Retrirement Planning
More than ever, retirement today means different things to different people.Some have become financially independent by working in one profession for years and want to try an entirely new line of work. Others want to retire completely before they're 60. Some want to travel. Others want to focus on volunteer work. Some yearn for warmer climates. Others want to live close to their kids and grandkids.Chuck Noparstak, CFP, understands that retirement lifestyle choices have become as diverse as people themselves, and he offers retirement planning expertise to help clients realize their unique dreams through careful financial preparation and prudent asset management.Chuck begins the retirement planning process by asking clients toenvision their ideal retirement. Will they continue living in their current home? Or do they plan to downsize and move? If they plan to move, what are taxes and the cost of living likely to be in their new location? Will they be working part-time or not at all? Will they be traveling? Do they plan to become heavily involved in hobbies or other activities? When do they expect to retire? Will one spouse retire before the other?Once Chuck understands what retirement means to a client, he focuses on gathering information for the accumulation phase and the income phase of personal retirement planning.The accumulation phase includes the years leading up to retirement. During these years, clients typically are working, raising children and saving for retirement as much as they can. Chuck works with clients to determine their current annual income and expenses, to project a retirement date, and to estimate annual income, expenses and savings for the duration of their pre-retirement years. He also takes into account special needs that clients might have, such as caring for a child with disabilities, sending kids to college, and handling the costs of elder care.The income phase begins upon retirement. It's the time when many people start to draw upon their nest egg. For this phase of individual retirement planning, Chuck focuses on clients' hopes and dreams for retirement, projecting expenses and required income based on where they intend to live, how they plan to spend their time, and the standard of living that they expect to enjoy.After discussing clients' accumulation and income needs, Chuck develops their individual retirement plans with one overriding goal: Provide a stream of income for life, growing it as needed to help them actualize their ideal retirement and to leave a financial legacy for their heirs.For the accumulation phase of personal retirement plans, he factors in an average annual inflation rate of 3 percent for expenses; for the income phase of a retirement plan, he factors in an average annual rate of return on investments of 7 percent. He carefully aligns investment-return targets with clients' current and projected lifestyle needs so they can enjoy the standard of living that they desire while maintaining their purchasing power and their portfolio's capital.With people living longer, Chuck knows that retirees' biggest concern is outliving their money, so he plans for a retirement income phase that extends at least through age 95. He factors in the likelihood of healthcare expenses, and he considers estate-planning concerns, including whether the client wants to leave a financial legacy and how much the client would like to pass on to loved ones, favorite charities or other organizations.Chuck always develops individual retirement plan options within the larger context of clients' overall financial plans and wealth management strategies, addressing their lifestyle needs and objectives before and during retirement and taking into account their risk tolerance and investment time horizon.He then models portfolios with different combinations of asset classes and investments to determine which ones are likely to produce returns that will meet the client's short-term and long-term objectives. Chuck discusses model-portfolio choices with the client and selects the one that the client deems most appropriate for him or her.