7 Ways to Build the Best Retirement Plan

By Chris Duderstadt

January 10, 2022

7 Ways to Build the Best Retirement Plan

Key Points – 7 Ways to Build the Best Retirement Plan

  • Thinking of Retirement as Reaching Financial Independence
  • Someone’s Else Retirement Plan Might Not Be the Best Retirement Plan for You
  • What’s Important to You?
  • What Do Retirement and a Long Road Trip Have in Common?
  • 6 minutes to read

7 Ways to Build the Best Retirement Plan

No one retirement plan is exactly the same, nor should it be. While your friends and family might have retirement plans that work well for them, that doesn’t mean they’ll work for you.

At Modern Wealth Management, we understand the importance of building the best retirement plan for YOU. Here are seven ways in which you can build your best retirement plan.

1. Striving for Financial Independence

It’s hard for people at a young age and even in midlife to comprehend what retirement really is because it’s so far out into the future. It becomes very abstract. If we rephrase the term retirement to financial independence, that kind of sets the stage for people to understand more about what life in retirement is.

When is the day you’re going to wake up and do whatever you want to do for the reasons that are important to you? Once that day comes, it’s no longer about how much money you can make or need to make. On that day, you will have reached a point where you have enough money and don’t have to work anymore.

Your retirement is the day that you stop working for your money and that your money starts working for you. That’s when you really know that you’re financially independent.

The Long Path to Truly Feeling Independent

Financial independence is what retirement is all about, but let’s take a deeper dive into defining the word independence. Independence is something most people crave from a very young age. While you might have felt a sense of independence at various stages of your youth, early adulthood, and working life, you likely accrued more responsibilities in the process.

For example, high school graduates often think they’re going to be independent when they go off to college. Not so fast. They might have a few more freedoms, but suddenly they start having to pay for things on their own or are likely still relying on their parents to assist them financially. They are experiencing some of the early steps toward striving for financial independence even if they don’t fully realize it yet.

Fast forward four or so years later, and that high school graduate is now a college graduate. Hopefully soon after graduation, they get a job and then the feeling of independence will follow. Again, not so fast. With that illusion of independence comes several responsibilities. Those include paying your own bills, living on your own, and making good first impressions at your job.

Once someone is feeling like an established young professional, they might once again start feeling a sense of independence. It’s right around that time where they might be getting engaged, married, and starting their own family. While those are certainly all blessings, independence seems to be elusive for much of our lives.

2. Communicating What’s Important to You Leads to Your Best Retirement Plan

There’s no doubt that attaining financial independence can be a big challenge. Even once you’ve reached it, the idea of leaving behind a paycheck is a concept that can be very hard to grasp. This is where our Modern Wealth Management team comes in to show you how the numbers line up and prove that you can have clarity, confidence, and control in retirement.

Another big challenge that we see among our clients is figuring out what to do after you’ve retired. What is important in your life (and if applicable, your spouse’s life) that you want to redirect your energy to? You need to have something to do and focus on.

If working is something that gives you fulfillment, it is something that you can still choose to do. Maybe volunteering or traveling the world are among your retirement callings. There needs to be something that you’re still working toward in retirement.

Our team is thankful to work with clients who truly start living their one best financial life in retirement. We can’t stress enough that once you’ve secured financial independence, it’s time to let your money work for you and enjoy your retirement. Don’t be those retirees who sit around and do nothing with your hard-earned money.

3. Front-loading Your Retirement Plan

Simply said, we take tremendous pride in putting our clients first at Modern Wealth Management. When creating a financial plan to get someone to and through retirement, we keep in mind that the individual or couple usually has about 15 years of good health to enjoy after they retire. That’s why we like to front-load your spending so you can truly enjoy the satisfaction of your long-awaited financial independence.

4. Seeking Out a CERTIFIED FINANCIAL PLANNER™ professional

While front-loading your retirement plan sounds like a simple concept, there is a lot that goes into it. Forward-looking, comprehensive financial planning is an art. The work of art starts with the selection of a CERTIFIED FINANCIAL PLANNER™ professional who is strictly focused on helping pre-retirees and retirees reduce various financial risks to achieve the highest probabilities of success.

