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Financial Considerations For Empty Nesters

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When children move out of the house, it can mark a major transition for many families. Along with lifestyle changes, this stage of life may also bring shifts in financial priorities, household expenses, and long-term planning considerations.

For some households, becoming an empty nester creates additional financial flexibility. For others, it may highlight new decisions around retirement planning, supporting adult children, housing needs, or future financial goals.

Because every family situation is different, this stage often becomes a time to revisit how current financial decisions align with both short-term needs and long-term priorities.

Reevaluating Household Expenses

One of the more immediate changes for many empty nesters is a shift in monthly expenses.

Costs related to groceries, utilities, transportation, activities, and day-to-day household spending may change once children leave home. In some cases, families may also see a reduction in education-related expenses or other ongoing financial commitments.

Reviewing current spending habits can help provide a clearer picture of:

  • Monthly cash flow
  • Savings opportunities
  • Debt repayment priorities
  • Retirement contributions
  • Future financial goals

For some households, this stage may create more room to redirect funds toward retirement savings, travel, future healthcare planning, or other priorities.

Revisiting Retirement Planning

As children become financially independent, some individuals begin focusing more closely on their own retirement timeline and long-term financial plans.

This may include reviewing:

  • Retirement account contributions
  • Investment allocations
  • Income needs in retirement
  • Healthcare planning
  • Social Security timing considerations
  • Long-term spending goals

A change in household responsibilities may also create an opportunity to evaluate whether current retirement goals and timelines still align with overall financial priorities.

Considering Downsizing Or Housing Changes

For some empty nesters, housing needs may begin to shift once children move out.

While some families choose to remain in their current home long-term, others may begin considering:

  • Downsizing
  • Relocating
  • Reducing maintenance responsibilities
  • Moving closer to family
  • Purchasing a second home
  • Preparing for retirement living arrangements

Housing decisions often involve both financial and lifestyle considerations, making it important to evaluate how these choices fit into broader long-term plans.

Supporting Adult Children

Even after children become independent, financial support may still remain part of the conversation for many families.

This can include:

  • Assistance with student loans
  • Helping with housing costs
  • Wedding expenses
  • Career transitions
  • Grandchildren-related expenses
  • Emergency financial support

For some parents, balancing support for adult children while continuing to prioritize retirement goals may become an important planning consideration.

Shifting Financial Priorities

Becoming an empty nester can also create space to revisit broader financial goals and personal priorities.

Some individuals may focus more heavily on:

  • Retirement preparation
  • Travel or lifestyle goals
  • Estate and legacy planning
  • Charitable giving
  • Long-term healthcare planning
  • Building additional savings

Financial priorities often evolve during different stages of life, and this transition may provide an opportunity to reassess how financial decisions support both current and future goals.

Planning For The Next Stage

While becoming an empty nester can bring significant changes, it may also create an opportunity to revisit financial plans with a different perspective.

Reviewing spending habits, retirement goals, housing considerations, and long-term priorities can help individuals better understand how this next stage fits into their overall financial picture.

Contact Advisors Management Group

If you would like to discuss your financial goals or have questions about your current strategy, please contact us.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin. Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security. Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses. Please do not send orders via e-mail as they are not binding and cannot be acted upon. Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation. This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services. Any subsequent, direct communication by AMG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

Elderly couple reviewing paperwork at kitchen table.

Planning For Healthcare Costs In Retirement

Healthcare expenses are often an important part of retirement planning. While many individuals spend years preparing for retirement income and lifestyle goals, medical and healthcare-related costs can sometimes be overlooked when building a long-term financial plan.

Healthcare needs and expenses often change over time, making it important to consider how medical costs may fit into an overall retirement budget. This can include everything from Medicare premiums and prescription costs to long-term care considerations and unexpected medical expenses.

Because every situation is different, healthcare planning in retirement is often less about predicting exact costs and more about preparing for a range of possibilities over time.

Understanding Healthcare Costs in Retirement

Healthcare expenses in retirement can come from a variety of sources, including:

  • Medicare premiums
  • Supplemental insurance coverage
  • Prescription medications
  • Deductibles and copays
  • Dental and vision care
  • Long-term care expenses
  • Out-of-pocket medical costs

For many retirees, healthcare costs may become a larger part of monthly spending as they age. Reviewing these potential expenses ahead of time can help individuals better understand how healthcare may impact long-term financial goals and retirement income needs.

Planning For Medicare

Medicare is often a key part of retirement healthcare planning, but understanding coverage options and enrollment timing can sometimes feel complicated.

Individuals approaching retirement may need to consider:

  • When Medicare eligibility begins
  • Enrollment deadlines
  • Differences between Medicare coverage options
  • Supplemental insurance needs
  • Prescription drug coverage
  • Potential penalties for delayed enrollment

Because healthcare needs vary from person to person, Medicare-related decisions are often based on individual circumstances, retirement timing, and expected healthcare usage.

