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Making It through Retirement

Most people when they get their first job start thinking about retirement. It seems like a faraway dream for many, but may be closer for other. How can a person prepare for retirement? What are their goals in regards to their retirement money? By looking at a client’s goals, determine if they want to have money to last through their life expectancy or make it last for generations. Knowing the client’s goals will help determine how to invest and help forecast what the returns will be on investments.

There are many unpredictable parts to determining the return on your assets. There is never an ironclad guarantees that your returns will come back at the rate you estimate. By creating forecasts at different rates and risks will help clients determine what could be a possible return on their investment.

The first step to consider is making sure there is adequate income generated and guaranteed through retirement. Annuities are good way to create a stream of income, as long as the underlying issuer is strong, but do not put all your eggs into one basket. It is better to have a diverse portfolio then to put all your money in one investment.

There are many variables that will make forecasting difficult to predict, including inflation, contingencies, and many other unknowns that can come from anywhere. Evaluate the effect of inflation on assets by calculating higher inflation rates than what we experience in today’s low-inflation environment. This will help to combat any changes that could affect income. It is also important to run scenarios over catastrophic long-term issues to insure that there is income to cover anything that could happen.

While some people just want to have enough to make it through retirement, some clients would like to leave a legacy for their children or multiple generations. To help achieve this goal, it is important to keep the burden of estate taxes as low as possible.

Overall, it is the client’s money and it is important to help them achieve their goals in how they want their money to work for them.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.