“Penultimate” Retirement Planning – Structuring Expenses and Funds
Penultimate
adjective
last but one in a series of things; second last.
"The penultimate chapter of the book"
As a former Track & Field jumper (high, long and triple jump), the “penultimate step” has taken on a broader meaning in my life. In jumping, the penultimate step is crucial for setting up a successful jump. When that step is off, your performance suffers. In my life, I value preparation and have seen that there is special enjoyment in the ‘time before’ a thing. I have come to love an ‘Eve’, like Christmas Eve because it is all anticipation. Everything good is yet before you. I find I even use it in my philosophy of financial planning.
We consider the year before retirement the penultimate step. It is a year of excitement, dreaming and anticipation of enjoying the fruits of one’s labor. Having focused on simplification and consolidation throughout the retirement planning process, this last year we focus on two things:
· clarifying the retirement budget (early, mid and late years of retirement),
· employing strategies to structure assets to cover specific types of expenses: “Required” vs. “Desired”.
o Required – essential expenses for living, ideally covered with guaranteed income (Social Security, pensions).
o Desired – discretionary expenses for enjoyment of life, covered by excess retirement funds and non-retirement funds.
With a solid plan in place, we get to see our clients enter retirement prepared and at ease. It is especially sweet when that penultimate year has been successful. Seeing our clients reach their goals gives us satisfaction and renews our purpose to help everyday folk. This is why we do what we do – to see people enjoy all the good that is before them.
