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Why Plan for Retirement with Aspen Investment Management?
The vast majority of our clients are either in the asset accumulation phase or the distribution phase of their financial journey.
In the asset accumulation phase, individuals are focused on saving so that they can live the life they envision for themselves in retirement. In the distribution phase, they are living that life they worked so hard for.
At Aspen, we work with our clients in the asset accumulation phase by creating a diversified investment portfolio, with an asset allocation tailored towards the specific goals of each client. Once in the distribution phase (retirement), we position the portfolio to best meet any income needs, while also focusing on preserving and growing the existing nest egg.
You can rest assured that we are always acting in your best interest since we are a Registered Investment Advisor. We are bound to a fiduciary standard under the Investment Advisor Act of 1940 to always act in your best interest, always act honestly and ethically, remain independent and unbiased, thoroughly understand your needs and concerns, and ensure communication with each and every one of our clients is open, consistent, and confidential.
We promise to take all the time needed to understand your needs and provide honest guidance based on our significant experience. We do not receive commissions or other compensation beyond our stated management fee, thereby preserving advice free of conflicts of interest.
How Can I Gauge My Retirement Standing?
It may seem like only yesterday that you were starting your first job and retirement planning felt decades away. The fact of the matter is, time keeps marching, and your hopeful retirement date is always getting closer. Whether you are in your 20s, 30s, 40s, 50s, or even closer to nearing retirement age, it is never too early to start assessing your retirement timeline and standing to see if you’re on track for your goals and what to change if you are not.
As Forbes said this year, “It’s no secret that most Americans aren’t saving enough for retirement. According to the National Institute on Retirement Security (NIRS), more than 75% of Americans have retirement savings that fall short of conservative savings targets, and 21% aren’t saving at all. To assess whether you fall into the group of people who are on track or not, here are some metrics:
Center for Retirement Research at Boston College, Fidelity, and many other reputable financial institutions recommend saving 15% of your income annually.
This assumes you’ve been consistently putting away 15% of your income for most of your working years, beginning by 25 years old at the latest. As Forbes explains, “To retire comfortably by following the 15% rule, you’d need to get started at age 25 if you wanted to retire by 62, or at age 35 if you wanted to retire by 65.”
Be aware this 15% plan is assuming to build you SOME of your retirement fund but not all of it. It’s prediction intends to “provide you with steady retirement income that lasts into your early 90s, at a rate of around 45% of your pre-retirement income.”
Be mindful of what you might be spending in retirement and that certain expenses may increase, such as medical expenses. That 15% rule “assumes that you need an annual income in retirement equivalent to 55% to 80% of your pre-retirement income to live comfortably. Depending on your spending habits and medical expenses, more or less may be necessary. But 55% to 80% is a good estimate for many people.”
Lastly, the 15% rule doesn’t plan to cover ALL of your retirement income- it assumes you will also draw from Social Security and Medicare.
It is important to note that while the “15% rule” is a good place to begin, every individual’s financial situation is different. You may need to save more or even less than that to meet the goals you have for your retirement lifestyle.
One of the key steps in gauging whether or not you’re saving enough for retirement is to use projection tools to forecast your asset growth over time and consider how much money you’ll need each year in retirement. A free calculator can be found at Nerd Wallet.com, but these free tools are much more simplified than the complex, multilayered algorithms we run. You may get a ballpark idea, but it won’t give an estimate that you can truly rely on because it doesn’t cover enough of the valuable inputs that need to be considered.
Aspen utilizes Envestnet’s MoneyGuidePro software to better understand if your investment assets will be sufficient to fund your goals in retirement. Based on the results, we can make recommendations to get you on track, or keep you on course and make adjustments along the way if your goals change. Please give us a call if you’re interested in creating a comprehensive retirement plan through our extensive analytical software.
Generally speaking, the longer your assets can spend invested in the market, the better chances they have of meeting predicted growth projections. Therefore, it’s better to invest early and let your assets grow over time rather than trying to “time the market,” resulting in the phrase “Time in the market is better than timing the market.”
You’ll also want a fine-tuned strategy for when and how to withdraw certain assets based on when you’ll be taxed. Timing when and how you withdraw your 401k assets, for example, can result in thousands of dollars you get to put in your pocket or thousands of dollars lost in taxes and penalties. Once you reach the distribution phase of your financial journey, it may be beneficial to work with a professional (if you aren’t already working with one) to set up a plan on best practices for distributing your assets in order to fund your lifestyle and minimize your taxes each year.
So, What Should I Do Right Now?
Whether you are in the accumulation phase or have already retired, a sound retirement strategy is critical.
We can help you develop a comprehensive plan for:
Identifying and pursuing your lifetime income goals
Minimizing taxes on income—now and during retirement
Evaluating the variables in your retirement plan to ensure alignment with your objectives
401(k) and other workplace distribution options
IRAs (Traditional and Roth) and Conversions
IRA Consolidations and Transfers
Retirement Income Strategies
Our fiduciary role doesn’t end after the initial meeting or portfolio implementation phase. We regularly review your portfolio and monitor your investments, so you have time to do the things you care about most, and the peace of mind to enjoy doing them.
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