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Press Release updated: Sep 1, 2020 08:00 EDT

Shocking as it may seem, more than half of Americans (56%) don’t know how much money they’ll need to retire. Research published by Schwab Retirement Planning Services found that on average, individuals with 401(k)s believed they needed $1.7 million in the bank to retire comfortably, yet exceedingly few were on track to get there. Experiencing a comfortable retirement is a universally desired goal, yet it’s increasingly difficult to find clear guidance on how to achieve this goal. Lack of clarity around how financial decisions and habits can guide retirement planning led Zoe Financial to comb through mountains of academic papers, government demographic studies, institutional research, and more. Zoe Financial’s newly released retirement planning guide, The Road to Retirement, establishes a single source of truth on planning for retirement by outlining five key phases in the retirement planning process.

Planning for Retirement Isn’t One Size Fits All

Planning for retirement is not “one-size fits all.” That is why Zoe’s Guide to Retirement Planning approaches planning through a holistic framework that evaluates how an individual’s emotions, values, and finances overlap.

The Road to Retirement allows the reader to follow their own retirement planning journey alongside distinct phases of their life, such that they can identify, evaluate, and implement the strategies that best fit their individual financial goals.

The Five Phases of Retirement Planning

1.     Earn More to Save More

Retirement planning is often centered on the principle of “spend less, save more,” but this advice often falls short when retirement feels distant. The Earn Phase discusses the value of maximizing an individual’s earning potential. The Earn Phase is most appropriate for individuals who are only just now setting off on their adventure into preparing for retirement and want to learn how to earn more, to save more.

2.     Save for Retirement

Once an individual has maximized their earning potential, they can begin the Save Phase. From discovering what kind of saver they might be to how the best strategies for approaching building retirement savings, the Save phase enables readers to ensure they are approaching saving towards retirement effectively. Additionally, it discusses how to select the right retirement savings account (Employer-Sponsored Retirement Plan such as a 401k or 403b or an Individual Retirement Account IRA), all while keeping an eye out for lifestyle creep.

3.     Grow Your Nest Egg and Investment Portfolio for Retirement

Once monthly savings contributions don’t make a substantial dent in one’s nest egg, it’s imperative that the individual begin considering how to grow their portfolio. ​

At first, it’s clear growth is driven by contributions, but as time passes, the account value is overwhelmingly driven by the compounding of one’s investments. For individuals interested in learning how to invest smarter, the Growth Phase focuses on how to grow one’s wealth by allowing compounding to do the heavy lifting. Furthermore, the phase dives deeper into how to understand asset allocation, risk capacity and risk tolerance, tax implications. Finally, the Growth Phase reviews how to be aware of potential underlying costs in an investment portfolio.

4.     Transition into Retirement

Traditional retirement planning often doesn’t include a Transition Phase. Unfortunately, failing to plan for one’s transition into retirement can make a serious negative dent on a person’s retirement. Transitioning into retirement is the most inherently unique as it will depend on existing savings and investments, health conditions, income, and a multitude of other factors. A fiduciary financial advisor can be helpful during this phase, as they help their clients avoid sequence of return risk and other costly mistakes that often occur when phasing into retirement.

5.     Preserve & Enjoy Your Wealth in Retirement

In order to comfortably enjoy retirement without worrying about one’s finances, it is important to implement strategies that ensure a consistent retirement income. The final phase, Preserve and Enjoy, teaches how to establish a realistic retirement income plan through frameworks including the Buckets System, Target Risk Portfolios, and Target-Date Funds. Equally important is understanding required minimum distributions (RMDs) and how much/from which accounts a person should withdraw from to live off without being concerned about outliving their money or relying entirely on social security or pension.

Zoe Financial’s Guide to Retirement Planning

Zoe Financial’s latest cost-free guide, The Road to Retirement dives deeper into each of the five phases of retirement planning and how they relate to each individual’s unique retirement planning journey. To identify which phase suits each point in a person’s life, as well as to learn actionable frameworks and strategies, download a copy. A fiduciary retirement planner can be especially helpful throughout the retirement planning journey. Zoe’s exclusive network of fiduciary advisors includes only the top 5% of experts especially vetted for their experience in guiding clients in their retirement planning. By acting as trusted navigators during the retirement planning process, preparing for retirement can be a stress-free and exciting journey.

About Zoe Financial

Zoe Financial’s award-winning algorithm enables individuals to discover and connect with highly vetted, top fiduciary advisors in their area. All financial advisors in the Zoe Network are vetted and verified fiduciaries, along with having top credentials, education, and experience. Zoe’s service provides support from start to finish during an individual’s financial advisor search. All consultation calls and interviews with Zoe’s network of advisors are completely free and are offered via video chat or traditional phone call depending on an individual’s preference.

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Source: Zoe Financial