By Allen Giese, ChFC®, CLU®, ChSNC®

In this video I’m going to show you the three biggest concerns we see from FRS Special Risk participants as they approach retirement—the three issues that they are telling us they are most concerned about. And we’ll give you real solutions so you can position yourself better. So let’s get started!

Easily, the number one concern we hear is, “Is it going to be enough? Will I be able to live like I live now, or am I going to have to cut back? Am I going to run out of money? Will I have enough to do the things in retirement I always dreamed I would be able to do?”

We hear these questions, and many more like them, all the time.

So a lot of what we do is provide second opinions. That’s why we see quite a few folks come to us and say something like, “This is how much I have, and this is how much I think I can spend. Does it seem right to you?” And in a lot of those cases, we realize that they didn’t really account for two very important, and very real, things: inflation and taxes.

Not accounting for inflation and the mere fact that virtually everything you purchase next year is going to cost you more than it did this year is a critical error that can easily make the difference in whether or not you are successful.

And the same with taxes. Not understanding how your future distributions and Social Security are going to be taxed in retirement and accounting for that in your planning is clearly a big mistake. And it’s one we see all too often.

For a lot of FRS Special Risk people approaching retirement, they just want to know what they can spend or if they’ll be able to spend what they are spending now. They often want to know if they should be paying things off like mortgages and home equity loans.

The answers to all these questions are as unique as each person who is asking them. There is no one answer for everybody because we’re all different and have different objectives and goals. A good financial planner will spend a lot of time up-front learning what is unique and special about you and your situation before making any kind of recommendations. Be wary of the blanket answers out there—what’s good for one person may not be the best answer for you.

The next biggest concern we hear from pre-retired FRS Special Risk folks is, “What if something happens to me? Will my finances cover it? Will I be OK? Will my family be OK?”

These are important issues because they are real. Things like having an extended illness where you need to pay for in-home care or facility care for an extended period of time, or dying prematurely—those things actually happen. Have you accounted for that very real possibility in your long-range plan?

Even though it’s not something any of us like to think about, we’ve found that when we face the issue and actually model into our planning just these sort of “What if” scenarios, what we find happens is we all become so much more comfortable knowing our financial plan is strong enough to handle even bad situations that might come along. It’s confirming, and what we see happen is people just feel better knowing everything, financially, is going to be OK.

So hard as it is to face it, once we do, it’s always a good idea, and then we can move on to consider more positive things.

All right, the next biggest concern we hear and see from pre-retired FRS folks is along the lines of mechanics. How does it all work together? They want to know where they are drawing income from and how to do it—especially for those folks in the investment plan. They want to know how their 457 deferred comp plan plays into all of this and what unique advantages that plan gives them in retirement.

They also want to know how other assets they might have will work with their FRS benefits and if there is some sort of order they should be following as far as which accounts to spend down first.

The list goes on and on, but it really is all about how it all fits together and works together.

So you can guess, and as I mentioned earlier, that one answer for one person may not be the best answer for another, because there are so many variables involved as well as differences in goals different people have.

We’ve learned that having a time-tested, well-thought-out process that addresses these questions regularly—because our lives are constantly changing as we move to and through retirement—is critical and something that we believe is a big separator between great advisors and advisors that may be more interested in selling you something than you having the most successful retirement you can.

Schedule a complimentary consultation with a fee-only financial planner to discuss your personal situation in more detail.