September 24, 2012
A prospective client recently came to Mercer Advisors for an analysis of what he believed was a well-constructed and comprehensive financial/retirement plan. He still had a number of questions pertaining to his timing, lifestyle and payout options, was planning to retire in the near future, and had been assured by his employer’s in-house financial planning team that he could do so easily, and without worry.
Once the Mercer Advisors Certified Financial Planner™ understood the full scope of this individual's retirement goals and expectations, it became clear that without significant modifications to the existing strategy, his
retirement reality would differ drastically (and negatively) from his vision.
The assumptions used to create his original plan had been much too aggressive, and had remained unchanged over time – leaving him just a 35 percent probability for success in his retirement years (Mercer Advisors generally recommends a 70 percent probability for success). Furthermore, his desired retirement lifestyle involved a 200 percent increase in expected post-retirement spending that was wholly unaccounted for in the original plan.
After further discussion and analysis, our CFP® presented a comparative analysis between the individual’s original plan and a Mercer Advisors strategy including a fully comprehensive investment, income and distribution plan built upon realistic assumptions, and aligned with his vision for his retirement. Though he will need to remain in the workforce longer than he had planned, he’ll be able to retire with peace of mind, knowing that his investment strategy is aligned with his vision, and the longevity of his retirement portfolio is no longer in jeopardy.
There is everything to be gained by testing assumptions and gaining clarity regarding your retirement plan, as it’s always better to make modifications while there is still time to effect measurable change. What investor wouldn’t welcome a second opinion – an opportunity to validate success or avert disaster? Either outcome rewards greater understanding and peace of mind.
The Financial Equivalent of “Measure Twice, Cut Once”
You may know people who believe they have little need for financial planning advice or investment management services because their plan for retirement has already been established. This item on their life’s to do list had been checked off as successfully completed. You may also know people who have spent little thought or time on the financial planning process.
What happens if they are wrong? Or arrive at retirement with no plan, or a faulty plan?
Designing a successful retirement strategy and portfolio is not a simple or single formulaic event. Goals, needs and expectations change regularly as life unfolds. In order to remain aligned with your lifelong vision, a comprehensive retirement plan must be established, reviewed and updated on a regular basis to ensure its overall relevance and efficacy.
How often do you review and/or adjust your retirement plan strategy? Is your retirement plan solidly grounded and aligned with your vision and goals for retirement? Have you worked with an experienced wealth management team to establish both a financial planning and investment strategy that provide you with the greatest probability for retirement success – exactly as you have defined it? Furthermore, do you collectively review this plan regularly, modifying when/where necessary, regularly in order to ensure continued alignment with your life vision?
Contact Nate Ricks, CFP®, Mercer Advisors Managing Director, at (888) 642-4636 for a complimentary Wealth Management Consultation – either as a second opinion retirement plan evaluation, or as an introduction to the benefits and importance of establishing a comprehensive financial plan. The consultation will include any/all of the following, as determined by your unique needs and realities:
• wealth management consultation
• portfolio design review
• analysis of assumptions used to build overall financial and retirement plan
A Mercer Advisors Wealth Management Consultation can either validate your existing financial/retirement plan or alert you to a risk of failing or falling short on some level. We’ll suggest ways to remedy gaps to help you avert misfortune over the short-term, long-term or both. For the novice, we will provide a foundational awareness of the vital need for some level of financial planning.
Mercer Global Advisors Inc. is registered with the Securities and Exchange Commission and delivers all investment-related services. Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved with investment services.