Worried About Having Enough $$ in Retirement? Maybe You Shouldn’t.



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Good news for retirement planning

We counsel our clients that saving and disciplined investing for the long term are the keys to a comfortable worry-free retirement.  Hopefully, we’ve convinced many of our clients that they are on the right path to financial success.

Good News for Retirement Planning

As further evidence of this counsel, we wanted to share a recent study which suggests that you can save and invest your way to a financially successful retirement.  That’s the bottom line of a recent analysis published in Financial Planning Magazine.  The article, authored by Craig L. Israelsen, Phd,  is aptly titled “Sigh of relief’ for Clients Who See This Retirement Analysis.”

The study is based on historic returns for a series of hypothetical clients.  The analysis assumes each client began working in a different year.  For example, one particular client in the study began working each year from 1926 through 1956.  The rest of the assumptions apply to all of hypothetical clients, only the returns vary, based on the date they began working and saving.

The clients began saving 8% of their $50,000 salary at age 35 and the study assumes a 1.5% increase annually until retirement at age 70.  The savings are invested in a portfolio comprised of 60% stocks and 40% bonds for the balance of each client’s expected life, ending at age 95.  At age 70, the client retires and begins to withdraw an annual amount equal to the annual required minimum distribution (“RMD”) from an IRA.  This annual withdrawal (based on the increasing RMD rates) continues throughout their remaining lifetime.

If you’re interested in seeing additional study results, please click here to access the full article.  If you’d like someone to help you determine if you’re on the right track, we would be happy to assist.

Horizon Wealth Advisors is a Houston based fee-only wealth management firm. Horizon is a fiduciary advisor. We specialize in helping successful individuals and families understand, organize, and manage their often complex financial situations. Horizon offers integrated financial planning and investment management services.

Larry Maddox, CFP®, CPA
Larry founded Horizon Advisors, LLC in Houston, Texas in 1999 with fellow business partner Joe Thomson. He collaborates with our wealth management team and other external advisors to provide comprehensive wealth management services.

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