Challenges with the Mindset Shift: A Common Experience for Retirees

Our office has the privilege of not only managing client assets, but coaching folks through life milestones. I personally have met with a few clients recently that have been experiencing what we call, “challenges with the mindset shift.”

Most investors we work with invest 30 plus years to accumulate and build their family’s net worth. One of the most enjoyable aspects of our job is to help folks understand when they can retire with a high degree of probability based on their nest egg and spending habits. 

However, a common occurrence we see with many of our clients after this great life-achievement, is learning how to spend their hard-earned investment portfolio. Below are the considerations we walk through with our clients to educate on this topic:

Understanding “Sustainable Withdraw Rate

Looking at a client’s liquid net-worth and other income sources come into play here. For instance, a retired couple may have $1 million worth of investment accounts with us and spend $30k a year off the accounts including taxes due. If you perform the quick math, they are spending 3% of their nest egg with us. We help folks understand, based on this spending rate, how long could the dollars last.

Software Stress-Testing with increased living expense spending

Our financial planning software allows us to compare our clients planned spending to additional scenarios including spending more than planned in retirement. Many times, we find showing our clients spending much more (including inflation assumptions) than they currently are and how that could affect their nest-egg brings a sense of clarity in many instances.

The financial planning process contains many variables, but these are 2 important topics we wanted to help investors learn more about. Investor education is at the forefront of our process and we hope to add value when possible!

The information provided here is for general information only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All investing involves risk including loss of principal. No strategy ensures success or protects against loss.

Securities offered through LPL Financial, Member FINRA/SIPC. Marzano Capital Group is another business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance LLC, a registered investment advisor. Independent Advisor Alliance is a separate entity from LPL Financial.

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