Contributed by: Nick Defenthaler, CFP®, RICP®
Mount Everest. One of the most beautiful natural wonders in the world. With an elevation of just over 29,000 feet, it's the highest mountain above sea level. As you would expect, climbing Mount Everest is a challenging and dangerous feat. Sadly, over 375 people have lost their lives making the trek. However, one thing that might surprise you is that the vast majority who have died on the mountain didn't pass away while climbing to the top. Believe it or not, the climb down or descent has caused the greatest fatalities.
Case in point, Eric Arnold was a multiple Mount Everest climber who sadly died in 2016 on one of his climbs. Before he passed, he was interviewed by a local media outlet and was quoted as saying, "two-thirds of the accidents happen on the way down. If you get euphoric and think, 'I have reached my goal,' the most dangerous part is still ahead of you." Eric's quote struck me, and I couldn't help but think of the parallels his words had with retirement planning and how we, as advisers, help serve clients. Let me explain.
Most of us will work 40+ years, save diligently, and hopefully invest wisely with the guidance of a trusted professional and the goal of retiring and happily living out the 'golden years.' It can be an exhilarating feeling – getting to the end of your career and knowing that you've accumulated sufficient assets to achieve the goals you've set for yourself and your family. However, we can't forget that the climb is only halfway done. We have to continue working together and develop a quality plan to help you on your climb down the mountain as well! When do I take Social Security? Which pension option should I elect? How do I navigate Medicare? Which accounts do I draw from to get me the money I need to live on in the most tax-efficient manner? How should my investment strategy change now that I'll be withdrawing from my portfolio instead of depositing funds?
Even though you've reached the peak of the mountain – aka retirement - we must recognize that the work is far from over. There are still monumental financial decisions that will be made during the years you aren't working that most of us can't afford to get wrong. Ironically, this is when we find that many folks who have been fantastic "do-it-yourself" investors ultimately reach out to establish a professional relationship, given the magnitude of these ongoing decisions. They are ready for the "descent" and wish to delegate the financial matters in their lives to someone they trust. Our goal as your trusted advisor is to serve as your financial steward and help guide you, so you can focus your well-deserved time and energy in retirement on areas of your life that provide you meaning, fulfillment, and joy.
As with those who climb Mount Everest, many financial plans that are in good shape when entering retirement can easily be derailed on the descent or when funds start to be withdrawn from your portfolio – aka the "decumulation" phase of retirement planning. A quality financial and investment strategy doesn't end upon retirement – this is when proper planning becomes even more critical, especially during periods of uncertainty and market volatility like we're currently experiencing. Reach out to us if we can help you on the climb – both up and down the mountain.
Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.
Any opinions are those Nick Defenthaler, CFP®, RICP® and not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc.
Investing involves risk and you may incur a profit or a loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.