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Planning Ahead for Life Insurance Proceeds

August 9, 2017
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Why did you purchase life insurance? If you’re like most people who buy life insurance, you’re looking to provide a source of income for someone (e.g., a spouse, parent, or child) after you die. Buying the policy was the first step. Now you’ll need to do a little more work to ensure that the money you leave behind lasts.

You can never leave too…Or can you?
First, make sure what you’ll leave behind is enough. Review your insurance needs annually, or more often if necessary. After a major life event (e.g., birth, death, marriage, divorce, job loss), it is also a good idea to review your coverage. If you think that you may need more life insurance or that you have too much, talk to your insurance professional, who can advise you on the right amount of insurance for your situation–remember that you’re planning for your family’s future.

Also, if you’ve chosen a cash value life insurance policy that allows you to make investment decisions, you may want some advice from a financial professional. These experts can show you how to allocate your cash value account so that it fits in with your overall financial plan.

Can we talk?
If you’ve bought life insurance to ensure a bright future for your children, sit them down and talk about it. It’s always a good idea to talk to your children about the value of money, but serious talks about life insurance proceeds and the family estate should wait until they’re older. Eighteen is probably a good age, or slightly younger if you think your youngsters are mature enough to handle it. Although you don’t want to dwell on the fact that Mom and Dad won’t always be around, you do want to make them understand:

  • How much money they’ll receive at your death, or at least that there will be sufficient funds for them to carry on, go to college, and so on.
  • Who will be in charge of the money.
  • When it will be accessible and for what purposes.
  • What restrictions will be set in place.
  • Why all this planning is necessary.

Do you have specific desires as to how you want the money to be spent (e.g., college education)? Explain your reasons. You may find that your children want to respect your wishes instead of trying to find ways around them. If you have young children, you’ll need to appoint a guardian(s) in your will to care for them and manage their assets (including insurance proceeds), in case something should happen to you and/or your spouse. Small children won’t understand all of the financial lingo, and you don’t want to frighten them with talk of death. So, talk to the person(s) you have chosen as guardian(s) about your plans and wishes.

Did you name your spouse, a parent, or someone else as a beneficiary? Talk to them now–don’t wait until a crisis arises. Among other things, you’ll want to discuss how the insurance proceeds might be invested and what they should be used for (e.g., home mortgage, children’s education, your final expenses). You should also talk about any financial plans you’ve already made (or plan to make) and tell them what life insurance policies you have and where all the important paperwork is located. That way, your beneficiaries will be prepared when the time comes.

Revocable and irrevocable trusts
If you’re concerned about your beneficiaries’ spending habits, or that they might need help managing their inheritance, a trust may be the appropriate tool for you. If the right type of trust is used, this can be an excellent way to plan for your beneficiary’s financial future. Two basic types of trusts are used in conjunction with life insurance: revocable trusts and irrevocable life insurance trusts (ILITs). Revocable trusts come in many varieties and can be used for many purposes. Revocable trusts allow you to retain control over the trust and its assets, and even to terminate the trust if you so choose. You would generally name yourself as the trustee of a revocable trust while you’re alive and appoint someone else as a successor trustee to carry out your wishes after you die. The trustee is legally obligated to pay out the proceeds of the insurance policy, and any other assets in the trust, as specified in the trust agreement. The benefit to you is knowing that your wishes will be carried out. Your beneficiaries won’t be able to get around the trust agreement. The downside for you is that your estate will have to include assets in a revocable trust when calculating estate taxes.  With an ILIT, however, you’ll enjoy certain tax benefits–the insurance proceeds and other assets in the trust aren’t typically considered part of your taxable estate.  However, you must give up all rights and control over the trust–you can’t act as the trustee or make any decisions about how assets are invested. If it appears that you have influence over the trustee, or that the trustee is carrying out your wishes, the ILIT will be added back into your estate tax calculation. If you have a sizable estate, you may be able to minimize the potential tax burden with an ILIT.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage.

For more information, please visit www.hfgwm.com or call 832.585.0110.

Long-Term Care Insurance:  How does it work and is it right for your family?


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Whether you’ve had a long-term care insurance (LTCI) policy for years or you’re thinking of buying one, it’s critical to understand exactly what set of conditions will trigger coverage. Your chances of requiring some sort of long-term care increase as you age, and long-term care insurance (LTCI) can help you cover your long-term care expenses. Although tax issues are probably not foremost in your mind when you buy LTCI, it still pays to consider them. In particular, you should explore whether your premiums will be deductible and your benefits taxable.

