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When Should I Start Retirement Planning

Knowingly or not, you started planning for retirement the minute you decided to participate in a company-sponsored retirement plan or make an IRA contribution.  Everyone knows they have to save for retirement someday.  When you are just starting, the stakes are low, and your decisions are limited to how much you can afford to contribute and how to invest the contributions and portfolio.  As time goes on and your portfolio’s value goes up and your time left until retirement goes down, the stakes begin to rise, and questions begin to form.  Am I appropriately invested?  What can retirement look like for me? How much more will I need to save?   Am I on track?  Am I taking advantage of the opportunities available to me?   This is where the need for a more formal approach to retirement planning arises and becomes more valuable.  Unfortunately, most think they don’t need or can’t seek formal retirement planning help until they are ready to retire.  This is just not true.  

Formal retirement planning can provide value far before you are ready to retire.  Formal retirement planning can help you develop your vision for retirement, quantify that vision, determine the gap between current and needed resources, and help you optimize the options available to you, including investment management, portfolio construction, and tax planning.

Three Factors to Help You Determine Your Answer

The answer to the question “When should I start retirement planning?” will vary by each individual based on the following three factors:

1). Confidence in Current Advisor or DIYing

Most individuals start retirement planning by themselves (i.e., Doing-It-Yourself or DIYing).  Perhaps they seek some advice from a knowledgeable friend or family member, but most cannot afford (nor do they really need) professional advice right from the start.  As wealth grows and choices grow, decision-making can become more complex, and the cost of making a less-than-optimal decision greater.  Each individual will have a differing comfort level given their risk profile and knowledge of personal finance.  People with less risk tolerance or knowledge often choose to hire a financial advisor to help them save for eventual retirement.   

No matter the route, there is typically a point where an individual realizes that retirement planning is a far different and more complex activity than simply saving for a day off in the future and managing an investment portfolio.  Similarly, people who sought professional advice early on may find they are not comfortable remaining with their current advisor when it comes to retirement planning.   It could be a lack of practice focus, lack of necessary knowledge/skill, relationship concern, or high costs that drive a person to a retirement specialist to serve them during this next chapter of their life.  Whatever the route, individuals typically come to see the additional complexity and risk factors involved in preparing for retirement and realize that professional retirement planning is in order.

2). Cost Versus Benefit Economics

It can also make sense to seek professional retirement planning help when the benefits of doing so outweigh the costs.  The term “costs” in this context can take on two different meanings.  First, in the case of someone DIYing, the term cost represents the opportunity cost of making a poor decision or suffering mental anguish over trying to make the right decision.   When the potential cost of and mental toll over making a less than optimal decision becomes greater than the explicit cost of professional help, it makes sense to seek out that help.  You may be reaching a wealth/complexity level or stage in your life that it’s just not worth it to you to continue DIYing. 

Second, in the case of someone already utilizing an advisor, the term cost can take on the additional literal meaning, explicit cost.   When you are young with little money, paying 1.0% of your portfolio’s value to your advisor every year may not sound so bad (it still is, in my opinion), but as wealth grows, so does the fee you end up paying that advisor.  Here is a real example from only two weeks ago that I see all the time.

I had a physician schedule an introductory call with me.  He said he really liked what he was seeing from us but then said, “I’m too far away from retirement still to take advantage of everything you offer as part of Thrive Retirement Specialists’ service.”  As we talked a little further, he revealed his current portfolio’s value was nearing $3.0 million, and he was working with a financial advisor on his investment management.  This financial advisor charged near the industry standard of 1.0% of the physician’s portfolio.  The look on his face when I explained that he is paying his current advisor nearly $30,000 per year for just asset management, but he could work with us for a flat fee of $9,000 per year, was priceless.  Even if he didn’t elect to or need to take advantage of any of our other services but investment management, he would still be saving $21,000 more per year.  Even if formal planning for retirement may be years out still, and you’re working with an advisor that charges you based on the size of your portfolio (%AUM), it may make economic sense to make a switch.  

3). Proximity to the “Retirement Red Zone” 

The “retirement red zone” is a term coined by Prudential Insurance to refer to the five years leading up to your retirement date and the five years after retirement.  This ten-year period deserves such special recognition because it is a time when you are exposed to a heightened sequence-of-returns risk that can seriously derail your retirement date plans or portfolio’s longevity after retiring.  See our Insight entitled “Critical Risk During the Retirement Red Zone” for more. 

This heightened sequence-of-returns risk is also a major reason why conventional wisdom holds that you start formally planning for retirement five to ten years from your intended retirement date.  It is important to begin transitioning your portfolio to one ready to support you in retirement.  This means reviewing the asset allocation decision and your portfolio’s construction so that you are in a good position to manage the heightened sequence of returns risk you will be exposed to during the “retirement red zone.”  Another reason to start planning for retirement five to ten years before your intended retirement date is to allow time to develop and execute an optimized retirement income strategy that considers a withdrawal sequencing strategy to minimize lifetime taxes.  This strategy often calls for a series of Roth IRA conversions and other tax planning strategies.  See our Insight entitled “Developing a Retirement Income Strategy to Minimize Taxes” for more.

If you determine the time is right for you to take a more formal approach to retirement planning, we stand by ready to help.  To learn more, you can schedule a friendly, informal call for a date and time that is convenient for you here at this link: https://calendly.com/thriveretire/thriveretire-call or contact us here at any time.



Thrive Retirement Specialists is a retirement planning specialist dedicated to delivering a more thoughtful and strategic approach to retirement planning for those nearing or in retirement. We are a fee-only Registered Investment Advisor (RIA) offering a single, flat-fee service entitled ThriveRetire™ that goes far beyond what has traditionally been known as retirement planning.  ThriveRetire™ is an engaging ongoing 8-step retirement planning process and investment management service that seeks to identify all risks, assets, tools, and tactics to develop an optimal retirement plan designed to support your ideal retirement lifestyle and goals to the fullest extent possible.  With every interaction, we seek to inform and serve, so our clients can safely trust their ThriveRetire™ plan and process, leaving each client with the confidence and peace of mind to live a vibrant and full life through retirement.

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Prior to founding Thrive Retirement Specialists, Tony spent eight years serving as the Chief Investment Officer of a firm where he provided advice and investment management services to over 600 individuals representing at the time over $1.5 billion of investments. Before this, Tony served as Vice President at J.P. Morgan Private Bank, where he advised high- and ultra-high net worth individuals on all matters of wealth, including investments, portfolio construction, portfolio management, and retirement planning.

Tony lives in Dearborn, Michigan, with his wife Dawn and daughters Emma and Anna.


  • BBA in Finance, Walsh College
  • MBA, University of Michigan, Ross School of Business


  • Chartered Financial Analyst (CFA)
  • Certified Financial Planner (CFP®)
  • Retirement Income Certified Professional (RICP®)


Prior to joining Thrive Retirement Specialists, Mike served as a Senior Financial Planner at an established comprehensive wealth management firm where he served high net worth clients and mentored the firm's financial planners.  Mike has served more than 240 high net worth individuals and families with aggregate investable assets of nearly $500 million by guiding all aspects of their financial well-being, including retirement planning, investments, tax planning, and goal clarification.

Mike lives in Detroit, Michigan.


  • Bachelor of Personal Financial Planning, Western Michigan University


  • Certified Financial Planner (CFP®)