You probably started thinking about it years ago. What would it be like to do something different with your life? When can you start taking those month-long trips you’ve dreamt of? Which of your hobbies will become your new passion?
You’re mentally ready to retire. But are you financially ready to retire? Springwater can build you a plan that will help you find out.
How do we do that?
The Initial Consultation
We start the retirement planning process with prospective clients by inviting them to meet with us for a complimentary consultation. In that conversation we invite you to tell us about your plans. When would you like to retire? What do you have planned? What are your concerns when you think about retiring?
We introduce our firm and our team of advisors. We describe our services (financial planning and investment management) and how we’re compensated for our work. We explain how we build retirement plans, how we evaluate them and how we “stress test” them.
We also provide you with our privacy policy, our fee schedule, and required disclosure documents (Form ADV 2A brochure and Form CRS).
The Engagement Letter
If you feel we can help you, we’ll send you an engagement letter. In the letter we review our initial meeting, we describe the planning process, and we provide a not-to-exceed flat fee for the plan we’ll build for you.
The Financial Planning Agreement
If you decide to move forward, we’ll send you a financial planning agreement. In the agreement we define the scope of our retirement planning engagement with you. We also confirm the agreed not-to-exceed fee and the initial deposit.
Gathering Information
To properly build a plan for you, we need to ask you to share with us a lot of personal information. We gather this information through various questionnaires. We use a general client questionnaire to capture most of the information, an expense worksheet to project your spending, a health status questionnaire to project your health care costs, an investor risk assessment to determine your tolerance for investing risk, and various longevity questionnaires to estimate your life expectancy. We’ll also help you obtain your projected Social Security benefits.
We store (and exchange with you) all information in a secure online vault provided by Citrix ShareFile. We won’t send important documents by email.
Building Your Plan
Once we have all the data we need to build your plan, we enter it into our financial planning software. We then send you a “plan data report”, which contains all of the inputs and assumptions for your plan, and ask that you confirm it’s (a) complete and (b) accurate. At this stage, we often add information and make changes.
Once you confirm the plan data is complete and accurate, we set up a time to review the plan, either in-person or via a shared web session. During this plan review, we explain how we’ve built your plan and the assumptions (e.g., inflation, tax rates, investment returns) in it.
Analysis and Assessment
With the data now properly entered, we let the software run. There are several questions we need to answer. Examples: Can you retire when you intend? Do you need life insurance in retirement? Is your investment asset allocation consistent with your economic needs and personal preferences? How will you pay for health care?
Alternative Scenarios
You may have other retirement scenarios that you’d like us to help you consider. What if you retired to a different state (with a different tax rate or cost of living)? What if you worked part-time for several years before fully retiring?
Stress Testing Your Plan
Once you’ve decided on the most realistic retirement scenario, we’ll stress test for things that could “go wrong”. What if you live beyond life expectancy? What if the stock market crashes just before you retire? What if tax rates go up? What if you need care late in life, at home or in a facility?
The Plan Summary Letter
At the end of the planning process, we’ll present you with a written summary letter. We’ll offer our observations of your unique situation. We’ll also provide recommendations. We also acknowledge that financial planning is a dynamic process. Things will change and it’s important that we keep your plan current in the years ahead.
Implementation
The recommendations in the plan summary letter describe actions you’ll need to take to make your plan stronger. Examples: Change your asset allocation. Explore long-term care insurance as a way to pay for potentially costly health care. Convert traditional IRA funds to Roth IRA funds. Review your most recent tax returns for ways to reduce your taxable income.
While we’ll be able to help you with some of the action items that come out of the planning process, you’ll need the support of a team. That team might include insurance agents, an estate planning attorney, a tax professional and an investment advisor.
Monitor and Update/Adjust
We often compare navigating retirement to sailing. Once you leave the safety of the harbor, the wind (or lack thereof), currents and storms can push you off-course. You’ll have to make periodic adjustments to stay on-course. Similarly, your retirement will be filled with things that can affect your journey. But, if you pay attention and adjust your sails as needed, you’ll enjoy a financially secure retirement … and peace of mind.
Getting Help From an Advisor
If you need help planning for retirement, consider working with Certified Financial Planner™ (CFP®), a Chartered Financial Consultant® (ChFC®), Retirement Income Certified Professional® (RICP®) or Certified Public Accountant (CPA) with the Personal Financial Specialist (PFS™) credential. Advisors who hold this designation had to meet rigorous educational, experience and ethics requirements.