But who should buy the coverage and when? Many experts use net worth as a purchasing guideline. On one end of the spectrum, individuals with lower net worth will quickly exhaust their assets when funding long term care and qualify for Medicaid. At the other extreme, you may be able to pay for any potential long term care costs yourself. Keep in mind “self-insuring” requires investing a portion of your assets in a conservative fashion to cover possible long term care expenses.

If you fall in between these two categories, it’s worth weighing the trade-offs between the peace of mind a long term care policy might bring you and the premiums you will pay. Most experts suggest beginning this analysis around age 50. If you wait until your 70’s, it may be too late to purchase insurance as some long term care insurance companies place restrictions on the age and health status of buyers.

What determines if you’re entitled to benefits?
LTCI policies differ on how benefits are triggered, so it’s important to examine your individual policy. Here are some ways you can become eligible for benefits:

  • You’re unable to perform a certain number of activities of daily living (ADLs) without assistance, such as eating, bathing, dressing, continence, toileting (moving on and off the toilet) and transferring (moving in and out of bed). Look in your policy to see what ADLs are included, the number you must be unable to perform, and how your policy defines “unable to perform” for each ADL, as criteria can vary from one company to another (e.g., does the definition require someone to physically assist with the activity or simply to supervise the activity?).
  • Your doctor has ordered specific care.
  • Your mental or cognitive function is impaired.

The best policies let you qualify for benefits if your own physician orders specific care, rather than require that you be examined by an insurance company physician. Most LTCI policies have a waiting period, commonly known as an elimination period, before you can start receiving benefits after you’re judged medically eligible. Common waiting periods are 20, 30, 60, 90 or 100 days.

Though it’s true that premiums paid on a tax-qualified LTCI policy can reduce your tax burden, you must itemize deductions to be eligible.  LTCI premiums fall under the write-off for medical and dental expenses, which is limited to expenses that exceed 10 percent of your adjusted gross income. And there’s another caveat. Even if your LTCI premiums exceed 10 percent of your adjusted gross income, you can’t include all of the premiums in your deduction for medical and dental expenses

Long term care can be an emotional issue, but it’s best to evaluate the product as a risk management tool, like your homeowners, life, and auto insurance. Finally, because policy language can be ambiguous and insurance companies seem to introduce new riders on a daily basis, it’s beneficial to consult with us before purchasing long term care insurance.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage.

For more information, please visit www.hfgwm.com or call 832.585.0110.

Teaching Your Heirs to Value Your Wealth

July 26, 2017
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Values can help determine goals & a clear purpose.

Some families are reluctant to talk to their kids about family wealth. Perhaps they are afraid what their heirs may do with it.  It can be awkward to talk about such matters, but these parents likely postponed discussing this topic for another reason: they wanted their kids to grow up with a strong work ethic instead of a “wealth ethic.”

If a child comes from money and grows up knowing he or she can expect a sizable inheritance, that child may look at family wealth like water from a free-flowing spigot with no drought in sight. It may be relied upon if nothing works out; it may be tapped to further whims born of boredom. The perception that family wealth is a fallback rather than a responsibility can contribute to the erosion of family assets. Factor in a parental reluctance to say “no” often enough, throw in an addiction or a penchant for racking up debt, and the stage is set for wealth to dissipate.

How might a family plan to prevent this? It starts with values. From those values, goals, and purpose may be defined.

Create a family mission statement. To truly share in the commitment to sustaining family wealth, you and your heirs can create a family mission statement, preferably with the input or guidance of a financial services professional or estate planning attorney. Introducing the idea of a mission statement to the next generation may seem pretentious, but it is actually a good way to encourage heirs to think about the value of the wealth their family has amassed, and their role in its destiny.

This mission statement can be as brief or as extensive as you wish. It should articulate certain shared viewpoints. What values matter most to your family? What is the purpose of your family’s wealth? How do you and your heirs envision the next decade or the next generation of the family business? What would you and your heirs like to accomplish, either together or individually? How do you want to be remembered? These questions (and others) may seem philosophical rather than financial, but they can actually drive the decisions made to sustain and enhance family wealth.

Feel no shame in exerting some control. A significant percentage of families seek to define a purpose for transferred wealth. Some parents may want to specify what their heirs could use their inheritances for.

