Net Worth to Retire as a Wealthy Investor – PillarWM
Many wealthy investors view retirement as the finishing line after which they can relax and live comfortably. However, it can be difficult to determine the best net worth to retire. If you own between $5 million and $500 million in liquid investment assets, you should seek guidance for retirement planning from Pillar Wealth Management. Our wealth managers have helped numerous high net worth as well as ultra-high net worth individuals plan for their dream retirement. Wealthy investors can learn about advanced investment strategies for retirement in our guide for investors with $10 million or more.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
Table of Contents
The Importance of Saving for Retirement
Anyone who has been working in a fast-paced career for many decades should look forward to their retirement. This stage of life offers them a chance to sit back and enjoy the life they have built up for themselves. However, you won’t be able to achieve your dream retirement if you do not have a sufficient quantity of retirement savings. Please set up a special appointment with us to learn about the importance of retirement savings.
Some reasons to prioritize retirement savings during your career include:
Sustaining Your Lifestyle
As someone with a high net worth or an ultra-high net worth, you may have become accustomed to a specific type of lifestyle. This may include owning high-end cars, maintaining a summer home in the countryside, or frequently traveling to exotic locations. However, if you do not have a sufficient quantity of retirement savings, you may be forced to downgrade your lifestyle and live more humbly.
Nobody wants to downgrade their lifestyle, especially when they have spent multiple decades working hard to build wealth. You can combat this problem by growing your retirement savings consistently throughout your career. We discuss some great wealth-building strategies in our portfolio growth guide.
Providing for Your Family
It’s not uncommon for wealthy investors to hit retirement age around the time their children are entering college. However, they may have trouble funding their children’s post-secondary education if they no longer have an active source of income to draw from. Once you have found yourself in this situation, you may need to draw funds from your retirement savings.
If you do not have a high quantity of retirement savings, your child’s education options will be more limited. This makes saving for retirement an essential practice for any wealthy investor that wishes to provide nothing but the best for their children. You can learn more about family wealth protection in our special book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million.
Paying Medical Bills
Another reason to prioritize saving for retirement is to pay for medical bills. The unfortunate truth is that people often develop health conditions close to or after retirement. Some of these health conditions can be managed with long-term care, while others may require expensive surgeries to treat.
The last thing any wealthy investor wants is to lose their retirement comforts due to an unexpectedly high hospital bill. This makes saving a sufficient quantity of wealth a vital practice for retirement. Please set up a free session with our wealth managers to learn how you can manage medical bills during retirement.
What Is the Best Net Worth to Retire Comfortably?
So what should your net worth be when you retire? Plenty of wealthy investors have asked this question. However, the truth is that the answer can vary greatly depending on your exact situation.
Many financial experts estimate that a person’s post-retirement annual spending will be around 70% to 90% of their pre-retirement income. So if you were earning $600,000 per year before retirement, you could expect to spend $420,000 to $540,000 during each year of your retirement.
You don’t necessarily need to spend this much each year. However, you may be reluctant to downgrade from the high-spending lifestyle you have grown accustomed to.
Is Net Worth Everything When It Comes to Retirement Savings?
The information mentioned above may come as a shock to many people who are approaching retirement age. You may be wondering, “can I retire at 55 with 300k in savings”. Unfortunately, this amount may be too little for most wealthy investors. If you plan to stretch out these savings for 30 to 40 years, you may need to limit your spending to $10,000 or less per year.
The good news is that there are ways to fund your post-retirement lifestyle without dipping into your savings each time. Many investors invest in special assets that provide passive income during their retirement.
These could be safe and steady investments that provide a constant stream of income and do not need to be monitored or managed frequently. We discuss various investment strategies in our guide to improving portfolio performance.
How to Start Planning For Retirement
If you intend to live out a comfortable retirement, you should start planning for retirement as soon as possible. This planning process involves many steps that you may not be familiar with. Luckily, this process can be made easier with the help of retirement planning services.
