Print Article - Springer Financial Advisor

The New Rules for a Successful Retirement:
5 Critical Steps to Lessen Your Risk and Your Stress
By Keith Springer
Published August 9th, 2013
http://www.foxbusiness.com/personal-finance/2013/07/19/5-critical-steps-to-lessen-your-risk-and-your-stress/
The rules of retirement have changed. What we were told to do 30, 20, even 10 years ago now
seems like a pipe dream. “Be loyal to a company and you’ll get a life-long pension. Save a little
money in a 401k and buy a house. When it’s time to retire, your investments and your home will
have grown many times over so you’ll have plenty of money,” we were told … “plus Social
Security will always be there for you, too!” Perhaps we were sold a bill of goods, or maybe it is
the natural order of things, but one thing is for certain: the rules have definitely changed and it’s
time to take the risk out of retirement and take control of your finances.
If you are in the retirement red-zone, that means within 5 years of retirement or already enjoying
your golden years, you now have a brand new set of concerns that previous generations never
had to worry about: When to start taking Social Security, long-term care and elder care not only
for you but for your parents, and a retirement income strategy that will survive the test of time. If
your advisor is only talking to you about your investments, you are missing the boat! In today’s
complex and fast changing world, you need a true financial advisor.
Here are 5 often-overlooked strategies that are critical for a successful and stress-free
retirement:
1. Understand today’s economy. As I discuss in Facing Goliath – How to Triumph in the
Dangerous Market Ahead, we are not in a “typical” market cycle that most of us are used to.
Today, the large majority of our population is well past their peak spending years, because
people spend the most when they are in their 30’s and 40’s, and slow down their spending
drastically after 48. An economy needs to have more spenders than savers, which is what we
had in the 1980’s and 90’s with the baby-boomers, but that generation is now in savings mode.
The next real boom for our economy will not come until the echo-boomers, the kids of the
baby-boomers, hit their peak-spending stride around 2020. Expect slow growth until then and
beware of when the Federal Reserve cuts back or ends the stimulus. Adjust your expectations
and invest accordingly.
2. “Invest for need, not for greed™”. Create an investment strategy that gets the return that
you need so your finances get the best returns with the least risk possible. I like to call this win
by not losing. Your portfolio should be made up of investments that perform well when the
market goes up, but more importantly outperforms when it goes down. As you get older, you
don’t have the time to recoup large losses. The market just took 6 years to gain back all that was
lost. When you are in that retirement red-zone, you can’t afford zero gains, which is a serious
loss after inflation, not to mention all those sleepless nights worrying about. Don’t let it happen
again.
1
3. Social Security is a tax-free asset. Too many people think Social Security is just something
you turn on, but that is the wrong way to look at it. Social Security timing is critical. In addition,
Social Security is designed to be tax-free income and it’s up to you to disqualify yourself. It all
depends on what I call the “sequence of distributions.” Choosing the right option can be a
daunting task. For a 62-year-old couple there are 1,379 different options to choose, and
choosing the right option can mean the difference of $100,000 or more.
4. Create a retirement income stream that will last the test of time. You don’t want to run out
of money in retirement. People are living longer and longer, and putting the right distribution plan
has never been more important. Twenty-five years ago I used to plan for clients to live until 85.
Today I use 95, and I expect that to be 100 before long.
5. You will need elder care. Imagine working your whole life, scrimping and saving every dime
you can sock away so you can retire comfortably, only to see your hard-earned savings
decimated by an illness in the family. It’s not a question of if you get old and start losing your
abilities, but when. It will happen to you, your spouse, and your parents. It is estimated that
80-90% of your wealth can be spent in the last 30 months of life. Prepare now or expect to go
back to work.
These 5 critical strategies are the stepping-stones for everyone in the retirement red-zone.
Careful planning now will mean the difference of traveling to visit your grandkids in first class on
a plane, or taking the bus. Very simply, be the expert, not just in investments but comprehensive
financial planning, or hire one.
If your advisor is just an investment advisor and simply addressing your investments, then you
are missing the boat. If you’re like most people, you may be good at saving for retirement, but
not so good at having a plan for your retirement. And that's a lot like running a marathon without
knowing the course or where the finish line is.The most important take away you can have from
reading this report is that you need a comprehensive financial game plan. A plan that addresses
all facets of your golden years to ensure that stress-free retirement you’ve dreamed of, including
social security; a tax- efficient retirement income plan; investment management with risk
controls; and estate planning. The sooner you do this, the better off you and your family will be.
So I encourage you to stop procrastinating, and take the first step to taking control of your own
financial future. Call us right now to schedule a free, no obligation consultation at
916-925-8900 or visit us at www.KeithSpringer.com
Keith Springer is the radio host of Smart Money with Keith Springer on NewsRadio 1530 KFBK and TALK
650 KSTE, FOX40's Financial Analyst, a frequent contributor on CNBC, FOX, the Wall Street Journal,
and more; the author of "Facing Goliath: How to Triumph in the Dangerous Market Ahead", founder of
Top Down Tactical™ and President and Founder of Springer Financial Advisors in Sacramento CA, an
SEC Registered Investment Advisory Firm. He has developed a proprietary process for successfully
building tax-efficient retirement portfolios and has provided wealth management services for over 29
years. Keith can be reached at 916-925-8900 or Keith@KeithSpringer.com.
2