Do You Really Need a Written Retirement Plan?
I recently saw some interesting findings from LIMRA's Retirement Income Readiness Report. According to the report, 88 percent of people approaching retirement have thought about how they will generate retirement income, yet about half do not have a recently updated written retirement plan.
That raises an important question.
Do you actually need a written plan to retire?
Technically, no.
You do not need a written retirement plan any more than Ohio State needs a game plan to walk onto a football field.
They could show up and wing it.
But I certainly would not recommend it.
Why Does a Written Retirement Plan Matter?
Think about a great football team. For me, it’s my Buckeyes.
You can have talented players at every position. You can have a great quarterback, great receivers, a strong defense, and experienced coaches.
But when you are facing tough competition, talent alone may not be enough.
You need a game plan.
Why?
Because everyone needs to understand what they are trying to accomplish and how all the pieces work together.
Retirement works much the same way.
I meet people who have done a tremendous job saving money. They may have $500,000, $1 million, $2 million, or considerably more.
They look at their investment accounts and say, "Greg, look how well I've done. Why do I need a retirement plan?"
My answer is simple.
Accumulating money and distributing money are two very different games.
Retirement Changes the Financial Game
When you are working, you may contribute money every paycheck. Your employer might contribute too. If the market falls, you are still buying investments and potentially benefiting when prices eventually recover.
Retirement changes that equation.
Now you may be withdrawing money.
You may be depending on those investments to help pay your mortgage, utilities, travel expenses, groceries, healthcare costs, and everything else life throws at you.
That is when having a written strategy becomes much more important.
A retirement plan can help answer questions such as:
Where will my monthly income come from?
How much can I reasonably withdraw?
What happens if the market falls?
How could taxes affect my income?
When should I claim Social Security?
What happens if one spouse dies?
What if our expenses increase?
A written plan gives you something to measure those decisions against.
I believe retirement should be more than a collection of accounts.
It should be a coordinated strategy designed to help those accounts work together toward the life you want to live.
If you are approaching retirement and do not have a written strategy for income, investments, taxes, and the unexpected, call Legacy Retirement Group at 614 336 7660 to schedule a complimentary conversation with our team.