In a piece for the New Jersey Star-Ledger, Karin Mueller said many aging Americans are planning for their retirement with savings, life insurance, annuities and other financial products to avoid hardship. These plans also include financial planning for activities they wish to partake in once they are done working, which can add a new category of expenses to save up for.
For example, one couple told Mueller they want to travel once they retire and spend more time with their adult children and grandchildren out of state. They want to conserve their capital base in their retirement savings for as long and as much as possible, and are unsure if their active retirement plans will be covered by their current savings. The couple has saved $1.07 million in employment retirement plans, $215,940 in IRAs, $230,940 in bonds, $85,480 in money markets and $6,650 in cash. In retirement, they also expect to receive $900 a month in pension payouts, according to the Star-Ledger.
In response to the inquiry, Brent Beene, a certified financial planner with Regent Atlantic Capital, told the Star-Ledger that the couple should not only set aside extra savings for their more expensive retirement plans such as travel, but also account for a longer life expectancy as the consumers are in top health and have a family history of living into the 90s.
Beene also recommends the couple determine how much money they want to live on annually in retirement, and how much money will be allocated to vacations and other luxuries. Beene believes the couple's retirement planning strategy and financial savvy will enable them to afford a comfortable and exciting retirement, the Star-Ledger reported.
Many consumers will seek out information from specialists such as Beene to ensure they are on the right track with retirement planning and saving. To attract customers, many financial services firms will offer a free portfolio analysis or a complimentary consultation. Christine Benz from Morningstar warns consumers to be cautious when accepting a free consultation as it could be used as a ploy to upsell their assets.
According to Benz, consumers should enter these complimentary meetings with a few questions to ask the financial planner regarding the need and value of any financial products offered to them. Before working with a client, many financial professionals will invest time and energy into persuading customers to purchase products that may not always be the best option for customers. Shoppers should present their bottom line and important needs that must be met to the planner at the start of the meeting to avoid getting derailed by excessive offers.
In addition, many consumers may feel tempted to consider new products after a financial planner makes them appealing during a free consultation. Before purchasing new products, Benz recommends consumers determine if they have a need for the product with regard to their current portfolio and economic situation. Free retirement and financial planning advice can be a useful resource for consumers seeking a second opinion or or just starting their saving program. But consumers must remain savvy when meeting with new financial planners to ensure they do not spend more than they wanted.