Some retirement planning tasks include:
Understanding Your Finances
One of the more crucial steps in the retirement planning process is understanding your finances. You may be wondering, “How much money must you have to be considered wealthy?”. You can spend much time researching this question, but the answer will vary greatly depending on who you ask. Some financial experts will claim you will need a minimum of $2.3 million to be considered wealthy. Others may claim $100,000 is enough for an investor to be considered wealthy and live a comfortable lifestyle.
We would argue that the term “wealthy” is arbitrary when it comes to saving for retirement and that understanding your finances is more important. This involves developing an understanding of your various income sources, expenses, and savings.
For example, many investors earn income through their businesses or careers while also receiving earnings from various investments. If your annual income exceeds your expenses by a significant margin, you can add the remainder to your retirement savings or put them towards other investments. However, you might not be aware of where you stand until you study your finances carefully.
Setting Retirement Goals
Setting retirement goals is also crucial during the retirement planning process. These goals could be related to your intended retirement lifestyle and the amount you plan to spend to maintain it.
You can also use this time to decide where you plan to live during retirement. It’s not uncommon for wealthy individuals to move to smaller homes that are easier to manage following retirement. Such homes could also be a different state with access to better medical services and are more senior-friendly.
Getting Started With Saving
Planning for retirement also involves budgeting activities. Once you have understood your retirement goals and how much you will need to save, you may need to re-adjust your spending habits to fit with your savings goals. However, this process can be challenging and may require the assistance of a financial advisor that offers retirement planning services. You can learn how to choose a suitable financial advisor with the help of our special guide.
Why Choose a Wealth Manager For Retirement Planning
Wealthy investors should get started with retirement planning as quickly as possible if they wish to set their plan into motion. However, you may be confused about where to find retirement planning services. Plenty of financial advisors across the country offer retirement planning services. However, we would say a wealth manager can provide retirement planning and more for wealthy investors.
Some reasons to choose a wealth manager for retirement planning include:
Familiarity With Wealthy Clients
Wealth managers stand out from ordinary financial advisors for many reasons. The main one being that they deal primarily with clients with a high net worth or an ultra-high net worth. In fact, at Pillar Wealth Management, all our clients have a minimum of $5 million to $500 million in liquid investment assets. This means wealth managers are familiar with the unique retirement goals and lifestyle wealthy investors wish to attain.
Regular financial advisors who offer retirement planning services may deal with clients of ordinary worth. As a result, they may not be best suited to handle the needs of clients who own several high-value investments.
Wealth managers also provide a much wider range of services compared to ordinary financial advisors. This includes service such as:
• Asset management
• Portfolio analysis
• Estate planning
• Tax planning
These services may seem unnecessary for someone who simply wants to plan their retirement. However, retirement planning can be viewed as a form of wealth management. This means each of the above services can help you towards meeting your retirement goals in some way.
For example, portfolio analysis services can help you identify which of your assets are going to benefit you during retirement and which ones likely to hold you back from growing your post-retirement wealth. We discuss the special importance of choosing the right investments in our guide for investors with $10 million or more.
Similarly, tax planning can help you choose investments that are more tax-efficient and leave with you better post-tax earnings than before.
Wealth managers also charge their clients differently than ordinary retirement planners. At Pillar Wealth Management, we charge our clients a fixed annual fee based on their assets’ value. We follow this pricing structure because it is transparent and informs clients about exactly how much they can expect to pay beforehand.
This is different from the fee structure ordinary retirement planners use. These professionals may charge you an hourly rate for using their services. They may then charge an additional lump sum for your retirement plan.
The advantage of using a wealth manager is that you can use their services as often as you need to and without worrying about racking up extra charges each time you meet with them. Please set up a special free appointment with our wealth managers to learn more about our pricing structure.
Why Choose Pillar Wealth Management
If you are interested in using a wealth manager to handle your retirement planning needs, you can’t go wrong by choosing Pillar Wealth Management. We have accrued sixty years of experience after serving high net worth as well as ultra-high net clients across the country.
Wealthy investors trust us to help them plan their future and create the retirement plan that is best suited for them. So start planning for a comfortable and worry-free retirement with our wealth managers’ assistance. Please set up an exclusive free appointment with us today and get on track with achieving your dream retirement.
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