• June 2012

5 Ways to Save for a Happy Retirement

We recently began working with financial planner Bryan Beatty, a partner at the Northern Virginia firm, Egan, Berger & Weiner, LLC.

To tap his decades of experience helping professionals plan for retirement, we talked with Beatty about the five most important things we all need to do to save for the future.

Here is Beatty’s advice.


5 Tips for Retirement Success

1. Understand the risks of longevity and aging.

Part of any retirement plan should be to live a healthy and enjoyable life. However, living a long life presents a challenge you may not be fully aware of—longevity risk.

The fear of outliving ones assets is one of the highest fears expressed by today’s Baby Boomers. Today the average 64-year-old couple retiring has about than 20 percent chance of one of them living to be older than 95, according to the Single Life Expectancies Based on Annuity 2000 Mortality Table.

If we are going to live that long, we need to plan for our own long-term care, sometimes referred to eldercare. This is in addition to maintaining a nest egg for as long as 30 years while providing adequate income that increases with inflation.

2. Have clearly defined goals.

Start by asking yourself some practical questions.

  • When do you want to retire? At 62, 65, 73? There is no correct age; this is a very personal decision.
  • What would you like to be doing? Sailing, golfing, traveling internationally, learning to skydive? Think about your favorite hobby, and set your sights on it. If you don’t have any hobbies that capture your imagination, then get some—because you will be retired for a longer time than you think. The good news is that in retirement, you get to spend your days enjoying the things you love the most.
  • And here’s the really big question: Where will you live in retirement? At the beach, in Atlanta, San Francisco, or maybe Costa Rica? Since each state, and country, has different tax rules, it is important to think about where you want to live. If such a big decision depends on where your family is, you aren’t alone. For many people family is a very big part of the healthy later life they envision. What shouldn’t be the answer or conclusion is, “wherever I can afford.” That choice means you didn’t have a clear goal for which to develop a plan to achieve.

3. Develop a plan (with some flexibility).

Check back to your response to Tip #2. Until you know what you are trying to accomplish, you can’t design a plan to get there. Your plan must include the risks you face in getting to your goals. What stands in your way?

You simply need to figure out how to mitigate the potential impact on your plan of all your obstacles you face. This step requires calculating the present value of your goals and determining what the future cost of your goals might be. Once you know the costs and obstacles, map out a strategy to get you safely to your goal.

Planning for retirement is the equivalent of deciding to go on a trip to a place that’s far away and unfamiliar. You need to figure out how much gas and food you’ll need, and which transportation methods you will use. Then you have to chart a route or series of paths you must take to get to your destination without getting stuck at an impassable bridge or diving into a ravine or missing your target entirely and getting lost in a desert. You get the picture.

4. Have an Asset Allocation Strategy.

If you think I am speaking a foreign language here, let me explain. An Asset Allocation Strategy helps you balance risk vs. reward.

The important thing is to know what you want to do with the money you have saved. So ask yourself some more important questions:

  • How much risk are you taking now, and is it appropriate given your age and your goals and even your investment experience?
  • Do you need to take more risk, or could you get away with less risk? Risk means potential for return, but in the shorter run it means potential for loss.

TThe key is not just to have a plan, but to truly understand your long-term strategy for accomplishing your goals. That’s how you will best determine why you have the investments you have, and whether or not they are right for you.

5. Differentiate between your needs and your wants. Sometimes people set goals and design a plan—and then when they see what it will take to reach their goals they are overwhelmed.

Don’t quit because it seems impossible. Go back and break apart the goals into categories: needs versus wants. You must achieve your needs, and the basics of your plan should contain the steps you’ll have to take to meet your needs. Then build in a plan of alternate action to achieve your “wants.”

It is what I refer to the, “wouldn’t it be nice if” planning strategy.

And this is what I’ll be talking about in the coming months as my partners at Egan, Berger & Weiner, LLC share our tips for Retirement Rules: The Things You Need to Know to Live Out Your Golden Years in Style.

Stay tuned for our first installment in the July 2012 issue of Be Inkandescent magazine. Here’s to retiring well!


About Bryan D. Beatty

Bryan Beatty is a Certified Financial Planner® and partner at Egan, Berger & Weiner LLC, which is based in Northern Virginia. With more than 20 years of experience in the financial industry, he is a principal of this independent financial services firm, which is experienced in all aspects of investment and retirement planning.

An active member of the Financial Planning Association’s Career Development and College Outreach Committees, Beatty is a graduate of the University of Maryland with a BS in Finance. He was the former president of the Finance, Banking and Investment Society, and he is an avid musician who plays guitar and writes music in his spare time, and occasionally plays area venues. Originally from Baltimore, Beatty has lived in Northern Virginia since 1992.

For more information about Beatty’s services, send him an email at bbeatty@ebwllc.com.

For additional information about Egan, Berger & Weiner, LLC, visit www.ebwllc.com.

Securities and Investment Advisory Services offered through Voya Financial Advisors, member SIPC. Egan, Berger & Weiner, LLC is not a subsidiary of nor controlled by Voya Financial Advisors.