Building a Nest Egg
You should start thinking about and saving for retirement as soon as you start working. It's never too soon. By 40, maximize contributions to your 401K and savings. Every dollar you put away now can be worth $4 in 20 years.
Wondering if he's on track.
Michael was referred to us by a client who has been with us for many years. Michael is 40, married, with two children, 12 and 8. He would like to retire at age 60 and spend his retirement traveling with his wife. He also wants to make sure that he will be able to contribute at least 50% of his children's college tuition.
Here's How We Help Michael
Since Wiley Group is primarily a retirement planning firm, most of our clients come to us when they are nearing retirement. From time to time, however, we are introduced to younger people through referrals from existing clients or through our website. Even though retirement in 20 years (or more) may seem like an eternity away, it is never too early to begin growing your nest egg.
1) Evaluate Current Portfolio
First, we evaluated Michael's current spending and extrapolated future expenses. We then ran a Financeware™ analysis to see what Michael's chance of success was, given his current asset levels and savings habits. We then ran a complete portfolio analysis on his current investments to make sure that he was properly balancing risk and return.
As it turns out, Michael was not saving enough in his 401(k) and tax-deferred investment vehicles to retire at 60 and keep his standard of living at what he had expected. His portfolio was also too conservative for his goals and risk tolerance. He had set up college savings plans, but they were somewhat underfunded.
2) Implement A Plan
Wiley Group gave Michael several recommendations to increase his savings, both for retirement and his children's schooling. We also made some small adjustments to his current investment portfolio allocation in order to improve his chances of success in both his educational funding goals as well as his retirement plan.
3) Monitor The Plan
Michael has been working with us for over a year now monitoring and fine-tuning his plan and, with some small adjustments, we believe he is on track to meet both his educational funding goals in 6 years and his retirement goals at age 60.