One of the most difficult obstacles retirees face is how to transition from a lifetime of saving to spending. This problem is not unique to a specific cohort of individuals. A business owner who poured years of their life into building something lasting in their community. Two spouses who raised a family and saved what they could until they got retirement age. A widow in their 60’s who lost something more meaningful than assets. All of these people and many like them struggle with the best way to turn from saving to spending.
A great wealth management partner can ease this difficult transition. There are a multitude of decisions that can be made prior to retirement. Having these discussions early, with a team that you can build trust with, provides peace of mind. The most important factor to consider is not an investment product or a portfolio return, it is choosing a wealth management team that draws on prior experience working with clients who have gone through what you will be experiencing. Experience is not enough; you can input your questions into an AI model and get a similar answer. What matters is the ability for that wealth management team to use that knowledge and adapt to future changes. These might be changes to social security, an economic catastrophe, or more importantly, changes in your specific needs.
Having an adjustable plan in place is an effective way to handle the challenge of turning from a builder/saver to a spender. AI can provide plenty of withdrawal rules for retirement: the 4% rule, live off only the dividends and interest, save 25x your estimated first year retirement spending, and so on. These solutions leave out several important factors: what types of accounts are your assets located in, when should you take social security, what if you also want to continue supporting the charities that are important to you, what should you do when the market is experiencing heightened volatility. The future scenarios that are likely to impact your spending plan will have a unique impact on your personal needs. Going from building/saving to spending is already hard enough for many people. Navigating these choices requires a team that is committed to understanding future changes in order to implement strategies for your benefit.
Your retirement is personal. Your needs are unique. Working with a team of wealth management experts will provide clear and precise options to navigate your pre and in-retirement needs. The investment options and planning software used by most financial firms is nearly identical. Be wary of the advisor that leads with investment performance, implying that they can increase your returns (often before even discussing your goals). What sets a team apart is being able to provide thoughtful advice that you are unable to get anywhere else. Delivering that unique perspective is what the Cedar Rapids Bank & Trust wealth management team focuses on every day for you. In a world that is becoming increasingly automated, we prefer sitting down with you and offering a local fiduciary team that understands you.
Andrew Messerschmidt, CFA, is an Investment Officer at Cedar Rapids Bank & Trust. His direct line is (319) 743-7136.
Investment products are: Not a deposit | Not FDIC insured | Not insured by any federal government agency | Not guaranteed by the bank | May go down in value
