What are Timelines?
For over 30 years we have helped thousands of people determine what their “retirement number” is. So, what is “your retirement number”? Your retirement number is the amount of money you will need to accumulate (or should have accumulated if you’re already retired) in order to maintain your desired standard of living for the rest of your life. How do we determine what your number is? The answer is; we use timelines.
Remember, the goal of the retirement planning we do is to help assure that you will not outlive your money. Timelines are invaluable tools that we use; and they serve two purposes:
- to determine how much money you should be setting aside for your retirement
- to help us predict how long your retirement money will last.
This information can help you to realistically reconsider your retirement goals if they are unrealistic; and then we can assist you in making the necessary adjustments to those goals.
This step in the planning process is similar to when your doctors ask you questions about your health and your symptoms. Once you tell them what they need to know, they can order the appropriate lab tests to help them determine your condition and the course of your treatment. Timelines are the equivalent of lab tests, and we use them to determine your financial health and the course of action as it pertains to your retirement.
To build your timeline we start by asking you eight basic questions:
- At what age do you plan on retiring?
- How much monthly income will you need?
- What inflation rate should be used?
- How much have you already accumulated for retirement?
- What long term “expected rate of return” should we use?
- What are your expected sources of retirement income?
- How much are you currently contributing into your 401(k) or IRA?
Many people can be intimidated by these questions; but do not fear. We have helped many people, and we will help guide you through the process to answer these vital questions. When we get the answers to your eight questions, our team of professionals can go about the task of establishing your timeline, and ultimately give you “your number”. Once we know your number and your desired retirement objective, then we are ready to go to the next step of the planning process, the “Asset Cycle Portfolio System ®”