But the selection of a CERTIFIED FINANCIAL PLANNER™ professional is just the brush touching the canvas in the art of financial planning. The full picture comes together when that CFP® professional works alongside a CPA and team of tax professionals to the build the best retirement plan for you.

5. Adjusting Your Plan as Things Change

Building a financial plan can do wonders for future retirees and retirees with mitigating taxes, maximizing Social Security, and much more. However, financial planning isn’t a work of art that can be finished in one day. It’s critical to revisit your financial plan with financial professionals at least a couple of times a year.

6. Rebalancing for 401(k) Is Critical

Let’s say you’ve started this year with a 60/40 portfolio, meaning that your 60% in stocks and 40% in bonds. That might be great for you now, but your portfolio won’t be at 60/40 by this time next year. That’s why rebalancing for 401(k) contributions is essential to fortifying your retirement plan.

Unless you’ve been living under a rock lately, you probably know that inflation has been running rampant. Our team not only has our eyes on the current status of inflation, but is factoring in for what its impact could be for months and years down the road. The same goes for taxes, interest rates, and various other financial factors. We stress-test how all of that could impact your financial well-being not just for the next few months to a year, but deep into your retirement.

We’ve visited with several people who are overly optimistic about market returns and how much they can spend. They are unintentionally setting themselves up for failure. On the flip side, we’ve seen people come in with the expectations of poor market returns and then they end up missing out on cool life experiences by not spending. A fluid financial plan can prevent those failures and ensure that you’re not missing out on a fun-filled retirement.

7. Think of Retirement as a Long Road Trip

Ever since founding Modern Wealth Management in 1996, Dean Barber has gone to work every day with the goal of helping people make the most of retirement. Dean never gets tired of hearing success stories from clients that came to fruition by making a financial plan.

Whether it’s on a road trip to your second home, a vacation, or for a special event, think about the parallels of that trip to retirement from the moment you enter your destination in the GPS to the time you arrive. While the GPS will give you an estimated arrival time from the instance you pull out of your driveway, the odds of you arriving at that exact time are slim to none.

From traffic jams and restroom stops to grabbing something to eat and getting gas, there are several factors that arise that the GPS isn’t accounting for once you leave. The same can be said with a retirement plan. We’ve already mentioned how things like market performances and the economy can change how you live leading up to and throughout your retirement. There are obviously things that will happen within your personal life that lead you to taking some detours as well.

Build Your Best Retirement Plan by Leaving a Legacy

Do you want to help fund your grandchildren’s college education(s)? Maybe there is a charity you’ve been wanting to support. Those things can happen if you take the time to implement them into your financial plan. Family is a huge part of almost everyone’s financial plan. If you’re married, it’s important to make sure that you and your spouse’s plans are positioned so that whenever you or your spouse passes on, the surviving spouse is in good hands.

Not to be grim, but the final destination of your retirement is reached when you die. It’s vitally important that you make all the final pitstops in the form of setting up a trust, will—whatever it may be—so that your loved ones can have a smooth trip to and through retirement as well. The goal of our Guided Retirement System™ is to do exactly that.

Getting Gratification Out of the Guided Retirement System™

As you can see, the journey to financial independence is a long, winding road. However, there’s so much gratification to be had once you officially reach it. We enjoy educating people about how to build the best retirement plan as we discuss current economic trends and events during our biweekly Modern Wealth Management Educational Series. Education is everything as you’re building your best retirement plan.

To learn more about how we build a retirement plan and what the Modern Wealth Management Guided Retirement System™ is all about, visit us here. We would love the opportunity to begin building your best retirement during a complimentary consultation with one of our CERTIFIED FINANCIAL PLANNER™ professionals today. We’re happy to meet with you in-person, virtually, or by phone—whatever is easiest for you.

We look forward to meeting with you soon to start building your best retirement plan.

Modern Wealth Management

Schedule Complimentary Consultation

Select the office you would like to meet with. We can meet in person, by virtual meeting, or by phone. Then it’s just two simple steps to schedule a time for your Complimentary Consultation.

Lenexa Office Lee’s Summit Office North Kansas City Office

Investment advisory services offered through Modern Wealth Management, Inc., an SEC Registered Investment Adviser.

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.