4 retirement planning tips from a financial advisor

While we can carefully and strategically plan our future, the reality is that once we get there, things may or may not turn out the way we thought and hoped. This is especially true when it comes to retirement planning, which is why we were curious to hear about the unexpected financial wellness lessons learned in retirement by someone who has spent their career planning for retirement.

Below, Andy LaPointeformer financial advisor who specializes in retirement planning, shares the four key lessons he learned in retirement, along with advice for those of us currently saving money for our golden years.

Lesson 1: Design your retirement lifestyle first

When developing a retirement plan, LaPointe says most people set a goal for how much money they think they’ll need in retirement without first thinking about how they want to enjoy it. in their later years. “Don’t think about money, think about lifestyle first,” he says. “Then create the income to sustain your [retirement] lifestyle.” For example, if you plan to travel during your retirement, you’ll need to factor that into the amount of money you’ll need to save.

Lesson 2: Start building passive income streams

One of the best retirement planning strategies, according to LaPointe, is to create multiple streams of passive income that you can then use to help fund your retirement life, so the sooner you start, the better. Passive income, he explains, is money you receive that doesn’t require time or energy to earn, like real estate. And, as with investing in the stock market, he adds that diversification is important for passive income streams (eg, a mix of residential and commercial real estate properties).

Beyond real estate, there are other ways to use your skills, talents, and life experience to create passive income. Examples of LaPointe actions include writing books, creating digital courses, or offering consulting services. While some passive income streams may not be as lucrative as others, when it comes to retirement planning, every little bit counts. Even a few hundred dollars a month can make a big difference in retirement.

Don’t have a passive income stream yet? LaPointe reminds us that building and creating these flows takes time, often years, so be kind to yourself. And, he says, you can create those streams of income even after you’re already retired.

Lesson 3: It takes longer to replenish an emergency fund

Even when you’re retired and enjoying your golden years, life goes on and unforeseen expenses will inevitably arise. The difference is that now that you don’t have a regular paycheck, it’s harder to replenish your funds for rainy days.

The solution: Save more than you think you’ll need in retirement. To do this, LaPointe recommends finding small ways to keep more of the money you earn for yourself, like buying a used car instead of a new one or opting for vacations or local staycations. . You can then allocate the money you save to a larger emergency fund.

Lesson 4: Ask for financial advice

“Don’t trip over dollars to save pennies,” LaPointe says of investing in a financial advisor. Often, he says, people avoid paying for professional advice to save money, but it can cost them more in the long run. While there are plenty of online services that can offer financial advice, LaPointe says nothing beats working with someone 1:1 and ideally in person. Working with a financial advisor requires sharing many personal details about your finances and future goals, and doing so over the phone or virtually doesn’t create the same intimate relationship.

Additionally, LaPointe strongly encourages interviewing the financial advisor to ensure they are well placed to advise you. Ask about their financial credentials, registrations, education and experience. He even recommends going so far as to ask them what their net worth is and what their investment portfolio looks like. “You also have the right to know the intimate financial details of the financial adviser,” he says, given that you trust him to advise you on what to do with your money. “There is financial information that every person should share to have a transparent relationship.”

Oh hi! You sound like someone who loves free workouts, discounts on top wellness brands, and exclusive Well+Good content. Join Well+, our online community of wellness insiders, and unlock your rewards instantly.