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Why Personalized Retirement Planning Can Pay Off in the Long-Term Thumbnail

Why Personalized Retirement Planning Can Pay Off in the Long-Term

Retirement Income Planning Retirement Planning\Financial Planning\Financial Advisor Retirement Readiness

For individuals and couples planning for their retirement years, it can be hugely beneficial to consult with a financial planner to build a personalized retirement plan.

There is no such thing as a one-size-fits-all solution to retirement planning, because everyone has different career goals and trajectories, preferred ages to retire, risk tolerance, spending preferences and estate planning goals.

For example, clients who need to support dependents have different needs and priorities than those who don’t. The long-term needs of clients who will have family members who can care for them later in life, if necessary, are different from clients who will likely have to pay for external care. Couples in which one spouse is the provider will have different income and lifestyle needs than those with two working individuals, depending on which spouse predeceases.

Also, retirement planning in Baton Rouge, for example, is different than in other parts of the country.

You may assume your preferences for your retirement lifestyle are clear, but make sure to communicate them with a financial planner, and that your retirement planner builds a plan that clearly reflects all your retirement goals.

Below we discuss some of the ways financial planners can help clients develop a solid retirement planning strategy.


Ready to discuss your future with a financial advisor? Contact Align Wealth Partners to see how we can help.


Savings Goals

When it comes to saving, setting goals can help clients set a benchmark for the percentage of their income they should save for retirement, as well as help them plan around not just general living expenses but major future purchases, such as moving into a new home. When a financial planner takes a personalized approach to establishing a financial plan, he or she can help clients maximize their specific retirement plan contributions and determine how to save more than just the annual limits for tax-advantaged retirement accounts.

For example, for short-term savings, financial planners might recommend Certificates of Deposit, or CDs, with maturity timeframes that match clients’ expected expense date. (Remember, whatever your savings goals, the sooner you can begin saving a significant portion of your income, the more time your account value will have to grow substantially through compounding of interest and earnings over time.)

Social Security Planning

Personalized retirement planning can also help clients determine the most advantageous time to begin taking Social Security payments. Full Social Security benefits begin at retirement age, which is 65 or 66 depending on a retiree’s birth year. Retirees can also elect to take early retirement as early as age 62, though they will receive lower monthly payments than they would at full retirement age. If you plan to continue working before you reach full retirement age, you may want to defer your benefits until then, because your other earnings will reduce the amount you can receive from Social Security.

Social Security payments rise by 8 percent annually for each year that benefits are deferred, but they will not increase after age 70. Further, even if one spouse has not worked the 10 years required to be eligible for Social Security, he or she can still receive 50 percent of the benefits owed to the spouse, as well as survivor’s benefits if the qualifying spouse predeceases.

Investment Planning

As you approach retirement age, a personalized retirement plan can also shift investments away from stocks and toward fixed-income assets such as bonds. Stocks, or equities, have greater risk, while bonds are generally more secure investments that pay steady income but have lower chances of dramatically increasing in value over time.

The exact portfolio allocation and timing of reallocation will depend on a financial planner’s assessment of an individual’s risk tolerance and projected time until retirement.

Financial planners can also provide retirement savings projections based on different factors, such as different portfolio allocations, clients’ savings rates and rates of return in the market.

Retirement Plans

Financial planners can help ensure that their clients have selected the best retirement plan from their employer and are taking advantage of any contribution-matching policies. They can also assist clients in taking their required minimum distributions annually from tax-deferred retirement accounts to avoid the 50 percent penalty account owners will owe for not making the minimum withdrawal for that year.

When you work with a financial planner who takes a personalized retirement planning approach, he or she can also offer suggestions for your situation, such as contributing to IRAs as well as company savings plans and electing catch-up contributions for clients who are 50 or older. (For 2019, these catch-up amounts are $6,000 annually for 401(k)s and $1,000 annually for IRAs.)

Insurance and Retirement Planning

Insurance is designed to mitigate the financial risk of unplanned major expenses and can be a valuable tool to incorporate into one’s retirement plan. But once again, there’s no one-size-fits-all solution. Talking with a financial planner about your specific situation can be very beneficial.

For example, there is long-term-care insurance. This type of insurance can cover a portion of costs if the insured needs to move into a live-in care facility. However, some policies also cover in-home care, which may require higher premiums. Long-term-care insurance is generally expensive, but clients may be willing to incorporate these premiums into their retirement plan in order to avoid paying exorbitant living assistance costs later in life. Obviously, this varies from client to client.

There’s also life insurance to consider.

Clients may own whole or universal life insurance that will pay out to their estate or beneficiaries upon death. The proceeds can pay for funeral expenses, transfer outright to beneficiaries or be assigned to a trust. Again, a personalized approach can help you pick the best policy for your specific needs.

Estate Planning Objectives

Estate planning is often not conducted alongside retirement planning, but it can be. Financial planners can help clients decide their priorities for the use of their assets upon their death. For example, some clients would prefer to maximize the amount they leave their beneficiaries, while others would prefer to ensure that they have a comfortable retirement lifestyle rather than maximizing their net worth.

Other clients may prefer to establish trusts instead of keeping assets in their own names. Some funds, such as Charitable Remainder Trusts, remove assets from the client’s taxable estate and provide income from the trust to the fund’s grantors during their lifetimes. Other trusts, such as Living Trusts, are taxable but offer several other advantages. For example, they pass assets without probate, which provides privacy and generally ensures assets pass more quickly than with a will, and grantors can appoint a trustee to manage their affairs if the grantor becomes incapacitated.


Your financial and retirement plan can profoundly affect your quality of life during your retirement years. There are many factors to consider with retirement planning, and working with a financial planner can be beneficial. Financial planners can help you thoroughly assess your needs, ensure you are approaching your options from all angles and build a retirement plan uniquely designed around your priorities.