FOCUSED RETIREMENT PLANNING

CHANGES TO RETIREMENT SAVING

Providing for retirement has changed over the last two decades. Company funded pensions plans are becoming scarcer. Benefits have been lost as companies failed. Tax-deferred retirement plans have gained the forefront. The difference today is significant. In the old pension plans, the company promised you a guaranteed income for life. The pension plan was professionally managed. The 401(k) and 403(b) replacements have removed both the guaranteed income and the professional management. The financial risk that the company used to bear has been placed squarely on the shoulders of the retiree. Continuing inflation compounds the problem. It will continue to erode your purchasing power long after you can no longer count on pay raises to keep up.

WHAT YOU CAN DO

In this new environment, it has become your responsibility to provide for your own retirement. Social Security can help, but for most people it is not enough, and it may have future solvency problems of its own. You will need to start saving in the tax-deferred plans as early and as much as possible. You may need to contribute additional savings to taxable accounts as well.

WHAT LFM&P CAN DO

LFM&P can help you determine how much you need to save and how to allocate your funds. We begin with your desired lifestyle and estate goals. We project how much money you will need to live. Because investment gains are typically a necessary and important contributor to retirement savings, we look at your risk tolerance, suggest an appropriate asset allocation, and calculate how much you will need to save. Investments have risk though. The “average” investment results used to calculate many retirement projections are only of partial value to you, and may actually be harmful. You do not want to plan to have a 50% chance of running out of money in retirement. We will help you reduce this chance by using historical data to simulate most possible investment results and determine the probability of being successful.

For people who have already accumulated retirement savings and are either about to enter retirement, LFM&P can also help by advising how income should be taken to provide essential liquidity and minimize the effect of taxes. Additionally, LFM&P's risk-managed investment approach is most applicable for risk-sensitive people like those in retirement.