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Want to retire a millionaire? These 7 financial experts gave us their best retirement-planning advice

As part of our annual snapshot of the region’s top financial professionals, we received retirement wisdom from local experts.

men with coins cartoon drawing
© Feodora / stock.adobe.com

The Northern Virginia region is one of the wealthiest in the United States. That’s not lip service. It’s backed up by data. According to the most recent census, counties in Northern Virginia accounted for five of the top 10 highest median income households in the nation (including Loudoun County at No. 1 and Fairfax County at No. 2). And yet, saving for retirement remains a mystery and struggle for many. A recent study by Northwestern Mutual found that one in three Americans have less than $5,000 saved up for retirement, and 21% have no savings dedicated to retirement living. While not everybody is in that dire boat, most could benefit from a serious sit-down with a financial professional.

As part of our annual snapshot of the region’s Top Financial Planners, we talked to five of NoVA’s best and asked them to give us their advice on making sure money isn’t a worry when you finally leave the daily office grind behind. Read on for their retirement wisdom.

See our list of top financial professionals in NoVA here.

stephen cassaday
Stephan Q. Cassaday (Photo courtesy of self)

Stephan Q. Cassaday, CFP®, CFS: Chairman & CEO

Cassady & Company, Inc., McLean

How do I determine how much money I’ll actually need in retirement? In this region, is $1 million too much? Not enough?
It is an individual decision based on a number of factors.  The most important of these is your budget.  How much do you need coming in from all sources, after tax, spendable, to do the things you will want to do? Subtract this pretax amount from your guaranteed income sources, such as pensions and social security, to determine your required portfolio withdrawals. It is an algebraic formula with the variables being required income, available assets and life expectancy. You should assume you will live to 100.

I have a 401(k). How do I determine the best asset allocation?
Aggressive with more stocks is better.  It is a myth that allocation should change as we approach retirement. The risk that most of us face is insufficient returns coupled with a long life, so higher returns than those available from traditional retiree portfolios are necessary.

What is an annuity and is it true you can live off that interest alone in retirement? 
An annuity is a group of investment choices wrapped with the guarantees and tax advantages of an insurance policy.  The guarantees (e.g. income for life) come at a cost that must be considered and in some cases are prohibitive.  We only recommend them in very specific circumstances.

What should be on my financial checklist as I’m prepping for retirement?
The most important thing is what you are going to do every day when the alarm goes off and you aren’t going to work.  This requires intense planning and is more challenging than the arithmetic.  Most people flunk retirement because they ignore this important step.  Find out what brings you joy and set up a plan to do those things.

Is paying off my mortgage an important goal before retirement?
There is an unimpeachable mathematical argument for having a large long-term mortgage.  Paying off mortgages is generally a bad idea.  You are taking money from a pool of assets that will very likely earn more than the cost of the mortgage and thereby losing money.

christin boggs peyper
Angela Bender (Photo by Christin Boggs Peyper)

Angela Bender, CFP®: CEO and Managing Partner

AMJ Financial Wealth Management, Leesburg

How should health care factor into my retirement savings as I get older?
You need to really understand the costs, and what you want your plan to look like in case of illness or disability. Are you single? Are you married? How is your health today and what is your family history? You need to plan for the everyday health expenses, with an eye toward how much health care costs are increasing, and what more catastrophic care expenses could be. Studies show that on average a 65-year-old needs $285,000 currently to just pay for health care premiums—no long-term care, just average annual health care needs.

Is paying off my mortgage an important goal before retirement?
For some it is vital, as they don’t have the savings to support the house expense in their everyday retirement budget, but for others it may not matter at all. Home equity can be an important part of an overall retirement plan. That is why financial planning is so important. It can help you define where and how you should allocate your money—
today and in the future.

How do I determine how much money I’ll actually need in retirement? In this region, is $1 million too much? Not enough?
How much money people need in retirement is not a single magic number. Individuals have different lifestyle factors that drive how much money they must save to be able to retire with confidence. How old are they, what sources of income they have, how is their health, how many people are in the household and what spending they anticipate. That is the beauty of financial planning and using goals to drive your outcome. You have a concrete understanding of where and how to save to meet your specific number to be able to retire with confidence that you won’t outlive your money.