Budgeting for Prescription and Medical Expenses

Prescription medications and recurring medical costs may also become an ongoing part of retirement budgeting.

Even with insurance coverage, retirees may still face:

  • Monthly prescription costs
  • Copays and deductibles
  • Specialist visits
  • Routine medical appointments
  • Medical equipment expenses

Reviewing these expenses as part of a broader retirement plan may help individuals better understand how healthcare costs fit alongside housing, travel, lifestyle spending, and other financial priorities.

Considering Long-Term Care Planning

Long-term care is another area that may become part of retirement planning discussions.

While not everyone will require long-term care services, some individuals may eventually need assistance with:

  • In-home care
  • Assisted living
  • Skilled nursing care
  • Memory care services

Long-term care planning often involves evaluating how these potential expenses could affect retirement savings, family responsibilities, and overall financial goals.

For some individuals, this may include reviewing insurance options or discussing how future care needs could fit into a broader financial plan.

Healthcare Costs and Retirement Income

Healthcare expenses can also influence how retirement income is used over time.

As retirement progresses, individuals may need to balance healthcare-related costs alongside:

  • Daily living expenses
  • Travel and lifestyle goals
  • Housing costs
  • Family support
  • Charitable giving
  • Estate planning priorities

Because healthcare costs may change over time, reviewing retirement income strategies periodically can help individuals better understand how these expenses may fit within their broader financial picture.

Planning Ahead for the Future

Retirement planning often involves preparing for both expected and unexpected expenses. Healthcare costs are one of several factors that may evolve over time and influence financial decisions throughout retirement.

Taking time to review healthcare-related financial considerations before retirement may help individuals feel more informed as they prepare for future medical expenses, insurance decisions, and long-term planning priorities.

Contact Advisors Management Group

If you would like to discuss your financial goals or have questions about your current strategy, please contact us.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin. Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security. Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses. Please do not send orders via e-mail as they are not binding and cannot be acted upon. Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation. This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services. Any subsequent, direct communication by AMG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

Elderly couple with their arms around each other walking on the beach.

Summer Vacation Planning For Retirees

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For many retirees, travel becomes a more flexible part of how they choose to spend their time. Summer can bring a mix of longer stays, more frequent trips, and time spent visiting family, often with fewer constraints around timing or duration than in earlier stages of life.

While the ability to travel may increase in retirement, how those decisions are made can look different than they did before. Without the structure of a work schedule, timing, frequency, and length of trips may become more personal and less dictated by external factors.

Travel Looks Different In Retirement

Before retirement, travel is often planned around limited vacation time. Trips may be shorter, scheduled well in advance, and built around fixed calendars.

In retirement, that structure often changes.

Travel may become more spread out over the year, or in some cases, more concentrated during certain seasons. Some retirees may choose longer stays, while others prefer shorter, more frequent trips. Visiting family may also become a more central part of travel plans.

The shift is not necessarily about traveling more, but about having more flexibility in how and when travel takes place.

Timing And Flexibility

One of the more noticeable changes in retirement is the ability to travel at different times.

Summer may still be a popular season, especially when coordinating with children and grandchildren. At the same time, retirees may also have the flexibility to travel outside of peak times, depending on their preferences.

This added flexibility can influence how trips are planned, how long they last, and how they fit alongside other priorities throughout the year.

Travel As Part Of An Ongoing Plan

In retirement, travel is often one of several ways people choose to spend their time and resources.

Larger trips, seasonal travel, and time spent with family can all play a role. Rather than being a one-time decision, these choices often unfold over time and alongside other priorities.

For many retirees, travel becomes less about a single event and more about how it fits into the rhythm of the year.

Balancing Travel With Other Priorities

Even for retirees with established financial plans, travel decisions still exist alongside other considerations.

These may include ongoing living expenses, healthcare, family support, and long-term goals. Travel does not replace these priorities, but instead becomes one part of how time and resources are used.

Because of this, travel decisions may look different from year to year, depending on circumstances, preferences, and timing.

A Different Way Of Thinking About Time

One of the more significant changes in retirement is how time is viewed.

Without a fixed work schedule, decisions around travel often become less about fitting into a limited window and more about how time is chosen to be spent. This can influence not only where and when retirees travel, but how frequently and for how long.

For many, this shift allows travel to feel less rushed and more integrated into everyday life.

Planning For The Long-Term

Financial planning in retirement often involves adapting to changes in lifestyle, priorities, and how time is spent. Travel is one of the areas where those changes are often most visible.

For many retirees, this stage can be a time to consider how travel plans align with long-term goals, alongside other ongoing priorities.