You may want to distribute inherited wealth in phases. A trust provides a great mechanism to do so; a certain percentage of trust principal can be conveyed at age X and then the rest of it Y years later, as carefully stated in the trust language.  By involving your kids in the discussion of where the family wealth will go when you are gone, you encourage their intellectual and emotional investment in its future. Pair values, defined goals, and clear purpose with financial literacy and input from a financial or legal professional, and you will take a confident step toward making family wealth last longer.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage. For more information, please visit www.hfgwm.com or call 832.585.0110.

Are Your Children Financially Literate?


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New Approaches to a Changing Problem.

How bad is financial illiteracy today? So bad that your children may be at risk of making some serious financial mistakes. Some are finding that talking to children about finances has become less about the nuts and bolts of money and more about putting money’s importance to our daily lives in the correct context.

Women at particular risk.  It should be noted that more women work in part-time jobs, and are more likely to interrupt their careers to take care of family, whether that be raising children or looking after parents. Some of these patterns are just luck of the draw, but others may come from what parents teach children about money, and how they teach it.

Start at a young age. New York Times money columnist Ron Lieber’s book, The Opposite of Spoiled, discusses ways to prepare children for dealing with financial issues. The title refers to the author’s search for an antonym to the word “spoiled” in the context of an entitled and demanding personality. Lieber suggests focusing on values like graciousness in communication, which can lead to more openness in discussing money. Money can be frightening or mysterious to many, even well into adulthood, and Lieber encourages approaching the topic with fewer facts and figures and more as an emotional issue. The reasoning for this is that money is, for children and adults, an emotional topic.

The emotional toll of money issues. While most people have experienced money worries at one time or another, the science surrounding this phenomenon is compelling. Many mental health organizations have special literature dealing with the emotions that surround money troubles, while money is always an uncertain and fluid factor in our lives, how we deal with these stresses may be strengthened through early experiences and developing good emotional habits early on. Frank talk about these emotions may demystify money and, in the process, boost financial literacy.

Education is still needed. Of course, money is far more than an emotional issue; being comfortable with a topic doesn’t guarantee proficiency, it merely makes it easier to learn.

Prescriptions in progress. There are a number of online sources for financial education, helpful to both teens and young adults. The Ad Council and the American Institute of Certified Public Accountants have a national campaign, Feed the Pig™, to try and correct this dilemma (learn more by visiting www.feedthepig.org). The National Council on Economic Education has also helped launch www.TheMint.org to acquaint young adults with vital financial principles.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage. For more information, please visit www.hfgwm.com or call 832.585.0110.

Gap year: What parents need to know


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High school graduation is nearly here, which means families with students entering their senior year need to start thinking about what their student will do after graduation.  One often overlooked option is having the student attend a gap year program before entering college.

HFG Wealth Management Director of Client Services and Financial Planning, Donnie Carpenter, answers the top three questions about gap year programs.

What is a gap year program?
Gap year programs have been growing in popularity for some time, but the concept has almost always been around. The idea is that most students have no idea what career they want to enter on the other side of school, and thus what they should study. Instead of going from high school straight into college, they can get some experience that will help them understand more about themselves and what careers may be a good fit.

Some students do this by getting a job and staying at home, building up their savings and learning if a retail or service job is where they want to land. Other students attend a local community college to explore different fields at a fraction of the cost of a four-year college, but most community colleges have far fewer fields of study than traditional universities. Still other students may want to join the army, Greenpeace, a mission agency, or take some other opportunity to travel and gain life experience.

A relatively new option is to attend a gap year program. There are generally three types: traveling, volunteering, and working.

Why should we consider a gap year program?
Many 18-year-olds are not ready to decide what they want to do with the rest of their life. A gap year program gives them time and space to consider their options, as well as obtain experiences that may help shape their future career.

For example, a client’s son was interested in doing something involving the ocean, so his parents sent him on a gap year program that had him spending a semester at sea. He is now an oceanographer, having found a career he is passionate about, while his wife, whom he met on the ship, became a school teacher after learning she wasn’t as interested in the sea as she thought.

Is there a cost to gap year programs, and if so, how do we pay for it?
Gap year programs are businesses that sell education and experiences, so there is a cost involved. It can run from a few thousand dollars to tens of thousands of dollars. One program involves traveling to multiple countries over 9 months and costs $55,000, while another has the student live 20 days at sea for 3 credit hours and costs $6,000. Depending on the type of program, you may be able to use financial aid, or even your 529 account to pay for the gap year. To be eligible for financial aid or to get tax-free withdrawals from your 529, a program must be affiliated with a university.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage.

