Finding your financial future
Planning for your retirement can be an ongoing process

By JILL BADZINSKI - For the Daily News

Feb. 23, 2018

Financial consultant with Thrivent Financial Andy Hughes speaks with one of his clients, Scott Lopas of Hartford, on Thursday afternoon at the Thrivent offices in West Bend.
John Ehlke/Daily News

Like most Americans, 31-year-old financial consultant Andy Hughes is looking forward to his retirement. But unlike many, he knows financial planning doesn’t stop once your working days are over.

“During the accumulation phase of retirement planning — when you are saving for your retirement — I suggest saving now and spending later,” he said.

Whether you are developing your own financial strategy, taking advice from family members, friends or national figureheads or working with a professional financial planner, set goals and figure out what you need to do to reach them, said Hughes, a financial consultant with Thrivent Financial. Develop a solid investment plan that will allow you to achieve your goals, maximize matches from your employer and attempt to minimize your tax layout after retirement.

“It can seem complicated, but there are professionals who can help make sure you are achieving the right balance,” Hughes said.

There is not a cookie-cutter approach to developing a financial strategy.

“The slipper that fit on Cinderella’s foot didn’t fit on her sisters’,” he said.

If you decide to work with a financial planner, Hughes offers some advice:

Find one who is transparent about fees, risks and potential outcomes.

Share your goals and financial challenges. “It’s just like when you go to your doctor and tell them your medical history so they can give you the best diagnosis and treatment,” he said.

Ask any question you have.

Make sure your plan is truly diversified. “Many people say they don’t want to put all of their eggs in one basket so they invest in a lot of different stocks and funds,” Hughes said. “Yet when we look at what they have, it’s a lot of the same kinds of investments. Basically people have a lot of baskets with the same eggs in them. That is not was diversification means.”

Once you do retire and enter the financial distribution phase, remember that your financial planning is not finished. There are generally three distinct stages of retirement savings.

“I tell people to plan for their go-go years, their slow-go years and their no-go years,” Hughes said.

The go-go years are the 10 to 15 years after retirement, when you will likely be most healthy and active. Plan to spend 5 to 15 percent of your savings on activities like travel, golf and spending time with your grandchildren.

But don’t expect it to be easy. Spending money accumulated over a lifetime and watching it ebb and flow during market undulations can be emotional.

“Don’t hit the panic button,” Hughes said. “Talk to your advisor. We will help you ride it out so you enjoy those go-go years as much as possible.”

The ensuing slow-go years are characterized by fewer activities combined with a desire to stay connected, said Jack Teboda, president of Teboda and Associates, a Florida-based financial services firm. In those years, retirees may move closer to their children or into a retirement community to feel more socially connected.

“Sometimes at this point, especially if they haven’t planned well, people may start to have even more worries that they will outlive their money,” Teboda said. “One way they address that is to cut back on expenses. Some people even decide to get a part-time job to bring in extra money, and working becomes another way to stay connected.”

The third stage of retirement — the no-go years — are spent in long-term care facilities for up to 70 percent of Americans.

“When people map out their retirement,” Teboda said, “they need to plan for that possibility because the cost of long-term care can be devastating to your finances.”

Hughes suggests investing in long-term care insurance as early as possible to lock in affordable premiums and ensure coverage. Hughes and his wife, for example, already have policies in place.

“Many people plan to have something to pass on,” he said. “A solid financial plan can help make that a reality.”

Adjusting to the three stages

Stage 1: Adjusting to new lifestyle. It’s not easy to flip the switch overnight after you’ve spent several decades reporting to work every day. Also, if your retirement income is largely dependent on your savings you’ll want to be careful that you don’t spend too much in those initial years.

Stage 2: Staying socially connected. As the years pass, many retirees move closer to their children or move into a retirement community because it makes them feel more socially connected.

Stage 3: Realizing you may need assistance. More than 70 percent of Americans older than 65 will need some form of long-term care at some point in their lives, according to the U.S. Department of Health and Human Services.

— Jack Teboda, president of Teboda & Associates, a financial services firm