The Eight Distinct Retirement Profiles™

A small percentage of retirees ascend to the most coveted of the Eight Distinct Retirement Profiles, Transformational Generosity. Transformational Generosity is giving that transforms both the giver and the receiver. Moving from Multi-generational wealth to Transformational Generosity is often simple, but this mindset change is one of the most difficult for financial advisors to help their clients achieve. There are a variety of barriers that are discussed in greater detail in Plan On It.

Retirees who achieve Lifetime Abundance, then look to help their heirs as they prepare for their own retirement fall into the Multi-Generational Wealth Profile. The differences between these profiles are subtle and easily achievable. In most cases, it’s simply a mindset change that leads to gifting, and cost in dollars is often free, and the cost of your time is minimal.

In the Lifetime Abundance retirement profile, retirees have either controlled their spending enough, saved enough, or a combination of both, to allow their net worth to continue to grow throughout retirement. This is a very confident position to be in. At this point, some retirees start to think about the next generation.

Unwavering Assets is a very desirable retirement profile. These retirees generally enjoy many of the comforts they desire during retirement, living off social security, and a combination of pension, rent, royalties, or other income. They take care to draw from their assets in a controlled manner so they don’t touch any principle, or they have used life insurance as a form of nest egg replacement, allowing them to spend down their assets, yet still end retirement with relatively the same amount they started with.

In Diminishing Wealth, retirees have made plans to spend down their assets in a controlled manner. Though it can be frightening watching your retirement assets diminish year-over-year, proper planning and techniques can help lower the risk of running out of money during your lifetime.

The party is fun while it lasts, but the Capital Decay profile is one of the most disheartening. No matter how much these guys save, they spend until it’s all gone. Believe it or not, some of them manage to accumulate money in their retirement plans at work, probably because of the ease of savings and the barriers to withdrawals, but once they get a taste of drawing that money out in retirement, the floodgates open and it’s only a matter of time until it’s all gone.

The next of the Eight Distinct Retirement Profiles, Back to the Basics, includes individuals and couples who have some savings and pension income. Though they have more income, the quality of their lifestyles are still limited. Think of back to the basics as a return to the early years of marriage and child-rearing, when times were tight and entertainment options were limited due to budget constraints.

The last of the Eight Distinct Retirement Profiles is State of Scarcity. Individuals who fit this profile survive on social security alone. Though they don’t have to work, these individuals generally spend their retirement years in relative seclusion.