For more information, please visit www.hfgwm.com or call 832.585.0110.

Beware of Emotions Affecting Your Money Decisions

July 12, 2017
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Today’s impulsive moves could breed tomorrow’s regrets.

When emotions and money intersect, the effects can be financially injurious. Emotions can cause us to overreact – or not act at all when we should.

Think of the investors who always respond to sudden Wall Street volatility.
That emotional response may not be warranted, and they may come to regret it.  In a typical market year, Wall Street can see big waves of volatility. This year, it has been easy to forget that truth. During the first third of 2017, we saw only a minor swing.  Daily retreats of this magnitude have been seen before, will be seen again, and should be taken in stride.

Fear and anxiety can also cause stubbornness.
Some people have looked at money one way all their lives. Others have always seen investing from one perspective. Then, something happens that does not mesh with their outlook or perspective. In the face of such an event, they refuse to change or admit that their opinion may be wrong. To lose faith in their entrenched point of view would make them feel uneasy or lost. So, they doggedly cling to that point of view and do things the same way as they always have, even though it no longer makes any sense for their financial present or future. In this case, emotion is simply overriding logic.

What about those who treat revolving debt nonchalantly?
Some people treat a credit card purchase like a cash purchase – or worse yet, they adopt a psychology in which buying something with a credit card feels like they are “getting it for free.” A kind of euphoria can set in: they have that dining room set or that ATV in their possession now; they can deal with paying it off tomorrow. This blissful ignorance (or dismissal) of the real cost of borrowing can dig a household deeper and deeper into debt, to the point where drawing down savings may be the only way to wipe it out.

How about those who put off important financial decisions?
Postponing a retirement or estate planning decision does not always reflect caution or contemplation. Sometimes, it reflects a lack of knowledge or confidence. Worry and fear are the emotions clouding the picture. What clears things up? What makes these decisions easier? Communication with professionals. When the investor or saver recognizes a lack of understanding, shares his or her need to know with a financial professional, and asks for assistance, certainty can replace ambiguity.

Emotions can keep people from doing the right things with their money – or lead them to keep doing the wrong things. As you save, invest, and plan for your future, try to let logic rule. Years from now, you may be thankful you did.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage.

For more information, please visit www.hfgwm.com or call 832.585.0110.

Gauging Your Financial Well-Being


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Six signs that you are in good shape.

How well off do you think you are financially? If your career or life takes an unexpected turn, would your finances hold up? What do you think will become of the money you’ve made and saved when you are gone?

These are major questions, and most people can’t answer them as quickly as they would like. It might help to think about six factors in your financial life. Here is a six-point test you can take to gauge your financial well-being.

Are you saving about 15% of your salary for retirement? That’s a nice target and will probably amount to $10-20,000 per year. You are probably already saving that much annually without any strain to your lifestyle. Annual IRA contributions and incremental salary deferrals into a workplace retirement plan will likely put you in that ballpark. As those dollars are being invested as well as saved, they have the potential to grow with tax deferral – and if your employer is making matching contributions to your retirement account along the way, you have another reason to smile.

Do you have an emergency fund? Sadly, most Americans don’t.  A strong emergency fund contains enough money to cover six months of expenses for the individual who maintains it. If you head up a family, the fund should ideally be larger – large enough to address a year of expenses. At first thought, building a cash reserve that big may seem daunting, or even impossible – but households have done it, especially households that have jettisoned or whittled down debt. If you have done it, give yourself a hand with the knowledge that you have prepared well for uncertainty.

Are you insured? Some households don’t have life insurance. Why? They can’t afford it. That’s the perception.

In reality, life insurance is much less expensive now than it was decades ago. How much do you need? A quick rule of thumb is ten times your income. Hopefully, you have decent or better insurance coverage in place.

Do you have a will or an estate plan? Dying intestate (without a will) can leave your heirs with financial headaches at an already depressing time. Having a will is basic, yet many Americans don’t create one.  Why don’t more of us have wills? A lack of will, apparently. A living will, a healthcare power of attorney and a double-check on the beneficiary designations on your investment accounts is also wise.  Not everyone needs an estate plan, but if you’re reading this article, chances are you might. If you have significant wealth, a complex financial life, or some long-range financial directives you would like your heirs to carry out or abide by, it is a good idea. Congratulate yourself if you have a will, as many people don’t; if you have taken further estate planning steps, bravo.

