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    Financial Planning Puts The Gold In Golden Years By Susanna P. Barton

    By Susanna P. Barton


    Get out your calculators, kids – it’s time to solve some advanced senior equations with a little Grand Planning and real talk about how it all adds up.

    Ugh. There is nothing I dread more than budgeting and financial planning. Numbers scare me and money planning makes me feel restricted and uncomfortable – like expensive skinny jeans after the holidays. But like a lot of adults, I need to put my big girl pants on and overcome those fears because the only thing scarier than financial planning for life’s second half is NOT doing it.

    And according to statistics, most people aren’t.

    An April 2023 study from financial services firm Credit Karma showed that 27 percent of people over the age of 59 have no retirement savings whatsoever. Poverty seems to be following suit. Data from the National Council on Aging shows more than 16.5 million Americans over the age of 65 are economically insecure – meaning, they are living at or below 200 percent of the federal poverty level of $45,760 per year for a single person in 2021, according to NCOA. A recent study from Northwestern Mutual shows people think they need $1.5 million to retire, yet most have saved only about $88,000.

    Whether it’s a lack of planning or an underestimation of retirement costs, many active adults in this age bracket don’t seem to have what they need to get by. And how much do we need to retire exactly? According to a
    March 2023 article by Andrew Rosen in Forbes which quoted a study from the Economic Policy Institute, the median retirement savings amount for working households in this country is $95,776. And that isn’t enough. In the article, Rosen writes that the Federal Reserve’s “Report on the Economic Well-Being of U.S. Households in 2019” indicates that “60 percent of Americans either do not realize if they’re on track or are unsure if they’re on track. The Federal Reserve’s most recent data reveals that the average American has $65,000 in retirement savings. By their retirement age, the average is estimated to be $255,200.”

    And that may not be enough to cover multiple years of retirement either, according to other studies. A 2023 study from Northwestern Mutual said the “magic number” most Americans have in mind for retirement comfort is $1.27 million. Yet many people – 1 in 5, according to a 2023 Axios-Ipsos poll – don’t think they’ll ever be able to retire. Or at least, not for long. 
    A January 2024 piece on CBS News looked at how long $1 million in retirement savings lasts in different areas of the country. Spoiler alert, $1 million will go a lot further in Mississippi (23 years) than it will in Hawaii (about 10 years).

    The bottom line is aging gracefully and greatly is expensive, and it seems all adults can do a better job realistically preparing for what’s ahead. How do we start getting comfortable with the conversation and improving the outcomes? It begins with an honest talk about future costs and a relationship with a certified financial planner or investment authority.

    Start by doing your research on expenses associated with the second half.
    AARP recently shared a handy 10-point list outlining these costs (March 2023, by AARP’s Bruce Horovitz) and it includes mostly the expected line items, but also some juicy expense nuggets many people may not have considered:

    • Healthcare
    • Home maintenance
    • Travel
    • Transportation
    • Utilities
    • Fitness and Wellness
    • Kids and grandkids
    • Taxes
    • Charitable giving
    • Professional help

    Fidelity Investment says adults should expect to spend 55 to 80 percent of their current income annually during retirement. The company also suggests asking yourself and your spouse these questions so you are well informed about and best prepared for the costs on the second half horizon:

    • Should you pay off your mortgage before you retire?
    • Are you funding your grandchildren’s college expenses?
    • How much expensive travel do you have planned?
    • Do you plan to relocate in retirement?
    • What impact might health issues or taxes have on your retirement planning?
    • Do you have a housing strategy that details locales, living options, and amenities for the next stages of your life?

    Once you’ve done your cost research, the next step is to find a financial professional who can best guide you. Start by talking to your friends and family about who they use for their financial planning direction. Often, your bank and any investment team you use will have certified financial planners on board to direct you. Use them. They’ll ask you for input and personal goals and prepare you with a workable plan.

    The Washington, D.C.-based Certified Financial Professional Board Center for Financial Planning, which sets and regulates industry standards, features a few handy and helpful search tool resources. If you’ve found a financial planner you like or you’ve been referred to someone by a friend, you can
    verify their certification credentials through this form. Or if you’re starting from scratch, the group’s “Find a CFP Professional” search engine can help you narrow down your options.

    Whether it’s a CFP or an investment strategist with your bank, make sure you work with someone who can input the right data into your forecast – and advise you on a plan to make it a reality. You want to be very certain the professional you choose has your best interest in mind and the right information to achieve your financial goals for retirement.

    One of the best collaborative projects my husband and I ever worked on was generating a long-term strategy with our financial advisors. They asked us for all sorts of inputs, including how much we wanted to spend on weddings, travel, and leisure, and how much we intended to put aside for any inheritance for our children, and under what terms. With our work IRAs and savings and investments included, we ended up with a very clear picture of how much it was going to cost us to retire and when was the best time to begin. Included in that discussion was whether or not it made sense to purchase long-term care insurance or if we’d be better served to self-pay for our caregiving needs down the road. It was a tremendous relief to put all these scary numbers in an alterable spreadsheet that we could use as a financial roadmap for the future. I highly recommend this process. No matter the cost, it’s worth it!

    We plan to have conversations with our adult children moving forward to allay any fears they may harbor about our financial well-being. We want to make sure they understand our money management strategies so they can one day help navigate it if we cannot! Like all the other steps in a workable Grand Plan, communication is key. Communication is everything.

    On the flip side, my 80-year-old father was not open to these kinds of discussions before his unexpected passing in 2021. As a result, my husband and I had concerns we might need to put his caregiving expenses in one of our retirement spreadsheet columns! This was such unnecessary stress in the end, but a real worry nonetheless.

    It’s crucial to continue conversations about this and to stay informed about your financial matters. The healthiest family and friend relationships disclose the whole truth and nothing but the truth. Tell your people everything they need to know, especially about financial situations that will involve them one day. There’s no need for secrecy or holding back because the more people know, the more they can help.

    Financial planning for the senior years requires careful thought and planning, attention to detail, and a proactive approach. By addressing our financial planning now – while we’re happily adulting and getting by just fine – we can better navigate retirement with confidence and security.

    Susanna Barton, a member of Jacksonville Mayor Donna Degan’s subcommittee on elder care, has worked as a professional writer in Jacksonville for nearly 30 years and is the founder of the Grand Plans online community, podcast, newsletter, and blog.  Her book Grand Plans: How to Mitigate Geri-Drama in 20 Easy Steps and its accompanying workbook, the Grand Planner, are available in local stores and on Amazon. For more information, visit