Those in the Gen X crowd intend to work longer than their predecessors. However, they expect their retirement work to be more flexible, fulfilling and rewarding. They want it to provide a greater purpose as well as social interaction. They’re the next generation that’s quickly approaching retirement and their hands-off approach to pre-retirement planning and preparation is alarming. *
Why Pre-Retirement Planning Matters
Individuals born in 1965-1980 require more in-depth planning applications as the number of moving pieces and variables increase. Also, they are often entering the peak earnings phase of their career. This is the time when asset and tax optimization is absolutely crucial to a successful retirement. Avoiding the conversation now could cost you substantially when retirement is imminent. As you age, options you may have had can become more costly, and some dwindle away completely. So don’t wait until it’s too late.
Asset Optimization
According to PlanSponsor.com, Gen X saves around 8% of their income and only 14% have a retirement plan. They have a median of $66,000 saved in all household retirement accounts. Meanwhile, about 14% are very confident they will achieve their desired retirement lifestyle. These statistics point to one revealing truth: Gen-Xers need a plan to optimize their assets more effectively. Our cost efficient investment philosophy may be able to keep you and your family from being another statistic.
Risk Management
People that are middle aged typically have more. They are often home owners and park two or more cars in the driveway. They also have investment assets and 1.5 little one(s) to provide for. These are all reasons for a risk analysis encompassing everything from life, health, long term care, and personal property protections. Most practitioners don’t have a high level conversation about these investment vehicles. Yet some of them could play a role in, or outside of their estate. Risk mitigation is more affordable when the covered persons are younger. The time for a discussion may be now.
Tax Planning
The tax return is not only a financial blue print, but it is specific to you. Most people entering the pre-retirement phase don’t think much about the tax treatment of their assets. However, it can greatly impact the level of freedom they have during retirement. That is why we believe your investment professional should also be a tax advisor. Individuals need to understand where, and how they will source income when they may need it most. A multifaceted firm can help you build a multifaceted retirement plan.
Estate and Family Planning
In our experience, people often focus on preparing for their own retirement above all else. As a result, they put protecting and planning their estate on the back burner. Estate planning is arguably the most time sensitive aspect of a financial plan. Many people make these maneuvers around the time of retirement, but planning should start prior. There are many options for shifting and leveraging assets in, or outside of the estate. Knowing what your options are sooner is often better.
* https://www.aarp.org/money/credit-loans-debt/info-2015/gen-x-interesting-finance-facts.html