At Advisors Management Group, financial planning is centered around helping clients navigate these types of decisions with a clear understanding of how each stage of retirement fits within their overall plan and family goals.

Contact Advisors Management Group

If you would like to discuss your financial goals or have questions about your current strategy, please contact us.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin. Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security. Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses. Please do not send orders via e-mail as they are not binding and cannot be acted upon. Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation. This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services. Any subsequent, direct communication by AMG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

A family sitting on an outdoor patio with grandparents, parents, and grandchildren, laughing.

Keeping A Long-Term Perspective During Periods Of Economic Change

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Periods of economic change often bring increased attention to market activity, interest rates, inflation, and other financial headlines. These developments can shift quickly, and the volume of information can make it difficult to separate short-term movement from longer-term trends.

The important thing to keep in mind is that these periods are less about reacting to a single event and more about understanding how changing conditions may influence decisions over time.

When Headlines Become More Noticeable

Economic changes tend to become more visible through everyday experiences. Interest rates may affect borrowing costs. Inflation may show up in day-to-day expenses. Market activity may be reflected in account values.

At the same time, financial headlines often focus on what is happening now. While this information can be useful, it is not always presented in the context of longer-term planning.

As a result, short-term developments can sometimes feel more significant than they are, leading to reactions that may not align with longer-term goals.

Short-Term Movement Versus Long-Term Direction

One of the challenges during periods of economic change is distinguishing between temporary, short-term market shifts and maintaining a well-managed long-term financial strategy.

Markets, interest rates, and economic conditions naturally move over time. Some changes are temporary, while others may last longer. Not all developments require the same level of attention or response.

Individuals with an established financial plan recognize these periods serve as a reminder to maintain a long-term mindset and ensure their financial plan is structured to account for change, rather than react to sensationalized financial headlines.

How Economic Conditions Show Up In Daily Decisions

Economic shifts do not only exist in headlines. They can also influence everyday buying decisions. This may include decisions around spending, saving, investing, or timing of larger purchases. Periods of economic uncertainty serve as opportunities to reevaluate spending decisions.

Staying Grounded In An Established Plan

For those who have spent years building and maintaining a financial nest egg, periods of economic change can feel more significant. Maintaining a long-term perspective does not require ignoring current events. It involves recognizing where those events fit within a larger timeline. For many individuals and families, this comes down to balancing awareness of current conditions with an understanding of long-term direction.

A Reminder Of What Planning Is Designed To Do

Financial planning is not built around a single set of conditions. It is designed to account for different environments over time. Periods of economic change can serve as a point where individuals and families revisit how their plan is intended to function through different market and economic cycles.

At Advisors Management Group, financial planning is centered around helping clients navigate periods of change with a focus on long-term priorities, while keeping short-term developments in perspective.

Contact Advisors Management Group

If you would like to discuss your financial goals or have questions about your current strategy, please contact us.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin. Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security. Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses. Please do not send orders via e-mail as they are not binding and cannot be acted upon. Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation. This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services. Any subsequent, direct communication by AMG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

A family consisting of a mother, father, and three daughters smile. One of the daughters is wearing a graduation cap and gown.

Planning For A Child’s Financial Future After Graduation

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Graduation season often marks a transition for both students and their families. Whether a student is finishing high school or college, this stage can bring financial decisions into clearer focus, particularly around education, income, and future responsibility.

For many families, these moments are expected. What changes is how financial responsibilities begin to shift and how an existing plan starts to be carried out in real time.

Different Paths After High School And College

For many high school graduates, the focus often turns toward education-related decisions. This may include understanding how college or other programs will be funded, how living expenses may be handled, and how financial responsibilities may be shared between parents and their now adult children.

For college graduates, the transition can look different. Moving into the workforce may bring changes related to income, living arrangements, and day-to-day financial responsibilities. It can also mark the beginning of new considerations around saving, paying off student loans, future housing plans, and longer-term financial priorities, such as marriage, children, and retirement.

While high school and college graduates have different financial priorities, both mark a point where long-term decisions begin to play out, rather than remain on paper.

Changing Financial Roles Within The Family

Graduation can also change how financial roles are defined within a family.

For some families, this may involve a gradual transition of responsibility from parent to child. For others, it may include continued support while a student completes additional education or establishes a career.

There isn’t a single timeline for this. Each family approaches it differently based on their own circumstances and financial priorities.

Income, Expenses, And Early Career Decisions

As children move into the next stage of life, new patterns of income and expenses may arise.

For high school graduates, this may include entering the workforce, trade programs, military service, or continuing education. Each path can bring different types of income, expenses, and financial responsibilities, often for the first time.

