Welcome to The Definitive Guide to Retirement Income
Do you know how much your retirement will cost? Have you considered how you will pay for it? Do you know how to generate the retirement income you will need?
For many current and future retirees, these can be stressful questions that are often put off and left unanswered for too long. Fisher Investments manages money for thousands of the world’s most affluent people. We help our clients with many things, but one of the most important is helping them answer the aforementioned questions and meet their retirement goals. We’ve written this guide in an effort to help you answer these fundamental retirement questions for yourself.
Why have we provided this guide at our own expense? We’ve found educating retirees is good for our business, whether an individual becomes a client or not. For some, our outstanding client service is an attractive reason to become a client. Others simply want to take our insights and use them on their own. Whichever group you fall into, we sincerely hope this guide helps you reach your retirement goals.
Chapter 1: Your Retirement Goals
What is your plan for retirement? Enjoy the golf course? Travel? Spend time with grandchildren? Keep on working, but purely for fun?
In our experience, there is immense diversity in how our clients want to spend their retirement. But from a financial perspective, we’ve found most people are aiming to achieve one (or often more) of the following four goals. And before you focus on anything else, it is imperative you figure out what your goals are for retirement.
Avoid Running Out of Money
For many, this is their number one goal—and their number one fear. Being forced to turn to your children—or go back to work—during retirement is a source of anxiety for many current and future retirees. Many folks think the key to achieving this goal is very low-volatility investments (e.g., Treasury bonds), but this is not always the case.
Maintain or Improve Lifestyle
Most people have worked hard for their retirement and want to enjoy it. As such, a common goal for many of our clients is to maintain—or better yet, improve—their lifestyle during retirement. The key here is to maintain or grow purchasing power over time—this requires income growth to offset the malicious impact of inflation.
Increase Wealth
Some folks are easily able to enjoy the retirement lifestyle of their choosing with no fear of running out of money. For these fortunate individuals, the goal is often to grow their wealth over the long term—typically for legacy, whether that’s children, grandchildren or charity. Unsurprisingly, most folks with this goal take a growth-oriented approach to their investments.
Spend Every Cent
This isn’t a typical goal among our clients, but there are some people who think success is spending all of their money before they die. But this is often a risky proposition—there’s no way to know exactly how long your retirement will last, and folks who attempt this may find themselves out of money sooner than they think.
Before you focus on anything else, figure out which of these goals are most important to you. You can’t figure out how to get there if you don’t know where you are going!
