Retirement Special: Planning for the New Old
Samantha Allen recently wrote an article with financial-planning.com that focused on the key questions and assumptions to consider when planning for retirement. She enlisted Dave’s advice among the group of planners featured in the article. Dave’s contributions are featured below or you can read the article in its entirety.
WHAT IS ENOUGH?
Some planners also argue that longevity fears are overblown, because minor adjustments to life expectancy wind up having relatively minimal impact on a spending or investing plan. “Once you are planning beyond 30 years, you don’t gain that much by shortening” the time horizon, says David Yeske, managing director of Yeske Buie, with offices in San Francisco and Vienna, Va.
Similarly, he adds, a fairly conservative estimate means that clients will still be safe with even longer life spans: “Once you plan for your money to last for 30 years, it’s likely going to last a lot longer.”
AVERAGE WITH PADDING
Yeske points out that the only way to have a high probability of success is to follow a plan that likely ensures you die with a lot of money — but for most clients, that’s not really a negative outcome.
Investors often have other goals, whether it is to live comfortably or leave money to their children or a charity, Yeske explains: “The ‘conservative’ path means they have enough money for their other goals.”
ASK HARD QUESTIONS
Yeske contends that one of the most important question advisors can ask is this: Are you a smoker? Because smoking can dramatically reduce one’s life expectancy, “it would be disingenuous” to put their life span assumption at age 100 and force them to spend accordingly, he adds.