How can I minimize tax obligation, especially in retirement?
Tax planning is a vital part of your financial plan at all stages of your life. During retirement, we want to make your taxes as stable as possible. To do that you need to get prepared early! You must consider how much income you need, what the income limits are to avoid higher Medicare premiums, and for social security taxation. Then we build an income plan with appropriate distributions from multiple kinds of tax money—some that is not taxed, some that has a little tax and, if necessary, some that is fully taxable.

What should be on my financial checklist as I’m prepping for retirement?
Really consider what you want for your lifestyle. If you want to travel the world, price out what that type of trip looks like, then how many of those per year would you want to take. Do a good inventory of your everyday essential living expenses. How much is the insurance premium for your home or car? Know all your latest sources of income and make sure your Social Security earnings look right. What benefits do you have at work that you may be eligible to keep? Do you need to do that? Make sure you don’t ignore disability in retirement. That is going to be a huge issue as we age. Do you have the right estate planning documents, and do you have a plan for if there is a disability?

gregory s. smith
Gregory S. Smith (Photo courtesy of self)

Gregory S. Smith, CFP®, ChFC®, CPWA®, CTFA: Managing Director, Senior Financial Planner

The Wise Investor Group, Reston

What is an annuity and is it true you can live off that interest alone in retirement? 
Some people can, if they plan properly and that’s not their only income source.  If it is indeed an annuity, where you get a fixed monthly payment for the rest of your life, consider whether or not that fixed payment will be sufficient for you in future years when the costs of milk, eggs, utilities and other expenses have grown, due to inflation.  What it costs today for a gallon of milk is a lot more than what it cost 20 years ago. I do like the idea of multiple income sources, but annuities by themselves will likely not be sufficient.

What investment benchmarks are you using? How do you determine if the strategy you’re using is successful?
The investment benchmarks we use are 1. Can you sleep at night? and 2. Your financial planning risk requirement. If our financial plan says you need to be positioned for a 6% return, and if we can get half of that in bonds, that tells us that the majority of one’s account might need to be more equity-oriented.  In my opinion, your benchmark should be future-oriented and based on what it is you need to accomplish, rather than comparing your returns to an actual index.  Yes, it would be nice to meet or beat an index return, but I’m not convinced the risk and volatility associated with indexes from time to time are palatable to many investors.

How do I determine how much money I’ll actually need in retirement? In this region, is $1 million too much? Not enough?
How much money you’ll need in retirement is a function of many elements: The inflation rate you’ll withstand between now and all the way through your retirement, the rate of return you’ll receive on your investments along the way, the various tax treatments of your accounts (depending on if they’re post-tax/taxable, tax deferred, such as Traditional IRAs, or tax-free accounts, such as Roths), whether or not you’ll be receiving pensions, how much you spend and how much of the financial risks you’re offloading to insurance companies through the use of purchasing insurance policies.  Clearly, there is no set number for everyone and in the Northern Virginia/Metropolitan Washington, DC region, money seems to find a home quickly and easily.  How much money you’ll need in retirement is solveable through working with a qualified Certified Financial Planner.  Identifying your “number” is one of the byproducts of an effective, well thought out plan.

I have a 401(k). How do I determine the best asset allocation?
Be familiar with your sleep-at-night allocation.  It’s the level of risk that strikes the balance between allowing you to sleep at night, even when the markets turn volatile and scary, and by the same token also allows you to sleep at night to where you don’t feel as though you’re missing out on potential growth, all at the same time.  There indeed is a balance and only you know your own comfort levels.  You might wish to check your asset allocation out with a professional to make sure you’re taking on the right level of risk to position you for what you’re after … Remember that you’re not only investing to your retirement, you’re needing to invest all the way through it.  Chances are, you’ll want to take less risk and subject your account to less volatility as you get closer to your retirement, but you’ll likely always need an element of growth in there.

