Statistically, most Americans aren't confident they're going to be able to retire when they want, with the lifestyle they want, so the poor prognosis on their future doesn't sit well with them. Joshua Kadish, an RPG Life Transition Specialist, says what's interesting is they're feeling this way even with an advisor. What he's found is that most people end up outgrowing their advisor, so planning during the accumulation phase of your life is not nearly as complex as planning for the distribution phase of your life.
You need to make sure you have a Social Security optimization analysis prepared and that you design and implement a retirement income plan and identify where you'll be drawing money from, says Kadish. In retirement, it's like needing a general practitioner to needing a specialist.
Unfortunately, he thinks the financial services model has been broken and it trains people to think that when you're young, you can afford to be more aggressive and as you get older, you should become more conservative. He says that's certainly not always the case. It doesn't matter if you're 20-years-old or 80-years-old because if you lose half your money in a market downturn, you still need 100% to get back to where you were. His advice is to always have a plan based on your own specific situation and to go out and get a full "financial physical." At the end of the process, Kadish gives people a prescription that will allow you to accomplish your goals. The beauty of this is that if you're working with a fee-only advisor who's there to just educate you, and then you take that prescription and get it filled at any pharmacy you like, you pay to get educated and not sold something.
"Anybody should be able to get independent, non-biased and conflict-free advice on their own situation," explains Kadish. The question is, what is the advice, which should all start with a plan based on their own situation. It's better to know early on if the plan you have will not accomplish your goals, rather than going down a long course and run out of gas before you hit the finish line, he says.
Kadish says most people aren't talking to their advisors about how they can get extra money out of the Social Security system, reducing their taxes by taking money from the right places or risk management. When people successfully reach their goals, they did so because they successfully managed the risk along the way, he says. It's not about having the highest returns, rather that when things are going south, you have some protection and you end up winning that game. It's important for people to understand what their advisor can and cannot do because many people have outgrown their advisors that have focused too much on their investments and their performance.
Joshua Kadish is a transition specialist with RPG Life and is frequently featured in the national media as a financial expert. He spoke with Retirement News Today, providing online retirement news video content. Retirement News Today is a featured network of Sequence Media Group.