Welcome to the second installment of this two-part blog series. Last week, Solana Beach asset management advisor John Lohrenz explored the use of online retirement calculators as a means for painting a picture of your financial future. We left off with the important sentiment and question:
It can seem a little frightening that a decision that will impact your life, the life of your spouse and the lives of your family for the next 25 years can be made in less than a minute by an online tool. So, how accurate are these analyses and should Solana Beach residents be investing their trust and their financial decisions in the outputs provided?
“The right financial planning is essential for retirement. Provision needs to be made for you and your family so that you can seek to live the quality of life you’ve grown accustomed to for the remainder of your life,” explains Solana Beach asset management advisor, John Lohrenz.
“Additionally, you’ll want to pursue the things – the hobbies or travels – you’ve always wanted to, but never had the time for when you were a working professional. In other words, the last thing you deserve to be doing in retirement is counting your pennies.”
Planning for retirement is an incredibly complex process; it’s not simply a case of money in, money out. Your plans need to include a plethora of considerations and costs, including your healthcare needs as you age, your kid’s education and the creation of a decent legacy, which you can leave to your spouse and/or children. Each of these concerns affects the other and subtle variations in one can have a myriad of effects on the others. In other words, your retirement picture can fluctuate dramatically with slight changes in your situation.
Market Variability, Economic Fluctuation, Changing Interest Rates…
One accident or bout of illness can have a far-reaching impact upon your retirement picture. Fluctuations in interest rates, stock market returns and after-tax returns also have a firm grip on your income at the end of the month and unfortunately, no online retirement calculator tool can possibly include all the considerations and what-if scenarios necessary to provide you with a high-resolution picture of your financial future.
“Any plan needs to be based upon a number of assumptions, but this doesn’t mean that what we project for the future will be realized. Failure to achieve one assumption could make or break your retirement plan,” says the Solana Beach asset management advisor. “Putting your absolute faith in an online tool, which fails to take into account the variability of the markets and the economy, could prove to be terribly erroneous.”
“This is why active and dynamic wealth management and retirement planning is so crucial. Life changes, the economy fluctuates, interest rates oscillate and your needs change. Having an asset management and financial advisor manage your wealth throughout retirement is way smarter than trusting the output of a one-dimensional Internet tool. This is because we adapt your retirement plan and your portfolio to consider any changes, variations and oscillations that might constitute a severe blow to your assets.”
The future can never be predicted with any modicum of certainty. Any retirement plan needs to be dynamic and it needs to shift with changes in the markets, economy and your personal situation. In reality, what actually happens is rarely what you planned to happen, so your financial success really hinges on the intelligent and dynamic management of your assets when things go right AND when they don’t.
If you have any questions at all or would like individualized investment advice from our Solana Beach asset management advisor, please contact JKL Wealth Management at:
Phone: (858) 535-1705
Fax: (858) 535-1701
Alternatively, fill out the Contact Form and we’ll get back to you shortly.
731 S. Hwy 101, Suite 2K, Solana Beach CA 92075
Securities and Advisory services offered through LPL Financial, a registered investment Advisor. Member FINRA/SIPC.