seniors need to succeed throughout retirement.

Matt Wilson, Keen Wealth’s Chief Investment Officer and President, recently hosted an excellent webinar on Tax Planning Through the Four Stages of Retirement. In addition to providing a thorough overview of the tax issues that seniors should be prepared for, Matt also wanted to remind folks that the best time to ask questions about retirement is before you retire. And I’m glad that several of our webinar attendees took Matt up on that offer! On today’s show, we discuss three follow-up questions to Matt’s webinar that touch on not just taxes but also the value of working with a financial advisor on a holistic plan for retirement.

Many financial conversations around retirement focus on projections, simulations, probability of success scores, and average annual returns. And, since the long-term history of market investing continues to be positive, many folks see graphs trending up and to the right and think, “Okay, the math works. I’ve hit my number. It’s time to retire.” But what seniors often overlook, especially if they’re planning solo, are all the things that don’t show up in a typical financial projection. A slip-and-fall that changes your health care spending. A hurricane that drives up inflation. A once-in-a-generation global pandemic. No one can predict the future – not even my team at Keen Wealth. But I can tell you that the durability of a retirement plan isn’t just about your net worth or maintaining averages. It’s about sequencing how you use your assets and maintaining flexibility to deal with surprises. And as you get closer to retirement, the question you and your advisor should be answering isn’t, "Will it work if everything goes right?" It’s, "What happens if something goes wrong early?" Here are five stress tests your financial plan should be able to pass in the early stages of retirement: