Tips for a Secure Retirement

As the baby boomer generation enters retirement, they are faced with multiple concerns; at the top of the list are outliving their savings and the possibility of becoming disabled along the way. While working with retirees or those approaching their golden years, I recommend creating a cash-flow model to help build their portfolio from the ground up. Below are tips on helping clients approach retirement comfortably and worry-free.

1. Have an emergency reserve. The first step is to determine how much income your client needs to meet their regular monthly expenses. Then, I recommend creating a buffer account of cash for what we call "life events." These life events are typically costly and unplanned. It's best to have your clients save 12 to 24 months of their fixed expenses in cash into this account.
2. Owe nobody anything. If clients have any debt, try to help them eliminate it before retiring. It's best to enter retirement debt-free.
3. Have consistent income on a guaranteed basis. Make sure your client is meeting or exceeding their ongoing current living expenses on a monthly basis. A guaranteed income can come from a variety of sources; Social Security, a defined benefit pension plan or an annuity. If you chose an annuity it could be an immediate annuity or a deferred annuity with an income rider. It is critical to secure a base of income for a retired client. It's one thing to run out of money, but another to run out of income. 
4. Build a well-rounded portfolio. After solving the cash flow issues, the remaining investable assets should be put toward building a well-rounded portfolio to hedge against future inflationary costs. This should consist of equities, bonds and cash.

Our goal is to offer clients guidance throughout their financial life stages. We do this by helping them pay off any outstanding liabilities to keep their overhead low, assisting them in setting up their own financial portfolio to have a sufficient amount of cash and giving them access to funds without taxation.