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The 10 Questions to Ask When Planning for Retirement
September 26, 2023
Adam Yale, Partner and Portfolio Manager
Bruce Van Kooten, CFA®, Partner and Portfolio Manager
Chad Clauser, CFA®, Partner and Portfolio Manager
Tom Sudyka, CFA®, Partner and Portfolio Manager
Many young career professionals with the potential to earn substantial money over their lifetime have no investment plan for retirement. You may think that retirement is 30 or 35 years away, so why think of it now? Others may fail to plan due to a lack of investment knowledge, lack of discipline, fear of losing money, not knowing how to set clear goals, or simply being too busy with life.

Key Takeaways:

  • To maximize your financial—and emotional—security in the long run, you should save as much as you can, as early as you can.
  • It’s important to know what kind of investor—conservative, moderate, aggressive—you are before starting your retirement plan.
  • Select a reliable partner to help you navigate the retirement planning process, and regularly review and update your plan as needed.

In this three-part series, we will guide career professionals on how to ask the right questions when planning for retirement, on how to create the best strategies for your long-term financial security, and essential life issues to consider. To start, it’s important to follow a checklist of best practices well before retirement. Here are our top ten:

1. Why Do I Need To Plan Now To Reach My Retirement Goals Decades From Now?

Retirement planning is the process of building and managing wealth for you to use for your family and future generations. It’s important to understand the basics before getting started. But why is it important? A few reasons:

PRESERVE AND PROTECT WEALTH — Creating a strong investment program for your retirement not only may protect your wealth from inflation and markets, but grow it for future generations.

CREATE INCOME — Providing income for your family equal to that in your working life is often important to many retirement investors.

MINIMIZE TAXES — Effective retirement planning can help minimize the tax burden your heirs will face when they inherit assets. In addition, the current deferral of wages into retirement funds can lower your taxable income in the present.

PERSONAL — Personal goals such as travel, sporting pursuits, and other leisure activities are often the reward for accumulating wealth during your career.

PHILANTHROPIC — Retirement planning can also help you support the causes and organizations important to you.

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2. What Is My Net Worth Today?

While it may seem obvious, to know where you want to go, you need to know where you are now. To set your financial road map on the right course, take stock of all of your assets. Tally the amounts in your personal bank account (or accounts), your brokerage accounts, plus mutual fund accounts, and retirement, pension, and insurance plans. Include your monthly social security deposits. If you own a business, include business assets. If you are married, include the amounts for both spouses. Subtract your liabilities to arrive at your net worth.

Equally as important, know which of your assets are liquid, meaning you have immediate access to them; and which assets are not liquid, such as your home or other property, which means you would have to sell the assets in order to convert them to cash.

Creating a strong investment plan for your retirement can not only protect your wealth from inflation and markets but grow it for future generations.

3. How Much Do I Need to Retire?

To maximize your financial—and emotional—security in the long run, you should save as much as you can, as early as you can.

When you want to retire will, of course, impact how much you’ll need. A realistic time frame is crucial for building lasting wealth. The longer your time frame for retirement, the greater opportunity you have to invest, and to manage the inevitable market ups and downs. Career professionals who start early may have three decades or more to invest for retirement.

But how do you know if you are setting enough aside to reach your investment goals?

The Power of Time

If your goal is to accumulate $500,000, you’ll need 20 years of investing $1,000 monthly. If your goal is $1,000,000, you’ll need 21 years by investing $2,000 monthly. Each assumes 6% annual growth, compounded monthly.

– LONG-TERM INVESTMENT GOAL –
Monthly Investment $500,000 $1,000,000 $2,000,000
– YEARS TO REACH GOAL –
$500 30 40 50
$1000 20 30 40
$2000 13 21 30

This hypothetical example does not reflect the actual performance of an investment. Assumes all earnings are reinvested and excludes taxes and fees. Source: BankRate Monitor.

4. What Standard Of Living Do I Want To Have In Retirement?

Does retirement mean a quiet cabin in the woods, par excellent golf, visiting your grandchildren or the world, or rest and contemplation? Would you prefer to relocate or buy a second home? Do you want to maintain your current standard of living? Or exceed it in comfort and opulence?

Many retirees also continue to work. Perhaps not full-time, but part-time. All will impact your preferred standard of living.

Note that inflation can negatively impact your standard of living. According to the Consumer Price Index, an average annual 2% inflation rate means that you’ll need more than $152,000 in 20 years just to equal the buying power of $100,000 today. And today’s inflation rate is much more than 2%.

5. What Is My Tolerance For Risk?

It’s important to know what kind of investor—conservative, moderate, aggressive—you are before starting your retirement plan. If you hide under the covers for days when your portfolio losses value in any given month, you are likely a conservative investor. If you see short-term losses as an opportunity for long-term gain, and sleep well at night, you are likely an aggressive investor.