What should be on my financial checklist as I’m prepping for retirement?
• What accounts you have, and whether they’re taxable, tax-deferred or tax free
• How much you’re saving into each account between now and retirement
• How much your natural pace and rhythm of spending is per month or per year
• Making sure you have an emergency supply of cash
• Your readiness to invest not only to your retirement, but all the way through it
• All of your insurance policies: auto, home, umbrella, health, long-term care and life insurance policies will also need to be assessed and analyzed

Wells fargo advisors
From left: Ryan C. Sprowls, Michael Romano and Frank Key. (Photo courtesy of Alexandria Wealth Management Group of Wells Fargo Advisors)

Ryan C. Sprowls, CFP®: Managing Director – Investments; Michael
Romano, MBA: Vice President – Investments; Frank Key, CFP®, CPWA®
Senior Vice President – Investments

Alexandria Wealth Management Group of Wells Fargo Advisors, Alexandria 

What should be on my financial checklist as I’m prepping for retirement?
Frank Key: We believe, first and most importantly, clients need a budget or retirement-needs worksheet. Also on the checklist should be a thorough inventory of all assets and liabilities along with a review of essential legal documents, such as a power of attorney, medical directive and will to ensure they are up to date.

What is an annuity and is it true you can live off that interest alone in retirement? 
Frank Key: An annuity is simply a stream of income paid to someone for the rest of their life, typically from an insurance company. When we talk about annuities as financial products, there are many types but the more popular ones are either immediate or deferred. Most people find that they cannot live simply off of interest earned in retirement and that they must plan for a gradual spend down of some of their assets as well.

What investment benchmarks are you using? How do you determine if the strategy you’re using is successful?
Michael Romano: Each account is gauged against the most appropriate asset allocation blended benchmark. However, we go one step further, using propriety software, to show if a client’s entire portfolio is on pace to accomplish whatever goals they have set for themselves. This method allows the client to see through market volatility and focus on the long term perspective.

I have a 401(k). How do I determine the best asset allocation?
Ryan Sprowls: You should start by reviewing the resources from the 401(k) plan provider. Next, complete a risk profile assessment to help you determine which risk adjusted asset allocation model is best for you. Remember to periodically review your asset allocation as your risk tolerance may change over time.

Paying for my kids’ college or saving for retirement—how do I balance these two savings goals?
Michael Romano: We think many parents feel it is their responsibility to provide an education for their children, but this may clash with their need to save for retirement. While each situation is unique, we generally recommend clients create a formal plan to save for their basic retirement needs first, and then allocate savings for college if they are able to, second. There are many loan options for higher education out there, but as the old saying goes, “you can’t borrow for retirement.”

tracy baker
Tracey A. Baker (Photo courtesy of self)

Tracey A. Baker, CFP®: President and Co-Owner, Financial Adviser

CJM Wealth Advisers, Ltd., Fairfax

Paying for my kids’ college or saving for retirement—how do I balance these two savings goals?
This is a very common dilemma, although most of our clients focus on both goals … The truth is that you can borrow for future college expenses, not for retirement. There are also many college options for your future scholar, including community colleges, dual enrollment, AP classes, work-study and a wide variety of traditional degree programs.

How do I determine how much money I’ll actually need in retirement? In this region, is $1 million too much? Not enough?
The truth is there is not one magic number that works for everyone planning for retirement. For example, where do you plan to live? Do you plan to travel? Will you have outside sources of income besides Social Security? The only way to know if you are on track for retirement is to sit down with a CFP certificant who is qualified to run some projections based on what retirement may look like for you specifically.

What should be on my financial checklist as I’m prepping for retirement?
As you look ahead toward retirement, you should become aware of what funds are going to be available to you down the road, get your Social Security and any pension statements and become more familiar with your investment portfolio and any imbedded risk. Track your spending and get a good, realistic idea of your future cash flow needs. This is often one of the most difficult steps in planning for retirement.

This post was originally published in our September 2019 issue. For more content, subscribe to our monthly print magazine and weekly e-newsletters.

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