IFA Interview with Christine Benz
Start thinking about your finances and retirement
- Household savings and spending rate
- Never too late to be thoughtful about saving for the future
- Not have to start at a granular level, but set a savings target
- Reverse-budgeting
- Plan to save x; see how much you have left
- Automating contributions into savings
- Benefits of good financial advice
- Sometimes it's worth at starting with personal questions, i.e. how you're doing, and start from there, a holistic approach
- An issue exists with trust with financial advice
- Many excellent advisers out there
- How to find a good advisor
- Must be a fiduciary
- Fee-only structure, financial advice is not incentivized
- In US, look for a certified financial planner - a CFA
- Financial planning as more important as investment advice
- Insurance
- Home equity
- Other aspects apart from investment portfolio
- A wholistic voice
- A series of interviews
- Deep subject matter experts in multiple areas
- Healthcare planning
- Role of home equity in retirement plan
How to phase into a retirement
- Start with reducing work hours
- Other variations - tweak of type of work, i.e. de-emphasizing some things, emphasizing others
- Fully remote work, cut out the commute
- Entrepreneurship
- Less intellectually rigorous
- Series of phases - early phase - blended, later - fully retired
I left out commenting on the gender gap, it was completely unintentional.
- Bucket strategy - Harold Evensky - https://en.wikipedia.org/wiki/Harold_Evensky
- Retirement spending
- 4% is too specific a percentage, but -
- 4% for the first year
- 4% + whatever the inflation rate is the second year
- Be flexible about spending - take less when portfolio is down, or more in a good market
- If non-portfolio income sources exist, maximize those
- Horror stories exist with taking out too much when first retiring
- Sequence risk - something to be aware of, encountering bad market environment
- If spending too much in the beginning period, it leaves less in portfolio to recover with
Retirement planning
- Life is a series of dots; dwindling as you get older!
- You're getting pulled away from work, and you're left with experimenting with your money
- It all comes down to relationships we have
- Family, advisors, etc.
Last piece of advice
- There are a lot of DIY type of investors
- Accumulation is not very complicated (same investment mix), but financial and retirement planning is complicated, you need a lot of data to go through
- You can model out cash flows
- Get a second set of eyes, but start today
References
- Index Fund Advisors video - https://www.youtube.com/watch?v=8yfwFInYzdI