6. Is My Current Portfolio Appropriate For My Goals?

Your current assets should also be allocated to investments that are aligned with present and future goals. Do they need to be changed?

It’s important to know what kind of investor—conservative, moderate, aggressive—you are before starting your retirement plan.

7. Is My Legal Paperwork In Order?

Do you have a will, trust or estate plan, power of attorney, and medical directives? If you own a business do you have a succession and/or exit plan? Do you have an estate attorney? Though nobody likes to consider their untimely demise, it’s important to make sure that your spouse, children, grandchildren, and significant others are secure, know where to find your directives and know what to do next.

8. What Kind Of Legacy Do I Want To Leave?

How do you want to be remembered? You may want to instill your financial values in your extended family through a will or trust. Or contribute to a philanthropic effort or social cause meaningful to you. A legacy is your epitaph.

9. Can I Do It Myself?

Should you be your investment advisor? Possibly. But investing on your own can be challenging. You are likely fully invested in building and managing your career, not in managing the fruits of your efforts. Plus you may lack the time or knowledge to personally invest.

If you choose to partner with a wealth manager, it’s important to consider if they are a fiduciary. By law, fiduciaries must put client interests first. Also consider their investment credentials, if their goals are aligned with yours, if their fees are reasonable and transparent, if they communicate clearly and regularly, and if the investment strategies that they specialize in make sense to you.

10. What’s My Plan Of Action?

Now that you’ve asked the right questions, it’s time to put a plan of action in place—to build and monitor your retirement portfolio for lasting wealth.

If you choose to partner with a wealth manager, it’s important to consider if they are a fiduciary. By law, fiduciaries must put client interests first.

Final Thoughts

At Lawson Kroeker, we spend a significant amount of time thinking about our clients’ future goals, their financial plans and our role in helping them get to where they want to be. We know our clients have many retirement planning and wealth transfer options available. We also understand sometimes life happens and that you need your resources at hand in case of an emergency.

It is important to take all of these considerations into account when thinking about how to transfer wealth to adult children, a philanthropic organization, other causes or institutions. We strive to custom construct wealth planning platforms for you to achieve your goals.

About Lawson Kroeker

Lawson Kroeker Investment Management, founded in Omaha, Nebraska, is a third-generation wealth management firm that helps a select group of high-net-worth clients achieve their life goals by providing investment advice and building custom solutions. Lawson Kroeker’s disciplined, patient investment management process focuses on owning the stocks and /or bonds of a focused group of individual businesses. Established in 1986, the firm has under management approximately $600 million in assets.

Adam Yale, Partner and Portfolio Manager—Mr. Yale started his investment career in 1997 with First Manhattan Co., an investment advisory firm in New York, NY as an analyst of publicly-traded real estate securities and direct real estate investments. From 2006 until the 2022 merger with Lawson Kroeker, Adam was the sole Principal at Red Cedar Capital, LLC, a Registered Investment Advisory firm he founded that employed a fundamentals-based investing strategy. He earned a B.A from the University of Michigan and a Master’s in Accountancy from the University of Denver.

Bruce Van Kooten, CFA®, Partner and Portfolio Manager—Mr. Van Kooten has been a Lawson Kroeker Partner and Portfolio Manager since 2006 and has more than 45 years of institutional and private investment management experience. Bruce has worked as a trust investment officer with First National Bank of Omaha and as a senior investment portfolio manager in Denver at KPM Investment Management, which became Wells Fargo Private Asset Management. Bruce earned the Chartered Financial Analyst (CFA®) designation in 1987 and is a member of the CFA® Society of Nebraska. He has a Bachelor of Science degree in Business and Economics from Iowa State University.

Chad Clauser, CFA®, Partner and Portfolio Manager—Mr. Clauser began his investment career as a senior analyst at an Omaha-based investment advisor Tributary Capital Management, and later as vice president of the New York investment bank Credit Suisse. He earned the Chartered Financial Analyst (CFA®) designation in 2009 and is a member of the CFA® Society of Nebraska. Chad attended the University of Nebraska in Lincoln, where he received a bachelor’s in Finance and completed minors in both computer science and mathematics.

Tom Sudyka, Jr. CFA®, Partner and Portfolio Manager—Mr. Sudyka began his career as a portfolio manager with several large Midwest-based investment management companies. He served as a managing director and founding partner of BPI Global Asset Management before joining Lawson Kroeker in 1999. His investment decisions are guided by his 30+ years of investment management experience. He has an M.B.A. in Finance from the University of Nebraska and a B.A. in Finance from Creighton University.

Articles in This Series

PART 1: The 10 Questions to Ask When Planning for Retirement (This article)
PART 2: Retirement Planning: 7 Essential Life Issues to Consider (click here)
PART 3: Building Wealth for Retirement: Strategies for Financial Security (This article)

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