Retirement | August 31, 2018

Life Events | August 31, 2018

4 Things That Will Shake Up Your Retirement Plan

by  Laurie Wexler Gerber, MBA, Director of Marketing

While the media tends to focus on the many Americans who are completely unprepared for retirement, not every household has postponed a retirement savings agenda until midlife. According to a Princeton Research Associates survey[1], about 10 percent of respondents said they started saving for retirement in their teens. Nearly one-quarter (23 percent) started saving in their 20s, and 14 percent began in their 30s.

Great news, right?  Yes and no…Having a retirement plan in place early is an important way to amass a sizeable nest egg. But when a plan becomes outdated or disconnected from the specifics of your vision, you can wind up farther from your goals than you realize.

If you are not reviewing and adjusting your retirement plans annually, it’s time to conduct a midlife SWOT analysis. Download our latest guide to identify your plan's strengths, weaknesses, opportunities, and threats. Meanwhile, here are four reasons why regular reevaluations are so important:

1. You’re pursuing a new job or career path.

The average U.S. worker cycles through more than 11 jobs before age 50[2]. Even after becoming well established, the potential for job change persists; professionals between 40 and 48 trade jobs 2.4 times on average[3]. Job change can create a host of new financial and lifestyle realities that should be reflected in your retirement plan. A new executive compensation package, relocation (new home, new cost of living, new schools), a new retirement timeline: these inputs should be used to recalibrate your projections.

2. Your marital status is changing (divorce, remarriage, loss of spouse).

Many retirement plans are built around the assumption there will be two income streams contributing to savings accounts, two sets of Social Security benefits, and only one household budget to maintain. When divorce or the death of a spouse challenges those assumptions, plans need to be adjusted. Our guide on divorce financial planning outlines important steps to take before, after, and during a divorce.

swot analysis

3. Your employer-sponsored retirement benefits are changing.

Employers reevaluate their defined benefit and defined contribution plans every few years. The results of plan audits often include measures to increase participation and/or help employees save more in 401(k)-type accounts. If your default contribution rate changes, or an automatic escalation policy is implemented, you’ll want to think about how less take-home pay affects your monthly budget—particularly if you’re still trying to manage student loan debt or navigate the costs of a growing family. For example, your six-percent contribution rate may be set to auto-escalate up to 10 percent. This push to help you save more is often a good one, but it has to be aligned with your day-to-day spending.

If your organization is rolling out phased retirement benefits—as some 30 percent of large employers now are[4]—you may want to rethink your timeline, and take advantage of a few extra years of part-time work. Flexible hours and job-sharing options now allow many professionals in their 60’s and 70’s to retain healthcare benefits and supplement their savings while easing out of the workforce.

4. You’ve uncovered new lifestyle goals. 

When you’re 20 or 15 years removed from it, retirement is still an abstract concept. It’s easy to understand the budget you’ll need for basic living expenses, but much harder to predict what a satisfying lifestyle will look like… and cost. You might plan for the usual annual trips or long-time hobbies (golf, boating), but new priorities often creep into view.

Approaching their mid-sixties, many individuals discover why the snowbird lifestyle is so appealing. Many find themselves wanting to be a part of their grandchildren’s daily lives, which could mean owning a condo in a different city. Some may be called to pursue their passion project: a neighborhood bakery or a charitable foundation. As these dreams emerge, it’s important to revisit your retirement plan along with your financial advisor. Having helped others achieve similar goals, he or she can advise you on what you’ll need and how to get there.

Ready to gauge how effective your retirement plan is? Download our latest resource to identify strengths, weaknesses, opportunities and threats.

The information provided above is general in nature and is not intended to represent specific investment or professional advice.  Views expressed are those of the author and not necessarily those of GW & Wade.  GW & Wade does not assume any duty to update any of the information. No client or prospective client should assume that the above information serves as the receipt of, or a substitute for, personalized individual advice from GW & Wade, LLC, which can only be provided through a formal advisory relationship.   

Clients of the firm who have specific questions should contact their GW & Wade Counselor. All other inquiries, including a potential advisory relationship with GW & Wade, should be directed to:

Laurie W. Gerber, Client Development
GW & Wade, LLC






Retirement Life Events

Laurie Wexler Gerber, MBA

Director of Marketing


Tax Considerations For An Equity Exit

Register Now
David Brodsky
Kelli Adams