For college graduates entering the workforce, this may include adjusting to a regular income, navigating increased living expenses, and managing existing financial obligations such as student loans or car payments. It can also introduce early decisions around how income is allocated across different priorities, including employer-sponsored retirement plans and individual savings or investment strategies.

For families, these transitions may influence how financial support is provided, and how planning priorities and financial education continue to evolve.

Education Costs And Long-Term Planning

For families with students continuing their education, the financial impact may extend over several years.

Education-related expenses, whether planned in advance or addressed as they arise, can play a role in shaping a family’s overall financial strategy. These considerations often connect to other priorities, including saving, investing, and long-term planning decisions.

A Period Of Transition And Perspective

Graduation represents more than just a transition from high school or college. It can also be a point where financial responsibilities and knowledge begin to shift between generations.

During this time, families may review their existing financial plan and talk with their graduate about financial considerations for the future. Major life changes such as graduation can also provide an opportunity to introduce the topic of financial literacy to the next generation.

Planning For The Long-Term

Financial planning often involves adapting to different stages of life. Transitions such as graduation can highlight how plans evolve as circumstances change.

For many families, this period can be a time to consider how education costs, early career decisions, and shifting responsibilities align with long-term goals, while also introducing the next generation to financial literacy.

At Advisors Management Group, financial planning is centered around helping clients navigate these types of transitions with a clear understanding of how each stage fits within their overall plan and family goals.

Contact Advisors Management Group

If you would like to discuss your financial goals or have questions about your current strategy, please contact us.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin. Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security. Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses. Please do not send orders via e-mail as they are not binding and cannot be acted upon. Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation. This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services. Any subsequent, direct communication by AMG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

Nathan Deets, Certified Financial Planner (CFP), at Advisors Management Group, smiling while sharing paperwork with clients.

Life Changes That May Call For An Updated Financial Plan

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Life rarely stays the same for long. Over time, careers evolve, families grow or change, and priorities shift in ways that may not always be immediately reflected in a financial plan. While financial planning is often thought of as a long-term process, certain life events can naturally prompt a closer look at how everything is structured. Periods of transition can offer a valuable opportunity to step back, review your current financial picture, and consider whether your plan still aligns with your goals and circumstances today.

Financial Planning Is Not Static

A financial plan is often built around a snapshot in time. It reflects your income, responsibilities, goals, and resources at that moment. As life moves forward, those elements may change gradually or all at once. Because of this, financial planning is not a one-time event. It is an ongoing process that may benefit from periodic review, especially during times of change. Even small shifts can influence how different pieces of a financial plan work together. Recognizing when to revisit your plan can help ensure that it continues to reflect your current situation.

Career Changes and Income Shifts

Changes in employment are one of the more common reasons individuals revisit their financial plans. A new job, promotion, career change, or transition to self-employment can affect income, benefits, and overall financial structure. These changes may also influence retirement plan options, healthcare coverage, and savings patterns.
During these transitions, individuals often take time to review:
  • Changes in income and how they affect cash flow
  • Differences in employer-sponsored benefits
  • Retirement plan availability and contribution activity
  • Adjustments in short-term and long-term financial priorities
These moments can provide a clearer understanding of how income and benefits connect to broader financial goals.

Approaching Retirement

As retirement becomes more immediate, many individuals begin to take a closer look at their financial plans. This stage often involves shifting from accumulating savings to considering how those savings may support future income needs. It may also include reviewing timelines, expected expenses, and lifestyle preferences.
Common areas of reflection during this phase include:
  • Anticipated retirement timing
  • Current savings and account structures
  • Income sources during retirement years
  • Healthcare considerations
Rather than focusing on specific actions, this type of review helps individuals understand how their current plan aligns with their expectations for retirement.

Business Ownership and Changes

For business owners, financial planning can be closely tied to the structure and performance of the business itself. Changes such as starting a business, expanding operations, bringing on partners, or preparing for a transition can influence both personal and business-related finances. These developments may also affect income variability, tax considerations, and long-term planning.
During these times, individuals may choose to review:
  • The relationship between personal and business finances
  • Cash flow patterns and financial stability
  • Long-term plans related to business ownership
  • Potential transitions, such as succession or sale
These reviews can help ensure that financial planning reflects both personal goals and business realities.

Divorce Or Separation

Significant personal changes, such as divorce or separation, often lead to a reevaluation of financial priorities. These transitions can affect income, expenses, asset ownership, and long-term planning considerations. They may also prompt individuals to revisit documentation and account structures.
During this period, individuals sometimes take time to review:
  • Changes in income and household expenses
  • Ownership and division of assets
  • Beneficiary designations and account information
  • Short-term and long-term financial priorities
This process can help individuals better understand their financial position as they move forward.

