We are increasingly dealing with a host of issues emanating from newer clients having too many goals for their resources. In essence, they don't have enough money to support their existing/desired retirement lifestyle. There is a huge "expectations gap".

Perhaps it is "muddled math" or long held unrealistic expectations but it appears the "more goals than resources" problem is here to stay. Part of the issue revolves around a lack of appreciation for the length of time that accumulated resources may need to last given increasing life expectancies. Take a look at our withdrawal rate chart to get a better idea of how lack of consideration can lead to outliving your resources.

I am constantly amazed at how otherwise intelligent folks really think that: 1. they can dramatically change/reduce their pre-retirement expenses upon crossing the magical threshold of retirement and 2. Their investment assets will allow them to live the lifestyle they imagine even though simple math would yield a wholly different conclusion.  Our own empirical data based on clients already retired suggests most people spend roughly the same in retirement as they did prior to retirement at least until age 80 or so. That's right, not 60% or 70% of pre-retirement spending but close to 100%. Tell us how much you are saving today and we can paint you a fairly concise picture of what your future will be.

We have not seen much of this over the years but the tides appear to be changing. What to do? First, these problems can't be solved without both time and additional savings. Oftentimes we see new clients around age 60 or so, somewhat late in the game to make substantive changes. Ideally, this will change to age 50 or earlier so enough time remains to align expectations with resources.

Our time tested approach encapsulated in our trademarked process Wealth Rx® is designed to change the way clients think about investing and the role of money in their lives. We welcome your referrals.