Staley establishes a series of interim financial goals by age. “This means a 25-year-old employee client will set a reasonable savings goal of maxing out their 401(k) matching feature for the next five years until their 30th birthday,” said Staley, who works with Schneider Downs Wealth Management Advisors. “We then set a new five-year savings goal and revisit it on their 35th birthday.”
For clients over 40 years old who are cash strapped from educating their college-aged children while also providing elder care for aging parents, Staley recommends investing money from 50 to 55 years old in hybrid long-term-care insurance policies that also provide a cash value life insurance rider.
“It’s a popular way to save money for retirement and provide yourself with coverage for long-term-care expenses in the future because the life insurance rider acts as a savings account in the event living in a care facility isn’t required,” Staley said.
Product options that Staley favors include Lincoln MoneyGuard II and Nationwide YourLife CareMatters.
Kansas CFP Melissa Ellis keeps her clients on a retirement savings track by focusing on creating cash flow in five-year intervals.
“Saving for retirement is a mental mindset that can deprive clients of a new pair of shoes or vacation, but I find that a cash-flow approach helps people to attain both saving and splurging,” said Ellis, who creates cash-flow reports that show monthly expenditures and details such as when money is withdrawn to pay bills during the course of 30 days.
Ellen Siegel borrows her savings strategy of creating virtual buckets from Raymond Lucia who wrote The Buckets of Money Retirement Solution.
“We set up 12 to 24 months of cash or really liquid, low volatility instruments, then another bucket to kick in at the nth month to address the next three to five years, then another bucket or two depending on age, health or risk tolerance for the long term of seven to 10 years,” said Siegel, who is a CFP licensee with Legacy Wealth Management in Miami.