Family Changes and Responsibilities

Family dynamics can shift over time in ways that influence financial planning. Events such as marriage, the arrival of children, supporting aging parents, or changes in household structure can all play a role in shaping financial priorities. These changes may affect budgeting, savings goals, and long-term planning considerations.
Some individuals choose to reflect on:
  • Adjustments in household expenses
  • Savings goals related to education or family needs
  • Changes in insurance coverage
  • Estate planning considerations
These types of reviews help ensure that financial plans continue to reflect the needs of those who depend on them.

Relocation or Lifestyle Changes

Moving to a new location or making a significant lifestyle change can also prompt a review of financial plans. Changes in cost of living, housing expenses, and local tax considerations may all influence how a financial plan is structured. Even smaller lifestyle adjustments can have an impact over time.
During these transitions, individuals may consider:
  • Differences in housing and living expenses
  • Changes in income or commuting costs
  • Adjustments in savings or spending patterns
  • Long-term goals related to lifestyle preferences
Understanding how these factors fit together can provide clarity as individuals adapt to new circumstances.

Why These Moments Matter

Life transitions often bring both challenges and opportunities. While some changes are planned, others may happen unexpectedly. In either case, these moments can create space for reflection. Reviewing a financial plan during a period of change does not necessarily mean making immediate adjustments. Instead, it allows individuals to evaluate whether their current approach continues to align with their evolving goals. By taking time to review financial information, priorities, and documentation, individuals can gain a clearer understanding of where they stand and how their plan supports their direction moving forward.

Keeping Financial Planning Aligned With Life

Financial planning works best when it reflects real life, not just a fixed set of assumptions. As circumstances change, revisiting your financial plan can help ensure that it continues to align with your current needs and long-term objectives. Even if no changes are made, the process of reviewing can provide valuable perspective. At Advisors Management Group, financial planning is viewed as an ongoing conversation. Life events often serve as natural points to revisit that conversation, helping ensure that each plan remains aligned with the individual circumstances and priorities of the people it is designed to support. If you are experiencing a life transition or simply want to revisit your financial plan, connecting with a financial professional can help provide a structured approach to reviewing your current situation and understanding how it fits into your broader financial picture.

Contact Advisors Management Group

If you would like to discuss your financial goals or have questions about your current strategy, please contact us. Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin. Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security. Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses. Please do not send orders via e-mail as they are not binding and cannot be acted upon. Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation. This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services. Any subsequent, direct communication by AMG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.
An elderly couple sitting at a table reviewing paperwork documents.

Understanding Common Retirement Planning Misconceptions

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Retirement planning is often discussed in broad terms, but many assumptions about it are shaped by incomplete information or generalizations. These misconceptions can influence how individuals think about saving, timing, and long-term financial needs.

Taking time to understand some of the more common misunderstandings can help bring clarity to the planning process. Rather than focusing on specific actions, it can be helpful to look at how different factors interact over time and how expectations compare to reality.

When Do Most People Start Saving?

One common assumption is that retirement planning begins at a certain age, often later in one’s career. In reality, individuals approach retirement planning at many different stages of life, depending on their circumstances, priorities, and financial situation.

Some may begin saving early, while others may focus more on retirement planning as their careers progress. Factors such as student loans, housing costs, or career changes can influence when and how individuals begin to prioritize long-term savings.

There is no single timeline that applies to everyone. Instead, retirement planning tends to reflect a combination of personal goals, financial resources, and life experiences. Understanding this can help shift the focus away from comparison and toward individual progress over time.

How Long Retirement May Last

Another area where misconceptions often arise is the length of retirement.

It is sometimes assumed that retirement will last for a relatively short period. However, increasing life expectancy has changed that perspective. Many individuals may spend several decades in retirement, depending on when they retire and their overall health.

This extended timeframe introduces additional considerations. Planning for a longer retirement may involve thinking about how financial resources are used over time and how different sources of income interact throughout those years.

Because longevity varies from person to person, estimating the length of retirement is not an exact calculation. Instead, it is one of several factors that can influence how individuals think about their financial plans.

Understanding Income Sources in Retirement

Another misconception is that retirement income comes from a single source.

In practice, retirement income is often made up of several components. These may include Social Security, employer-sponsored retirement plans, personal savings, or other financial resources. Each source may play a different role depending on the individual’s situation.

Relying on one source alone is not always how retirement income is structured. Instead, these elements often work together to support financial needs over time. Understanding how different income sources interact can provide a more complete view of retirement planning.

This perspective also highlights that retirement planning is not just about accumulation. It also involves understanding how resources may be used and coordinated throughout retirement.

The Role of Inflation Over Time

Inflation is another factor that is sometimes underestimated in retirement planning.

