Mark Henry is the founder and CEO of Alloy Wealth, where he provides customized financial advice to retirees and those planning for retirement. Together with his team of experienced financial advisors at Alloy Wealth, Mark Henry creates written financial plans tailored to clients’ individual financial circumstances, lifestyle budgets, goals, risk tolerance, and retirement timelines. These plans include tax planning and strategies for thriving financially despite longevity risk, market volatility, and inflation.
In addition to providing clients with comprehensive retirement plans, Mark Henry dispenses valuable financial guidance through several platforms. He addresses audiences at public speaking engagements and regularly appears on radio, podcasts, and television. His Living Large Retirement blog and YouTube channel cover the latest retirement planning topics and answer questions from clients and viewers.
Getting Retirement Plans Back on Track
On a recent episode of his Living Large Retirement YouTube show, Mr. Henry hears from a 45-year-old client who has saved more than $200,000 but worries he has fallen behind on his retirement planning. The client is also saving for his kids’ college and paying a mortgage on a house. He and his wife have a combined annual income of around $130,000, and they want to retire at 60. Taking all this into account, Mr. Henry explains some strategies to help the client move forward.
Mr. Henry clarifies that, according to NerdWallet and Vanguard, the average 55- to 64-year-old has $271,000 saved for retirement. However, the median savings at that age group is $95,000. Bankrate confirmed those numbers, while Kiplinger put the average at $238,000. Mr. Henry lists these statistics to demonstrate that $200,000+ in retirement savings by age 45 is already well ahead of the average—almost equal to people 10 years older. That fact may not be comforting, depending on the client’s retirement goals, but Mr. Henry emphasizes that it is important to start the conversation by putting the client’s situation into proper perspective.
Trying to save for kids’ college is admirable, but there’s a reason why, when a plane is going down, they tell people to put their oxygen mask on first and their kids’ masks second. When it comes to retirement, the same concept applies. Everyone wants to save in 529 plans for their children’s education, but that can come at a cost. What good does it do for children to have a fully funded education if their parents aren’t financially secure in retirement and the children end up having to support them? For parents, the primary goal in retirement should be to avoid burdening their children.
In fact, Mr. Henry makes it clear that if clients come to Alloy Wealth and don’t want to prepare for retirement in a way that will not burden their children, he likely doesn’t want to work with them. Many families fund 529s when they shouldn’t be. Instead, they should help their kids excel in school—helping them with homework and extracurriculars—so they can earn scholarships. Parents should only fund 529s after their own retirement savings are intact and secure.
Mr. Henry also suggests looking into Roth accounts. These offer tax-free growth and withdrawals in retirement and are an important part of a tax-diversified retirement plan. At the same time, it is vital to consider debt and work toward paying it down. It’s also important to have an emergency fund that covers three to six months of expenses in case of job loss. This fund should be kept in a high-yield interest account. Next, it is important to track expenses, such as subscriptions, that can affect a monthly budget.
Only when all this is done is it time to look more deeply into building equity in retirement funds and other investment vehicles.
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