Should Your Retirement Be Custom-Built?

Unbelievably, this year marks 25 years that I have been helping people plan for their retirement – most of that as a retirement financial advisor here in Columbia, SC. Over those years, I’ve talked about retirement planning with literally thousands of people; and I cannot remember a single time in which the person I spoke to thought that they were just like everyone else or that they would be satisfied with a cookie-cutter approach to their retirement.
 
And yet, that is exactly what the financial media and many brokers or advisors try to give people. Let’s start with the media. It is frustrating to us that financial information often comes with absolute statements. The following are examples I’ve seen – often many times before:

Examples of cookie-cutter financial media recommendations:

Everyone should delay their Social Security until age 70.
Everyone should defer as much of their taxes as possible while working through a 401k or IRA.
All annuities should be avoided because they have high fees and tie up your money too long.
Everyone’s 401k should be invested in a target-date retirement fund.
No one should ever own permanent life insurance.
 
The sad thing is that there is a kernel of truth in all of these statements. Certainly, some people should delay their Social Security until age 70. It’s possible that even MOST people should delay their Social Security until age 70. But certainly not EVERY person. This is because we’re all different and have different goals and circumstances.
 
What makes us even more frustrated is when brokers or advisors do the same thing. The most obvious example is how many financial firms simply ask each of their clients to fill out a risk tolerance questionnaire, and then they place their life savings into one of their portfolios. These are typically called:

Conservative
Moderately Conservative
Moderate
Moderately Aggressive
Aggressive

While there is nothing wrong with these terms in general, assuming that there are only five different types of investors seems quite absurd to me. In addition, most of the time, these portfolios are nothing more than shifting between bonds and stocks: the conservative option leans toward bonds, while the aggressive leans toward stocks. Assuming that all the money should be in one of these two options is a sadly outdated approach that dates back to over 100 years ago.
 
Because we see the problems with all of the items I’ve listed above, we call what we create a Custom-Built Retirement. As true retirement planning advisors, this requires us truly getting to know you as our client: who are you, what are you about, what are you trying to accomplish, and what are all of the resources you have to help you accomplish your goals. Then, we create your Custom-Built Retirement Plan. Think of this as a map to help you get from where you are now to a successful retirement.
 
Of course, since the future cannot be predicted, the initial retirement map won’t be perfect. So your Custom-Built Retirement Plan is not created to sit on a shelf and collect dust. Instead, your planner will be like your guide along the path, helping you navigate as conditions change. So not only is the initial retirement plan Custom-Built but so is the guidance along the way.
 
If this Custom-Built Retirement approach sounds more labor intensive, that is because it is; but we aren’t adding extra work with no purpose. Instead, we know through experience as retirement planning advisors here in Columbia, SC, that building and managing Custom-Built Retirement Plans provides our clients with the confidence to retire and the peace of mind to truly enjoy their retirement; and to us, that investment of time is priceless.