While inflation may seem gradual in the short term, its long-term impact can influence purchasing power over time. This can affect everyday expenses such as housing, healthcare, and general living costs.

Surveys have shown that many individuals view inflation as a significant concern in retirement, as rising costs can influence how far savings may go over time.

Because retirement can span many years, even modest changes in inflation may have a cumulative effect. Recognizing this can help provide context when reviewing long-term financial plans.

Assumptions About Spending in Retirement

Another commonly held belief is that spending decreases significantly in retirement.

While some expenses may change, overall spending patterns can vary widely. For example, work-related costs may decline, while other areas such as healthcare, travel, or leisure activities may increase.

Research indicates that many retirees report higher-than-expected expenses, suggesting that spending in retirement does not always follow a predictable pattern.

Because of this, retirement planning often involves looking at a range of potential expenses rather than assuming a single pattern. This approach can provide a more balanced view of long-term financial needs.

Misunderstandings Around Withdrawal Strategies

Rules of thumb are often discussed in retirement planning, particularly when it comes to withdrawing savings over time. While these frameworks can provide a general starting point, they are sometimes interpreted as universal solutions.

For example, commonly referenced withdrawal approaches are often based on specific assumptions about time horizons, market conditions, and individual circumstances. These assumptions may not apply equally to every situation.

Because retirement planning is highly personal, these types of guidelines are often best viewed as general concepts rather than fixed outcomes. Understanding the context behind them can help individuals interpret them more effectively.

Balancing Expectations With Reality

Misconceptions in retirement planning often stem from simplified ideas about complex topics. Retirement involves a range of variables, including timing, longevity, income sources, and economic conditions.

At the same time, individuals may find that their expectations evolve over time. As circumstances change, so can perspectives on retirement goals and financial priorities.

Taking a step back to review these assumptions can help create a clearer understanding of how different elements fit together.

Keeping the Focus on Long-Term Perspective

Retirement planning is a long-term process that develops over many years. Rather than focusing on a single moment or decision, it often involves ongoing reflection and adjustments based on changing circumstances.

Understanding common misconceptions can be a useful starting point for these conversations. It can help individuals ask more informed questions and consider how their plans align with their current situation.

At Advisors Management Group, financial planning is approached as an ongoing process that evolves over time. As individuals review their financial picture, these discussions can help maintain alignment between long-term goals and the realities that shape them.

While retirement planning can feel complex, taking the time to better understand common assumptions can provide valuable perspective. Over time, that perspective can support more informed conversations about financial priorities and long-term planning.

Contact Advisors Management Group

If you would like to discuss your financial goals or have questions about your current strategy, please contact us.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin. Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security. Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses. Please do not send orders via e-mail as they are not binding and cannot be acted upon. Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation. This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services. Any subsequent, direct communication by AMG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

Man with gray beard looking thoughtful while resting chin on hand.

How Much Money Do I Need to Retire?

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This is a common question related to retirement and retirement planning, and the answer might surprise you.

While most people assume there is a magic account balance, for example one million dollars, that is not the case. The truth is that people retire comfortably with all different account balances because every situation is unique. Let’s look at factors that contribute to your retirement needs. 

Spending Need

Everyone’s spending needs are different. If you plan to retire with no debt and minimal monthly expenses, you may need less than someone who has a larger spending need. For those with minimal spending, Social Security may cover a good amount of their spending need allowing for minimal dependence on retirement savings. On the other hand, if your monthly spending needs are large or you anticipate travel or big-ticket discretionary spending, you will need to have more money available. Ask yourself what you would like your retirement to be like, what expenses you will likely bring into your retirement and what you envision your lifestyle to be like. 

Replacing Income

If the idea of living without your 9 to 5 paycheck causes you to feel stressed, you are not alone. When you start retirement, you will need to replace your paycheck with other sources. For most people, Social Security will be the base portion of your retirement income. According to the Social Security Administration, on average, Social Security payments will replace about 40% of your income. If you have lower income, this number will be higher, but if you have higher income, this amount will be closer to 25-35% 

Anything that Social Security does not cover can be supplemented by your savings. IRAs, 401ks, Roth IRAs and non-qualified assets can be used to create a stream of income that becomes your paycheck in retirement. A professional financial planner can help to navigate how to spend your money to avoid spending it too quickly or paying too much in tax. 

Pensions

While only an estimated 15% of employees work for a company or entity that offers a pension, certain professions such as those in skilled trades, education or government likely offer a pension. If you are one of these workers, you will likely retire with less money in investments than your neighbor who works in the private sector. If you have worked in this industry for most of your career, you may have significant income that is not dependent on your personal savings. You may need far less money in savings to retire comfortably if you have a pension.

