Do you know how much income you will need in retirement? Will you have enough income to cover your basic, non-discretionary expenses? What about discretionary expenses such as trips, visiting family, gifts, ballgames, dinner out? How much of your income is guaranteed and how much will depend on the financial markets? Do you intend to spend principal or just interest & dividends?

Would you like to leave an inheritance? Will you use the sale of a business, house or other non-liquid asset to fund your retirement? Have you considered taxes and inflation? Do you have an income plan to include timing, source and tax considerations for your income? Have you factored in the potential for rising healthcare costs?

Have you considered steps to minimize variability of returns in your income & investments? Are you comfortable with your plan? How often do you meet with your advisor to review your progress? Are you on track to achieve your retirement goals? Do you feel overwhelmed after reading these questions?

Retiring from our lifelong career is both exciting and frightening at the same time. It marks the ending of one phase of life and the beginning of another. Some dream of this day while others view it with dread and trepidation.

The questions noted above are important but also incomplete. Each future retiree must address those questions and more that are unique to his or her situation. At Gaskin Asset Management, we feel strongly that one of our primary roles is to help our clients identify and clarify their short-term objectives and long-term goals before even discussing investment options. This is critical because just as a business or charitable foundation manages its assets to accomplish goals, we must help our clients match their retirement assets against their long-term income needs and goals. We, in turn, measure our performance against our clients’ ability to achieve their investment goals.

A Case Study

Dennis has spent the past 30 years of his life working 60-hour weeks for a Fortune 500 company as a comptroller. He’s done an excellent job saving income on a pre-tax basis in his 401(k) and has built up other taxable investment accounts. Since his parents lived into their early 90s, he’s not sure if his retirement account will last long enough. Further, his wife, Sally, suffers with multiple sclerosis and has recently started urging Dennis to step away from his current position to spend more time with her. At 62 years old, he’s eligible to draw benefits from Social Security but isn’t sure if he should begin now. He is not yet eligible for Medicare. He’s also concerned that Sally’s health challenges may put undue pressure on their income and savings accounts.

Dennis worked with our team to identify and clarify his retirement needs and goals to include planning for the potential long-term care needs for Sally.  With needs and goals quantified, we were able to develop a customized strategy for Dennis that would give him the confidence to renegotiate his role and hours with his company. We determined that an adjusted investment strategy and reallocated taxable investment portfolio would enable him to supplement his reduced work income with cash-flow from his investments until full retirement. We conducted an analysis of his Social Security options and determined that due to his long life expectancy and Sally’s health concerns, he would likely benefit from waiting until age 70 to fully retire and begin receiving Social Security benefits. We now meet face-to-face with Dennis and Sally on an annual basis to review their strategy and make changes where necessary as he approaches full retirement. We also contact them quarterly throughout the year by telephone and email to provide updates related to their accounts.

This is a hypothetical example for illustration purpose only and does not represent an actual client experience.

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