Retirement Planning
Capital Ingenuity helps clients understand the complexities of retirement planning.

Retirement Goals

Many retirement planners unfortunately use highly over-simplified methods to determine potential retirees' financial needs in retirement. For instance, some planners say that the retiree should plan for earning 75% of their final year's salary, each year, throughout retirement. Some investment advisors may even make recommendations based primarily on an individual's psychological risk tolerance without regard for the individual's lifestyle goals in retirement. At Capital Ingenuity, we believe that using simplified methods to determine an individuals needs is for the convenience of less sophisticated planners and simply unacceptable.

At Capital Ingenuity, we take a more complete approach. Retirement planning should be fun, because potential retirees should be planning how they "want" to live in retirement instead of haphazardly planning and letting the end result determine how they "need" to live. We help our clients learn how to create a realistic vision of their life in retirement and how to plan accordingly to have the greatest likelihood of achieving as many of their goals as possible.

Retirement Accounts

There are several different types of retirement accounts that may be used to help save for retirement including, but not limited to, traditional 401(k) accounts, Roth 401(k) accounts, 403(b) accounts, traditional Individual Retirement Accounts (IRAs), and Roth IRAs. Depending on the type of account, money can be invested in a pre-tax or an after-tax manner. Additionally, each type of account has specific limitations and restrictions. Capital Ingenuity helps clients understand the different types of retirement accounts available and helps them learn how to analyze which type of account may benefit them the most.

Retirement Planning Methods

Retirement planning is not an exact science. There are several different methods that can be used depending on how much money a person expects to have accumulated at their desired retirement age. For example, a person that may not have adequately funded their retirement can use a method called the "capital depletion method" to plan their retirement. This method assumes that an individual will completely deplete their retirement funds by a certain age, such as 85 or 95 years old. It also assumes, however, that the retiree will be able to meet their assumed expenses up until that point.

On the other hand, a person planning more rigorously can use other methods such as the "capital preservation method" or the quot;inflation adjusted capital preservation method." In using these methods, more money is required at retirement age compared to using the capital depletion method; however, the retiree is substantially less likely to run out of money. This means that the retiree will likely have money available regardless of how long they live. Additionally, these methods allow the retiree a greater opportunity to leave a sum of money to their heirs or a charity, regardless of how long they live, if so desired.