The Case for Financial Planning

The ins and outs of retirement planning can feel overwhelming. Financial planning can give you a look into the future and help you shed some light on your retirement future. There are a lot of factors that come into play when it comes to determining how much money you will need to save for retirement, and it is not a universal answer. It is easier to adjust your strategy earlier, then make compromises to your lifestyle later. 

You do not need a lot of money to benefit from a financial plan; however, it can be the difference between having a comfortable retirement or not. Not sure where to turn? We can help. Contact us today to start planning for your retirement future. 

 

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

Don't Forget your 401k

Forgetting something? What to do with your 401k when leaving a job

Changing jobs can carry a mix of emotions depending on the reason for the career change. Regardless of the reason for the job change, one thing everyone needs to know is what their options are with their 401k account from a previous employer.

The U.S. Bureau of Labor Statistics estimates that Americans will hold over 12 jobs over the course of their career. While younger workers are more likely to move around, the average job in the U.S. is held just over 4 years. Compensation and advancement are often the largest driving factors that leads people to make job changes. As people move from one phase of life to the next, sometimes they underestimate the importance of taking their retirement savings with them. While it may seem insignificant, making a conscious decision about your retirement nest egg can help you to keep moving forward financially.

After you leave your job, you have four options for your old 401k account.

What to do with 401k when leaving a job

Option 1: Leave your 401K where it is

In most cases, you can leave your 401k in the former employer’s plan.  This option requires the least amount of work since there is no additional paperwork needed. Also, your account is still able to grow tax-deferred until you withdraw funds.

While this option might be an easier option it may not be the most advantageous. One of the limits of a 401k plan is that there can be fewer investment options. Also, 401k maintenance fees may be passed on to you, which can increase the expenses of the 401k plan. Another restriction is that you cannot contribute to a 401k once you no longer work for that employer. Finally, it can be complicated to keep track of where you have funds if you have multiple 401k with past employers.

Option 2: Roll it over your 401K to your new employer

If your new employer has a 401k and the plan allows rollovers, consolidating your 401k from your previous employer with your new employer may make it easier to keep track of where your funds are located.  Earnings will accrue tax-deferred until you withdraw funds. Some 401k plans allow loans, by rolling over your previous 401k to the new one you may be able to borrow against that balance in the future.

The are some potential downfalls of rolling over your 401k to a new employer. Most 401K plans have limited investment options.  Those investment options can be replaced by the plan trustee without your approval. In addition, record keeping and administrative fees of the plan may be passed on to you.

Option 3: Cash out your 401k

Cashing out your 401k is another option for an old 401k. While this option allows you to gain access to your funds, it usually carries a penalty if you don’t meet certain qualifications. If you withdraw the money from your 401k and do not meet the required qualifications for a withdrawal (such as age, typically 59.5, financial situation, or disability) you will be required to pay a penalty for the early withdrawal. In addition to the early withdrawal penalty, income tax may also need to be paid on the withdrawal.

Option 4: Rollover your 401k to an Individual Retirement Account (IRA)

Rolling your 401k to an IRA allows for the most flexibility with your investment choices. This can give you access to mutual funds, exchange traded funds, stocks and bonds, to name a few.  You may also have greater flexibility with investments that provide income, such as dividends and interest.  IRAs can provide for greater flexibility with withdrawals and various tax withholding.  IRAs continue to allow for tax deferred saving.

There are some possible disadvantages to using an IRA.  You are not allowed to take a loan against an IRA.  Depending on your investment choices there could be upfront commissions, high annual fees or even back-end charges limiting you from withdrawing money from the IRA within a certain period of time.

It is important to remember everyone’s situation is different. When deciding what is the best option for you, it is wise to research all options and understand the fees involved with those options. These decisions are difficult, and you may want to reach out to a financial professional to assess your situation. In doing so, we suggest you work with a fiduciary, an advisor that works in your best interest.

Shay

Shay Benedict

Trading Specialist

Shay joined Advisors Management Group in June of 2020. Shay works as a Trading Specialist for AMG. He works alongside the advisors to trade client portfolios. He helps to provide continuous improvement within the trading department, to ensure we meet our client’s needs.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

Rethinking Retirement

Retirement Myths and Realities

As financial planners, we hear all kinds of thoughts that people have about retirement. The fact is that no two people are the same and neither are two retirement scenarios. Your neighbor may plan on spending a whole winter in warm weather and you may prefer to stay near your children and grandchildren. There isn’t a right or wrong way to do retirement, but it is important to plan properly to make your ideal retirement happen. Let’s break down some of the common misunderstandings about retirement.

Myth # 1 – I need $1,000,000 to retire

You may need 1 million, 2 million, 10 million or perhaps you can retire on far less. It really is relative to what you need monthly to make your world go around. Let’s reframe this scenario and completely take a dollar amount out of the equation. You will need a certain amount per month to pay all your bills and pay for the extras you desire. If the mix of income, market growth, inflation, and distributions you have will provide what you need per month, you may be able to retire.

