From time to time, a new prospect that I’m meeting with asks me, “What are the 4 pillars of retirement and how do they relate to retirement planning?”
The 4 Pillars of Retirement
If you have listened to my radio show, then you know that the 4 pillars fo retirement are the foundation that I have built my firm around. You see them in the lobby, on the Modern Wealth Management website, my radio show, and even how I have structured my firm to be a “one-stop-shop” in planning for retirement. As a reminder, however, the Modern Wealth Management 4 Pillars of Retirement are:
You may be asking yourself (and there are many who wonder this exact question): Why these 4 areas are so important? Especially when you consider how many investment firms operate solely from the investment side of things. If you want a CPA at tax time, your investment-only advisor probably has a stack of business cards they’d be happy to share. They may even take a quick phone call from the CPA to double-check the figures they are reporting to the IRS are accurate. Need a will drawn up to pass along your investments to family members? Guess what, those investment only advisors probably have another stack of business cards of estate attorneys as well? Need some insurance, no problem!
Comprehensive Planning is Important
Now please don’t misunderstand, it’s not that I think all advisors who don’t do comprehensive, 4 pillar planning are bad advisors. On the contrary, there are some excellent advisors who work as fiduciaries on the investment side only. What I do believe, however, is what gives most people the best chance of success is a plan that takes into consideration all of our 4 Pillars and even more importantly, all four “pillar-professionals” working together under one roof for the common goal.
For example, the advisor of a retiring couple works together with a CPA. Together, they decide the best order for the couple to take their RMDs (required minimum distribution) from their retirement accounts to help minimize their tax liabilities. At the same time, the insurance professional down the hall comes in to give his opinion. Such as, if the couple is over or under-insured after the advisor briefs him on their retirement goals. What products can be dropped/purchased to help them meet these objectives? Before they leave, an appointment is set with the estate attorney that gives the advisor ample time to explain what the retiring couple’s goals are and what they expressed they wanted to happen to their assets upon one or both of their deaths.
Navigating the 4 Pillars of Retirement is Complex
The reality is, what is really involved in planning for retirement is complex. Really complex. Even the simplest of details mishandled can really wreck retirement plans. My advice? Make sure to do your homework when it comes to finding a financial advisor. While there are some great ones out there, like any other profession, there are also some not-so-great ones. At the end of the day, you only get one life. Make sure the financial area of your life is being handled by an advisor that’s knowledgeable about the 4 pillars of retirement. Not just the Wall Street side.
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Dean Barber
Founder & CEO
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The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.