June is the month we pay special attention to the fathers in our lives. It’s a time for gifts and tokens of appreciation. Okay, so sometimes they aren’t quite as splendid as the outlay for Mother’s Day, but they convey our genuine affection just the same. This year, we think it could be a good idea to give a gift with lasting value that doesn’t cost you anything, a gift that keeps giving even when Father’s Day is long behind us – the gift of making sure dad is all set for retirement.
A good rule of thumb is to aim for a retirement income of at least 70% of whatever we’re currently making. However, research shows that only XX% of Jamaicans are properly prepared to live the life they want after their 9-to-5 ends. Chances are your dad could use some assistance, although it’s also quite likely he may be reluctant to admit it.
Have a Conversation
The first step is to have a conversation about it. Let your dad know you want the same for him as he’d want for you – to ensure his needs are taken care of when it matters most. If he has a plan, now is the time to get the details. If he doesn’t, ask about his goals. How does he envision his post workaday life? Write them down – start a journal. Add pictures to make it more interesting. For some, this will be the hardest part, but if you’re able to get the conversation going, it could mean the difference between a stressful retirement for him and a stress-free one.
Next, find out what he has in place now, including pension contributions at work, savings, investments, insurance policies and any relevant assets. All of it will go toward achieving those goals you’ve talked about. Take a look at any certificates or documentation and add the information to the journal. If his goals include a new income stream, like starting a business or monetizing a hobby, make note of them as well.
Decide on a figure or a range for the income that will create the post-work lifestyle he wants. Discuss timelines with him as well. When does he want to retire? What about the other milestones, when does he want those to happen? How long will it take to get the business started? Put it all in the journal.
Of course, if your dad has a partner, especially if any of the finances are joint, you’ll have to include their plans and their information as well.
Armed with the journal, the vision and the plan for retirement, it’s time to reach out to a Wealth Advisor. Since you have the journal, your initial conversations may not need to include a parent. Discuss the options in broad strokes, with enough room for you to go back and have a conversation about possibilities with your father.
Talk about adjustments or sacrifices that might need to be made; rebalancing of portfolios and any other changes necessary to make the goals happen. This is where you both agree to a general idea of the plan of action. Put this rough draft of the plan in the journal, then set a meeting with everybody and your Wealth Advisor to nail down the details.
The retirement journal is now a road map and you can hand it over to your dad. But it’s a good idea to revisit it annually – every Father’s Day perhaps – to see where he is on the journey and see if any adjustments need to be made. No, it’s not a necktie or a ‘Super Dad’ coffee mug, but helping your father create the life-after-work he really wants is a gift he’ll be able to appreciate for the rest of his life.