Residents were able to learn about common financial mistakes individuals make following retirement during a recent presentation given by Phillip Palumbo of Smith Barney, Morgan Stanley.
Palumbo, who has worked in the industry for about 10 years, is the Vice President of Wealth Management at Smith Barney and also a certified planner. He is an expert in reducing taxes, creating income solutions and handling risk management.
About 90 percent of the clients that Palumbo works with, he said, are people who are preparing to retire or who have already retired.
“I help my clients understand and make sure they have enough money to retire comfortably,” Palumbo explained.
Also, Palumbo said he addresses how clients will replace their income stream, reduces their taxes while they are living, reduce probate and protect the person’s assets should they become incapacitated.
Palumbo shared some of the most common mistakes he sees people make when it comes to their finances following retirement.
The first of those common mistakes was underestimating life expectancy. Noting that, due to medical breakthroughs, individuals are now living longer, Palumbo said that people are now living into their 90s.
Underestimating how much money a person will spend during their retirement is another common mistake, Palumbo said. He explained that some people think they need 70 to 80 percent of their pre-retirement income on an after-tax basis.
However, Palumbo said that the “more realistic number” is 80 to 90 percent.
Three other areas where mistakes are made that Palumbo discussed were inflation, tax planning and transfer of wealth.
Some of the issues that Palumbo said need to be addressed throughout this are what a person needs, the rate of return they need, where the income will come from to pay for their particular lifestyle, risk protection, versification in investments, and time horizons for investing, among other things.
Palumbo also said that it is important to look at the big picture when planning for the future.