Let’s say Jeff and Sharon are 65 and 67. They do not have a million dollars saved. They own their home and have paid off their mortgage and have no debt. They have normal bills such as utilities, insurance, home maintenance, and taxes. Additionally, they spend money on gas, groceries, gifts and other discretionary spending.

Both Jeff and Sharon receive Social Security and Sharon has a teacher’s pension. These 3 sources of income pay for most of their expenses, but they do have other expenses that it doesn’t cover. They both have IRAs, and they have some money in accounts at their local bank. They withdraw a small amount from their IRAs to cover expenses that Social Security and pension does not cover. They work with their advisor to make sure they do not take too much money out of their IRAs, putting their portfolio in danger of running dry. Since their IRAs are invested, they see modest long-term growth that will allow them to increase their draw in the future as inflation increases their income need. This works well for them.

A solid financial plan and an experienced advisor will help you to determine what you need to save, how much you need to accumulate and help you manage investments and plan out how to start to spend your money.

Myth # 2 – I don’t have enough money saved to hire an advisor

While there are some firms that require a certain level of wealth, many, like ours do not. We believe that having an advisor at all levels of wealth will put you on the right path to accomplishing your goals. If you wait until you feel your portfolio is large enough, you may not have enough time to change the path of your strategy. It is far better to seek help earlier in the game so that you can determine what is appropriate for your situation and what you will need to do to get there.

Myth # 3 – My employer manages my 401k

Nope, nope, nope…this is absolutely false. In fact, your employer cannot manage your 401k. Your employer is responsible for choosing suitable options for employees to invest in and getting the contributions into the plan, but they are not choosing what you personally are investing in or managing it for you. You will decide how much you’d like to contribute and what to invest in. There may be an investment person that will help you fill out the paperwork to enroll, but they won’t automatically make changes to your account through the years. Because a 401k plan sponsor (your employer) has a fiduciary responsibility to provide a suitable plan, many have included Target Date Funds or Lifestyle Funds to help investors select something suitable, but these are not personalized portfolios. Some financial advisors will help their clients oversee their retirement plans and adjust their strategy as they get closer to retirement. Some people may even decide to move a portion of their investments to IRAs as retirement approaches for a more hands-on approach to management.

Myth # 4 – I should contribute all my savings in my pre-tax 401k to save on my taxes

It is by no means wrong to save as much as you can afford in your pre-tax 401k, but it may not be the most tax efficient way to do things. In fact, you may want to include investments that are not in your 401k plan. Having different “buckets” of money that will be taxed differently will allow you to control tax in retirement and gives added flexibility to a retirement plan. You will however want to make sure that you continue to save enough in your 401k that you pick up any match that you are eligible for.

Roth-401k – Many employers are offering Roth 401k as a supplement to the traditional pre-tax 401k. With Roth 401k you can use after tax dollars to fund the same employer sponsored plan. You won’t get a tax break this year, but you can take it out later without paying tax.

Roth IRA – These work in a similar way as a Roth 401k; however, they are outside your employer’s plan. This puts you in the driver’s seat when it comes to choosing the investments and allows for professional management. Again, you won’t get a tax break in the year you save it, but if you follow Roth IRA rules, you will be able to take it out tax free later. Please note that Roth IRAs are subject to income thresholds. Be sure to verify with your financial advisor or tax preparer that you are eligible to contribute.

Brokerage – Retirement savings do not need to be in a retirement account at all. You can use accounts such as brokerage accounts or even bank accounts that are funded with after tax money to fund your retirement. You will owe tax when dividends and interest are paid on investments and when investments are sold at a gain. It is possible to control taxes by offsetting capital gains with losses as well. Brokerage accounts do not have the age restrictions on them like retirement accounts do; this allows you flexibility with retirement age and can be very useful if you are planning to retire before age 59.5.

When you diversify your savings strategy, you also diversify your tax strategy which can pay off when it is time to start your spending strategy.

Retirement Reality

When considering what is fact and what is fiction when it comes to your retirement, it is important to know what facts apply to you. The perfect retirement is as individualized as you are. Working together with a trusted professional will help you to determine how you need to save, grow, and distribute the money you will need for your retirement.

Rebecca Agamaite

Investment Advisor Representative 

Rebecca joined the firm in 2011 as an Investment Advisor Representative. In this role, she works with clients to manage their investment assets and help them obtain their financial objectives. Rebecca brings a great deal of experience to the team having worked for several years at Marshall & IIsley Bank and MetLife. She earned a Masters of Business Administration degree (with an emphasis on finance) from Concordia University.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

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