Is your credit score 700 or better? Today, 685 is considered an average FICO score. If you go below 650, life can get more expensive for you. Hopefully you pay your bills consistently and unfailingly and your score is in the 700s. You can request your FICO score while signing up for a trial period with a service such as TransUnion.

Are you worth much more than you owe? This is the #1 objective. You want your major debts gone, and you want enough money for a lifetime. You will probably always carry some debt, and you can’t rule out risks to your net worth tomorrow – but if you are getting further and further ahead financially and your bottom line shows it, you are making progress in your pursuit of financial independence.

Are You Underfunding Your Retirement?

June 14, 2017
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Many retirees and pre-retirees are drawn to fixed annuities and CD’s because they do not want to assume much risk. After all, there is no stock market risk involved with these fixed-return investments. Some people use them as their only vehicles for retirement planning.

But stepping out of the stock market altogether may not be such a good idea. In fact, for some it could be a serious retirement planning mistake. Here’s why.

Risk-averse investing has risks of its own. Every investment has advantages and disadvantages. Fixed-rate investments are no exception. While you eliminate market risk with a fixed annuity or CD, in a sense you are trading one kind of risk for another. You now contend with opportunity risk (or opportunity cost) and inflation risk. The fixed return you get might be far less than the return that stock market investing could bring you (in the short term and the long term). That fixed return might also fail to match the rate of inflation, leaving you with less purchasing power.  Volatility is something many of us endure in order to try for the kind of returns that may help us reach our financial goals. In the last year, the stock market has been quite volatile. But through the years, some investors have built considerable wealth through long-term stock market investment.

Do you really want to ignore the potential of the stock market? While short-term market movements may make stocks and funds seem too risky, the big risk could be the possibility of severely underfunding your retirement by clinging to fixed-rate investments. The stock market offers opportunities for considerable financial gain – and the chance of returns exceeding those of most fixed-rate investments. While there is risk involved, there also exists a potential for considerable benefit.

If you say “no” to the market’s potential, you may regret your choice later in your retirement. In fact, you may find that you need long-term stock market investment to work toward certain retirement goals.

Explore the possibilities. If you’d like to learn more about investments positioned to take advantage of the market’s potential, be sure to speak with a qualified financial advisor. He or she may be able to help you determine how much risk you’re willing to tolerate, and which investment opportunities are the closest fit with your tolerance level. What you learn might be very illuminating, and it might change your whole investment outlook.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage. For more information, please visit www.hfgwm.com or call 832.585.0110.

The Real Consequences of Not Saving for Retirement


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Do you really want to risk facing these potential outcomes?

Saving for retirement may seem an unappreciated task. But you may be thanking yourself later. Putting away a percentage of one’s income, money that could be used for any number of bills or luxuries, is a sacrifice made in the present in order to avoid a larger trouble down the road.

More than a quarter of seniors have no retirement savings. To be more specific, the Government Accountability Office says some households headed by people 55 or older have no savings in a retirement account and no possibility of receiving an employer pension.

What kind of future awaits boomers who have saved less than $50,000 for retirement? It is hard to say exactly what may happen to them financially, but it is possible to make some educated guesses.

  • They will likely try to work into their seventies. If their health permits, they will attempt to stay employed at least part time. Their earnings will presumably drop as they age.
  • They will probably rely heavily on Social Security & home equity. Social Security income by itself will prove insufficient to retire on, so they will look at selling their homes or arranging reverse mortgages to help fund their retirement (if they own homes to begin with).
  • A fortunate few may have a third option: augmenting their inadequate retirement savings with proceeds from a business sale. Some small business owners save relatively little, believing that the money they get from selling their company will fund their future. That is not a given. It may take years for their business to sell, and it may sell for far less than they assume.

Within a few years, they will need to accept a significantly lower quality of life. They may be forced to scale back creature comforts, live in smaller quarters, or relocate to a cheaper, less desirable area (assuming they can handle relocation costs). They may end up doing all of this.

At some point, they may start spending down their assets. If they do enough of that, they will be eligible for Medicaid – a grim consolation in a sad process. Debts may impel them to whittle away their net worth even faster. Then, they may need help from their children. Having little or no income besides Social Security, they will struggle mightily to keep up with the bills. If they own their homes free and clear, at least they will be able to stay in them; if not, they may choose the apartment of last resort and move in with one of their adult children.

