Kim Gaxiola’s Tip #3:  Plan Your Retirement Goals

This has to do with figuring out how much income you’ll need throughout your retirement.  It is a huge and time-consuming process that many people, even the most savvy professionals, can find overwhelming – calculating years of possible future expenses.

“It is a daunting process to consider, and that’s why I’m in business – that’s why people come to me – to help them figure it out. It can be confusing. There is so much information out there, and that’s not necessarily good because there is so much advice to try to make sense of, and so many differing opinions that it’s really hard to figure out what the right idea is behind it all. But this first step is crucial in creating a plan.”

She continues, “but when you’re planning for anything, be it retirement, changing jobs, whatever your life goals are; in order to make major life changes, you need to have a solid financial foundation. Then you need to understand how much money you have, how far that money will get you, and how the existing money you have can work for you.  Being able to make changes in your life for the better, this is the power of planning.”

“If you’re thinking about changing your career, you’re going to have a much easier time making it happen, and minimizing the stress that comes along with it, when you know you could manage without any job for a year’s time.  This would make a transition much easier. Worst-case scenario is that new job doesn’t work out. If that happens, you need to know that you have money to fall back on. That makes considering a transition for the better possible.”

“Same with retirement.  When you want to start dimming the switch on work hours, or even flipping the switch entirely and retiring completely, you need to know how much money you’re going to generate from your accumulated savings.  At that time, it’s not about spending down your life’s savings, it’s about making the money work for you so you can live off the gains and interest the portfolio produces for you.”

Kim says that people don’t always understand how to approach retirement. “I get asked all the time from people ‘how much money should I have to retire?’ If you don’t want to outlive your money, the better question is ‘how much money can I safely withdraw on an annual basis?’  Plan according to that answer. If it’s not an adequate income stream, then you have to make adjustments. And that is the top fear of people going into retirement –running out of money before they run out of breath.”

It’s a nerve-wracking consideration, but imagine knowing you’ve planned for your money to last for your lifetime. That would bring tremendous feelings of relief.

To Kim’s earlier point that women tend to be more risk averse than men, and that this can affect their career and investment choices, this risk aversion can extend to deciding whether or not to hire a financial planner. A client must trust that the overall financial plan will not only reflect the market and the timeline, but also the person investing. A woman must decide to take the plunge and trust her planner, so she can feel good about the plan.

 

So, how does someone choose a financial planner?

“I get asked this question a lot,” Kim says. “And it goes back to what my own mentor told me when I got into this business. He said ‘your client base will eventually look like an extension of your family and friends.’ I love that advice. And as I have gone through my career and interviewed with potential clients, I’ve always thought ‘Could I have them over for a barbeque at  my house?’ Or if they are older, I think ‘would my parents be friends with them?’ And I tell this to clients because they have to be comfortable with somebody. You have to know they have the credentials and experience, of course. You can tell a lot about that when speaking with them, in their tone. As they talk about possible options, you can hear whether or not they are speaking with confidence and credibility. But you must also be comfortable with the planner you choose as a person.”

This is why Kim enjoys working in Silicon Valley, with many clients who work in the field of technology.

“I feel that women who work in technology are typically smart, confident, decisive and educated. These characteristics make them very good at their jobs, but it also makes them very good at hiring people to do work for them. They will typically be able to decide whether or not to hire me without a lot of convincing on my part. This fits my personality well. But there are also many advisors out there who enjoy working with indecisive people, with the people who need a lot of hand holding along the way. People will get a sense of the kind of person a financial planner is, and they should choose someone they feel they could easily get along with.”

Another aspect of considering whether or not to use a financial planner is cost. Kim knows that many people feel they don’t want to spend the money for professional help, or feel they don’t have enough assets to warrant the cost of a planner. But as people get closer to retirement, whatever money they have must be put to maximum use. And hiring a professional is always a smart move.

“By the time clients are ready to sit down with me, they’ve already wrapped their heads around spending money on a professional financial plan, and are comfortable with it, knowing it will pay off much better for them in the end.”

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Go to techgirlfinancial.com to learn about the Lean In to Retirement strategy, and get practical advice on how to begin taking the steps you need to take to ensure a secure and happy retired life.

Kim’s next tip:  Create An Exit Strategy

The story behind each of the five steps appears here on Moxievoice. Kim will be shares her own expert opinions that go well beyond the practical steps you can find at TechGirl Financial,  she shares her own personal journey as she navigates through this process herself.

TechGirl Financial serves individual clients managing their portfolios, corporate retirement plan benefits such as 401(k)s and profit sharing plans, and provides financial workshops to professional associations, and worksites.

Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member FINRA/SIPC.  Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.  Cambridge and TechGirl Financial are not affiliated.