Last month, we considered the situation of a teacher who wondered whether she was on track for a financially secure retirement. That situation applies not only to teachers, but policemen, firefights, and nurses—pretty much anyone with steady paycheck income and have put in around 25 years of employment.
In this article, we’ll review the conversation I had with Joseph, a 52-year-old doctor with a 401(k) retirement account.
Joseph was worried about his retirement savings. “I have a 401(k) with my medical practice,” he said, “but I only have $152,000 in it today.”
I replied, “Don’t forget about your other investments or accounts. Do you have any of these?”
“I do have a brokerage account, with about $400,000 in it today.”
“So you actually have over $550,000 today in potential retirement assets,” I pointed out.
“I never looked at it that way.”
“Having $550,000 today isn’t the end of the conversation, Joseph,” I said. “The next question we need to answer is this: Is the money positioned properly to accomplish what you want?”
Include All of Your Investment Assets in the Retirement Discussion
Joseph went from thinking he was in serious trouble to realizing he had built a meaningful financial foundation.
When you think about retirement assets, do you view your IRA or 401(k) as separate from an investment account, or do you see them as one pool of money that will eventually replace your present paycheck? Instead of asking, “Is my 401(k) doing well?” you should ask, “Am I on track for retirement?” Those are two very different questions.
Your retirement income comes from all of your assets, and doesn’t care whether the money is derived from a 401(k), an IRA, or a brokerage or investment account. After retirement, all of those monetary sources have one job—to generate income so you can live the lifestyle you want. I explained to Joseph that retirement planning isn’t simply about accumulating the largest account balance possible. Ultimately, all of those assets need to help replace the paycheck that stops once you retire.
Planning a Coordinated Strategy for Retirement
After discussing the important basic questions (his age, how many more years he expected to work, how much retirement income he would like, ongoing contributions, risk tolerance, and different accounts), we considered how his 401(k), brokerage account, future savings, and other retirement resources could be coordinated into one comprehensive retirement strategy.
Joseph’s situation illustrates something I see frequently: People often know how much money is in each account, but they don’t necessarily know how these accounts can be integrated to produce retirement income to replace their existing paycheck.
A financial advisor like Isakov Planning Group can add significant value—not just by managing investments, but by helping someone understand where they are today, where they want to go tomorrow, and whether they’re truly on track to get there.
Contact Isakov Planning Group today to evaluate whether your retirement plans will result in secure, sufficient income to allow you to live the way you want tomorrow.
