Expert Interview with Bob Henderson on Saving for Retirement Later in Life for boldin.com

We’re guessing there might be one or two readers out there who are overwhelmed about the amount of money they need to save to retire comfortably. But there’s no need to panic, says Robert Henderson, president of Landsdowne Wealth Management in Mystic, Conn. “It’s one step at a time,” he says. “There are options to minimize your retirement shortfall. And the SOONER you take action, the better.” Robert recently checked in to outline the steps you can take to make sure you’re covered in your golden years – whether you started saving in your 20s or are catching up in your 50s. Read on to learn more: Tell us about Landsdowne Wealth Management…what services do you offer? We are a fee-only Registered Investment Advisor (RIA) in the state of Connecticut. Our primary services consist of investment management, financial planning, and divorce planning. What sets you apart from other wealth management firms out there? In our area, there are very few fee-only planning firms. While fee-only planning is not for everyone, I have found that many individuals have been specifically seeking out fee-only planners.
 In addition, my focus on planning and consulting in the divorce industry is unique. While I have many peers around the country that also specialize in this niche, I am one of very few in my local area that focuses on dealing with divorce, and more specifically women going through divorce. I credit this specialty to my patience and willingness to work on the “tough” cases. What do you think are the smartest things we can do to prepare for retirement? In my experience working with pre-retirees and retirees, I would say the most important things are focusing on paying down debt (though not necessarily mortgage debt), developing a sustainable lifestyle (sustainable from a financial perspective), and preparing for ALL aspects of retirement (i.e., researching healthcare, estate planning, long-term care, tax planning, etc.). What are the biggest mistakes you see your clients (or Americans in general) making with regards to retirement? Without a doubt, I see too many people who “live in the moment” during the pre-retirement years (i.e., 50s and 60s) and create a lifestyle that is simply unsustainable in retirement. And when they finally reach retirement, they have a very hard time having to scale back on that lifestyle. I also see a fair number of people retiring too early. If you are used to earning and spending a $150-200K combined household income, and you only save $750K for retirement (plus social security and maybe even a small pension), you might be looking at only replacing 50 percent of your income. Had you learned to live on much less of that income, then you would be looking at replacing 75-100 percent of it. In your opinion, what should Americans be concerned about the most today when it comes to saving for retirement? People need to re-evaluate what they want their working years and retirement years to look like. Longevity is a big problem in America. People live longer, but this also means more need for retirement income and healthcare and long-term care costs. What advice do you have for those who didn’t start saving for retirement until later in life…is there anyway to make up for lost time? Sure. Generally when people have a big gap, I try to focus on a multi-faceted approach (as opposed to telling people they need to set aside a huge percentage of their income for retirement). While every situation is unique, you could: 1. Work a few extra years in your primary career (this allows you to save more and have fewer years to provide for in retirement) 2. Plan to work part time in retirement for a while. These days, most healthy 65-year-olds have plenty of years left to work if they choose. And you don’t need to earn a lot. Sometimes it’s just spending money doing something you enjoy. It also has the added benefit of being flexible, keeping you engaged, and keeping you from spending money. 3. Ramp up your savings. This one is obvious, but bears mentioning. You certainly don’t want to add debt in order to prioritize added savings. But sock away as much as possible. 4. Focus on minimizing your lifestyle. Maybe it means downsizing your house when appropriate, moving to a less expensive area, buying a less expensive car, selling some of the stuff you don’t need or use anymore (e.g., boats, RVs, motorcycles, etc.). And maybe it means finding less expensive ways of enjoying your retirement. 5. Paying down debt. What are your favorite types of investments for older Americans closing in on retirement? I try not to get married to any one particular investment or strategy. The economic, interest rate, and investment climate is constantly changing. Fifteen or 20 years ago, you could buy short-term CDs and earn 5 percent. For conservative retirees, that was a great option. Even five years ago, I was still recommending fixed annuities for the shorter end of client portfolios. Today, CDs and fixed annuities pay virtually nothing and are merely short-term savings vehicles. The point is, one size never fits all. However, certain themes are always strong. For example, quality, dividend-paying stocks are – in most cases – a component of all of our portfolios. What types of investments do you avoid? I am not a fan of insurance products as investments. Various forms of permanent insurance can be critical in certain situations (e.g., estate planning or businesses continuity planning), but for the most part do not represent good “investments” in the truest sense. 

I also steer clear of illiquid investments such as non-traded REITs and private equity. While there are certain investors where these may be appropriate, for the vast majority of people, quality stocks, bonds, mutual funds, ETFs, CDs, and most annuities should comprise most of their portfolios. What do you think the future of retirement looks like for us? The difference between retirement 30 years ago versus today is that today’s retiree needs to be more “self-directed.” You have to make your own savings decisions during your working years, your own investment decisions throughout your life, health and long-term care decisions are critical (and costly), and make important lifestyle decisions (when to retire, what type of lifestyle to lead). Gone are the days where Social Security, Medicare, and your employer (pension) took care of your retirement years. Connect with Robert on Facebook, Google+, LinkedIn, Pinterest and Twitter.