It’s not unusual for investors to consider retirement planning a numbers game that focuses on the size of a nest egg, a desired rate of return and how much to withdraw annually to cover living expenses. As with many areas of life, though, there are a host of other factors to consider. Many individuals and couples approach retirement with personal goals such as spending more time with family or supporting causes that matter to them.

Adopting a holistic consulting approach that focuses first on life goals and future aspirations before selecting investments may increase the chances of living the retirement lifestyle that you desire. Values play a significant role in how individuals manage their money, especially during their later years. While we often postpone certain aspirations or activities when we’re busy starting careers or raising families, accommodating your personal needs may make the transition to retirement a more rewarding one.

Another benefit of holistic consulting is that it may provide a comprehensive view of all areas of your financial life. Within many households, assets may exist in compartments earmarked for retirement, savings and investments, real estate, insurance, trusts, etc. This approach may lead to redundant strategies or exposure to unnecessary levels of risk. Holistic financial consulting may help you take a broader look at all of your assets and improve your financial situation in a number of ways. Some financial advisors report that the process has helped clients eliminate debt, better understand the financial decisions that support their situation and improve family communication regarding money issues.

Discovery and Goal Setting

As a prelude to holistic financial consulting, ask yourself – and your significant other, if appropriate – these questions that seek to probe deeper into lifestyle and personal values issues:

4How do you envision the rest of your life?

4How do you want to spend your time?

4Are there goals or desires that have been important to you but you have not acted on because of work or family commitments?

4Do you have fears or concerns about retirement?

4Are there aspects of retirement that make you excited or happy?

Planning to Pursue Your Goals

Once you have greater clarity about your personal goals you are ready to craft a financial roadmap that supports them. Don’t be surprised if you end up with multiple goals. A recent survey sponsored by PlanSponsor.com found that investors aged 50+ hope to take on multiple challenges in retirement; domestic travel, hobbies, international travel and a new career were mentioned by more than 80% of respondents.1

Achieving your goals is directly linked with your ability to finance them along with meeting other obligations. Luxury travel, for example, costs significantly more than maintaining a garden at home. Living in a large, expensive home may require significant financial resources, but being close to loved ones may be high priority. In fact some retirees continue to provide financial support to children or grandchildren. It’s also essential to consider necessities such as the cost of health care. Medicare is the primary insurance provider for older Americans, but benefits don’t begin until age 65. Many retirees purchase supplementary coverage to pay for routine medical services and long- term care that Medicare does not cover.

Sources of Retirement Income

Many Americans rely on a combination of income sources in retirement, including Social Security, assets from an employer-sponsored retirement plan, an IRA2, savings, real estate, even income from a job. Maintaining tax-deferred accounts, such as qualified retirement plans, for as long as possible enables you to defer taxes on withdrawals. Once you reach age 70½, the IRS mandates required minimum distributions (RMDs) from the plans based on your life expectancy.

If you need more money than your RMDs will supply, you may want to consider tapping taxable investment accounts, investing in dividend-paying stocks3, or owning bonds that pay regular interest. Your financial advisor can help you analyze all of your potential sources of retirement income and determine whether you have enough to pursue your goals during retirement. If there are gaps, you may want to consider saving more if you are still working, reducing expenses, or working part-time to make up the difference.

An Ongoing Process

Holistic financial consulting typically doesn’t end when you retire. It’s important to regularly monitor how well your plan is supporting your immediate and longer-term goals. As you age, there may be changes in your personal situation that require a modified approach. But putting your personal needs first may bring you closer to the retirement lifestyle that you desire.

1Source: PlanSponsor.com, March 2007

2Early withdrawals before age 59½ may be subject to a penalty tax.

3 Stock investing involves risk including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rate rise and are subject to availability and change in price.

Bazile R. Lanneau, Jr., JD, CFP is a Financial Advisor with and offers securities through Linsco/Private Ledger (Member NASD-SIPC).

This article is not intended to provide specific investment or tax advice for any individual. Consult your financial or tax advisor with questions.