You have goals you want to accomplish based on your values and motivations. As your life changes over time, these goals can evolve. But there are three goals that, regardless of your life stage, every financial strategy should address.

1. Retirement. Encore. Second career. Next chapter. No matter how you define it, you likely want to retire someday. And depending on where you are in life, there are steps to take to help ensure your retirement aligns with how you define it.

  • Preparing for retirement – Retirement may be just a dream at this point – and you may be rich on dreams but short on finances. But you do have one valuable asset: time. Even with other financial obligations, saving for retirement should be a priority. As this table shows, every little bit helps, particularly when you have time on your side.

Source: Edward Jones.

This hypothetical example shows the effects of time, money and return rate on a portfolio's value and potential annual retirement income. Saving $450 per month for 30 years with a 6% return per year would yield a portfolio value of $450,000 and potential annual retirement income of $18,000. Saving an extra five years increases the portfolio's value to $640,000 and the annual retirement income to $18,000. Saving either $100 more per month or earning a 1% higher return increases the portfolio's value to $550,000 and the annual retirement income to $22,000. Doing all three actions – saving an extra five years, saving $100 more per month and earning a 7% return – increases the portfolio's value to $990,000 and the annual retirement income to $39,600. This hypothetical example is for illustrative purposes only and does not reflect the performance of a specific investment. Retirement income is based on a 4% initial withdrawal rate. Portfolio value is rounded to the nearest $5,000.


  • Transitioning to retirement – Your vision of retirement may be getting clearer as the date draws closer, and your strategy should also become more detailed. What you plan to do in retirement helps determine how much money you may need and what steps you can take to reach this goal. If you’re behind, you can still work to catch up. And don’t forget to prepare mentally for retirement. In our experience, those who transition well are those who have thought about how they could define themselves and their purpose in retirement.
  • Living in retirement – Once you’ve retired, your financial advisor can help make sure you can stay retired. Your strategy should focus on ensuring your money lasts as long as you need it. This includes a sustainable withdrawal rate that can provide for your needs while handling the inevitable ups and downs in the markets. You’ll want to be able to cover key expenses such as health care. And as your goals change in retirement – perhaps to thinking about your legacy – your strategy can adapt as well.

2. Preparing for the unexpected. If the past year taught us anything, it’s that we should expect the unexpected. You know there will be surprises that can pull you off course. Even though you can’t predict the future, you can still prepare for it. The key is to develop a strategy that not only addresses what you hope to accomplish but protects you whenever the unexpected occurs.

  • Emergency fund – If you’re preparing for retirement, we recommend targeting three to six months’ worth of living expenses. If you’re retired, aim for at least one to two months’ worth of living expenses for emergencies, supplemented by about a year’s worth of income needs from your portfolio in cash to cover your day-to-day expenses.
  • Life insurance – Insurance can play a key role, particularly if others are relying on your income. We use the acronym LIFE (Liabilities, Income needs, Final expenses, Education) to help determine how much insurance may be appropriate.*
  • Preparing over time – How you safeguard your strategy will evolve. Your insurance needs will change along with the goals you want to protect. You might want to provide for your family, then provide “income insurance” for your retirement needs or develop a strategy to cover potential health care costs.

3. Estate/legacy. Isn’t estate and legacy planning for later in life? And isn’t it only for the wealthy? The short answer to both is “no.” An estate strategy gives you control over decisions if you’re no longer able to make them yourself, such as if you become incapacitated.

  • The essentials – An estate strategy should include beneficiary designations (and maybe transfer on death, or TOD, designations) on your financial accounts, a will (which can name a guardian for your children) and key documents such as a durable power of attorney, health care directives and a living will. For more control, you may want to consider trusts as part of your strategy. Your attorney can help you decide what’s right for you.
  • Your legacy strategy – What do you want your legacy to be? Are there certain causes you want to support or life lessons you want to pass along? You also can structure your legacy to pass it along over your lifetime rather than after you’re gone.

Lifetime – and over time

Your goals will evolve over time, and there may be many that come and go throughout your lifetime. But these three goals should always be part of your strategy. Your financial advisor can be an important guide along the way, helping to make sure you have a strategy that is aligned with what’s most important to you.


Scott Thoma

Scott Thoma co-chairs Edward Jones’ Investment Policy Committee and is responsible for Client Needs Research, the team that develops and communicates advice and guidance for client needs, including retirement, education, preparing for the unexpected and leaving a legacy.

He is a CFA® charterholder and a member of the CFA Institute and the CFA Society of St. Louis. Scott also earned the CFP® professional designation. He graduated summa cum laude from Southern Illinois University-Edwardsville with a bachelor’s degree in business administration, with an emphasis in finance. Scott earned a master’s degree in economics and finance from the same university.

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Important information:

*Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C. California Insurance License OC24309