Financial and Retirement Planning in Hampton Roads
Having recently returned from a Financial Planners Association Conference in Minneapolis, where the temperature was already hitting the freezing mark, I quickly remembered why I like living in Hampton Roads. I love the changing seasons where we can experience some snow in the winter with just a three-hour drive to ski resorts or the heat and humidity of the summer while we bask in the sun and cool off by the Atlantic Ocean.
Even more than the weather, one of the things I have enjoyed about being a financial and retirement planner in Hampton Roads is having the opportunity to advise many military retirees in our community. Additionally, as wealth management advisors, we work with many civil servants who support the armed forces and Department of Defense, and those who work for companies that support the military in some capacity through government contracts. We are a community that proudly supports our active and retired military, and we’re honored to be a part of that.
Many of these retirees we work with make up the more than 76 million baby boomers born between the years 1946 to 1964. This population boom has resulted in a staggering 10,000 individuals a day reaching the key age of 65. For those who fall into this category in our community, they are looking for direction on how to navigate retirement once they arrive at this point. Our challenge as wealth management advisors at Tull Financial Group is to get our clients to what many in the financial advisory profession call “retirement ready”—a target that is different for everyone, but that has changed dramatically over the last few decades across the United States.
One of the first major changes for Boomers who are reaching retirement age is that their life expectancy is longer. It is forecasted that by 2050, many retirees will spend an additional 25% of their lives in retirement. This means significant savings will need to be accumulated to draw upon to meet a longer life expectancy as well as the ever-increasing cost of health care. Couple this with the concern over social security solvency. Boomers want to know their social security will be there when they need it. When you pull all these concerns together, even those who are receiving military retirement benefits will still need to plan for their own retirement savings.
During a typical client meeting of ours here in Hampton Roads the two major concerns we hear raised are that they don’t want to lose their money that they are putting into retirement savings, and they don’t want to outlive that money either. While no financial planning advisor can guarantee that these two concerns won’t come to fruition, there are steps one can take to better plan for potential issues in retirement.
As a wealth management advisor, I often tell my clients that if they can tell me how much they plan to spend during retirement and how long they plan to live in a best-case scenario, then it’s just a math equation. We begin by estimating your expenses and use the average life expectancy for our community. We then calculate the nest egg that needs to be available to you before you can begin the draw down period while also factoring in what you will be paid by Social Security.
Regarding any investments you may make, you will need to be sure that you are comfortable with the amount and type of risk in your portfolio. As we have seen recently, markets go through cycles of ups and downs, so don’t overreact. Our advice is generally to focus on creating a flexible portfolio that can be updated regularly to reflect changing market conditions and your retirement objectives. Finally, to make sure you have a solid plan in place to enjoy your golden years, considering hiring a Certified Financial Planner professional to advise you along the way. You don’t have to do it alone—we can help!