If I Could Only Teach One Financial Lesson

After decades as an financial advisor, I’ve seen a lot of investment fads come and go. The media gets excited about new ideas and strategies that never seem to stand the test of time. And during my work with clients, I’m sometimes asked what the secret to a successful retirement plan is.

The truth is that there are a lot of secrets because retirement planning is complex. But when all’s said and done, if I could give just one piece of financial advice, the answer is obvious to me: proper transition planning. The biggest financial mistake that I see retirees make is not properly preparing during the 5-10 years before they retire.

What is Transition Planning?

So many of us focus on the accumulation of wealth during our working years. Then, we spend plenty of energy planning for the distribution phase when we’ll take withdrawals during retirement. But rarely do we focus on what comes between those two phases, the transition phase as we approach retirement.

Transition planning includes complex analyses to provide for adequate cash flow during retirement, even with many uncertain variables. Though we may not know exactly how much money you’ll need for specific costs, we can forecast using accurate data and plan to leave a cushion to protect your financial future.

Key Elements of Transition Planning

In my practice, I work together with clients to create a detailed income analysis that forecasts how much they may need during retirement, including the following variables:

  • Housing
  • Utilities
  • Food and Entertainment
  • Hobbies
  • Travel
  • Health care
  • Prescriptions
  • Dependent care
  • Inflation
  • Unexpected Costs and Emergencies

The cornerstone of my planning process it to create a strategy to provide enough cash flow during retirement, even though we aren’t sure what the exact costs will turn out to be.

It’s important to calculate these numbers in today’s dollars and to forecast them based on the expected inflation for each individual component. For example, health care costs are expected to increase faster than housing costs. Education costs are also forecasted to increase at a higher rate in the future, so if college planning for grandchildren is in your plan, we’ll want to make the necessary adjustments.

Emotionally Preparing for Retirement

Not only is it important to have a robust and detailed financial plan as you approach retirement, but you will want to emotionally prepare for such a big transition. There are several trends that alarm me regarding those retirees today. The New York Times has reported that:

  • The fastest growing divorce rate in our country are couples over the age of fifty-five
  • About half of Baby Boomers don’t enjoy their first year of retirement
  • Men over 65 have the fastest growing suicide rate

As a trusted advisor, it’s not only my job to prepare you financially for retirement, but also to plan ahead so that you have a healthy and fulfilling retirement. I work with my clients to prepare in advance for the changes in their social lives, day-to-day routines, and family life.

By working together to create and adjust our plan as they approach retirement, my clients can feel more prepared and excited about their retirement years by having a plan that is based in certainty and not luck. To learn more, download our free report, 12 Keys to a Successful Retirement Strategy today. If you need help, call my office at 770.249.7424 or email me today at beau@richlifeadvisors.com.


About Beau Henderson

Beau Henderson is a financial advisor, author, coach, radio personality, and CEO of RichLife Advisors. He has helped over 3,000 clients to not just improve their relationship with money, but to live the life of their dreams.

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RichLife Advisors, LLC provides investment advisory services through Fiduciary Capital, Inc. Beau Henderson is a licensed life insurance professional in GA, SC, TX, CA, IL, KY, OH, MI, PA, MD, and NY.

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