Will this be your future? If you want to plan to avoid this financial nightmare, then you must save and invest for retirement. Save and invest as if your entire future depends on it, for it may. Saving and investing now could help you save your quality of life someday.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage. For more information, please visit www.hfgwm.com or call 832.585.0110.

What Is Retirement Really Like?


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When most people think of retirement, they imagine leaving a job they’re tired of, getting out of the rat race, and leaving the pressures of employment behind. Often retirement is viewed as a reward for time in the workforce and a benefit of successful financial planning. But retirement is so much more than giving up a job and relaxing. Retirees are entering one of the most exciting and challenging stages of their life. It can be a time to draw on personal and professional experiences to open new doors of opportunity and education and a time to realize potential and accomplish goals previously delayed by careers and raising a family.

Although the opportunities are endless, a successful retirement doesn’t come without its hurdles. There are many things to consider in order to get it right, such as living on a reduced income, creating a health and wellness strategy and evaluating relationships. Also important is the allocation of personal time, determining living arrangements, and recognizing change in social roles. There is also the unfortunate but necessary adjustment to the eventual death of loved ones.

During the first days, weeks, or maybe even months of retirement, people often experience a blissful honeymoon-like feeling. No boss, no job, no worries! Just time to sit around and do whatever crosses your mind. During this period, people generally have little motivation to plan for the future.  But as the honeymoon period winds down, a number of newly minted retirees report a feeling of disenchantment. Retirement no longer feels like an extended holiday. Time begins to weigh heavily on their shoulders. Playing golf five times a week begins to feel like a chore. Projects around the house lose their appeal, and there can be a feeling that causes retirees to ask the question, “Is this all there is?” Frustration and disappointment can mount as some retirees get caught in this vortex and are unable to get out.

The life we lead is a result of the choices we make. That means in pre-retirement and retirement years, it’s important to make the right choices—ones that build a fulfilling and energized retirement. The majority of successful retirees recognize the power of creating a realistic retirement vision and an action plan to achieve it. Armed with this mental model, they are able to make sound choices and progress toward their desired results. You can work in a systematic way towards formulating a clear and focused retirement vision. In a way, your experience in early and mid-life makes you more aware and articulate than ever before concerning your own priorities; a better executive for the next phase of life. Remember, it is equally important to consider how you will spend your time as it to know how you will spend your money.

You can make the difficult transition into retirement easier by exploring your expectations and desires. With some careful prioritizing—and collaborating with your advisor—you can design a working plan for retirement that may surpass all your expectations.

First, imagine yourself in your first six months of retirement, then, at one and two years out. You can then ask yourself to visualize the end of your retirement, when you are 90, 95, or 100+. What are you most proud of? What have you done that has brought happiness to you and to others? What legacy will you leave behind? It’s important to communicate personal desires and goals to your advisor. That way, he or she will be better equipped to help you develop a plan that strikes as close as possible to what will truly make you happiest.

Most people know someone who has made a successful retirement. What is it about those people that you admire? Is it their family relationships, their energy and enthusiasm, or perhaps their overall sense of wellbeing? Think then of those challenged by retirement. In your opinion, what are those individuals doing or not doing that makes them less successful? Is it the exorbitant amount of time they spend watching television, their lack of adventure, or possibly a sense of helplessness toward this ever-changing world? Once you’ve recorded a retirement vision, share it with a partner or spouse, close friends—and of course with your advisor. This process of sharing will provide different perspectives and help shape your final vision.

Optimism is key throughout the retirement visioning process. It’s important to focus on the rewards of a balanced retirement; meditate on the feeling of being complete, enriched, and financially secure. Retirement visions should be reviewed and rewritten as often as necessary, until the vision feels right and is in line with your wants, needs, and beliefs. Meet with your advisor regularly to review your retirement vision. Interrogate and revise your plan to determine what’s working and what is not. You can then identify what changes are required and work on developing targeted ideas and solutions.  As you enter the second-longest phase in your life, take an informed, active role in getting it right. With appropriate guidance and thoughtful planning, you will be able to enjoy life after work, even relish it.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage. For more information, please visit www.hfgwm.com or call 832.585.0110.

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Copyright © 2017. HFG Wealth Management, LLC. Investment advisory services offered through HFG Wealth Management, LLC – An independent Registered Investment Advisory firm registered with the SEC. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Therefore, any information presented here should only be relied upon when coordinated with individual professional advice. [ more disclosures ]