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Setting Up a Retirement Fund as a High-Net-Worth Individual

setting up a retirement fund

Upon your retirement, you will likely have a reduced income as you say goodbye to employment earnings. It is therefore important to work out how much you will need in retirement savings to have a comfortable retirement.

But how much is enough? Everyone’s answer will be different, especially if you are fortunate enough to be considered High-Net-Worth (HNW) individual. Higher-income and greater assets require more complex retirement planning with more options and decisions to be made.

For HNW individuals, the focus for retirement tends to be less on financial security and more on managing investments, tax planning, cash flow, wealth transfer, and charitable endeavors.

With proper advance planning, you can establish the foundation for the desired standard of living, lifestyle, wealth transfer, and legacy you want to achieve in retirement.

Set Your Goals – Make a Plan

The amount of retirement income you will need and the savings/investment plan you should establish will be determined by your retirement goals. As a HNW individual, your retirement goals may include extensive travel, a vacation property in a tropical climate or even starting a new business. Only after setting your goals can you establish an effective and focused retirement plan.

Plan Your Cash Flow

In retirement you will need to replace your former employment earnings with cash flow from other sources. As a HNW individual, you are most likely in a high-paying job or own your own business. You need to establish what your spending needs will be for retirement and the cost of the lifestyle you wish to enjoy.

Accordingly, while planning for retirement, you should divert as much of your employment income as possible to your investment accounts and maximize your allocations to tax-advantaged savings programs to achieve your retirement needs. Once you have retired, you may want to focus your investments on income-generating assets (dividend-paying stocks, REITs, etc.) that will fund your lifestyle with minimum impingement on your principal savings.

Tax planning strategies are also crucial to maximizing your wealth accumulation and cash flow.

Establish a Contingency Fund

As early as possible in your planning process you should allocate assets to an emergency (contingency) fund. These assets should be highly liquid and available for your immediate cash flow needs in the instance of a sudden emergency, so that you do not have to sell assets from your longer-term investment funds that are intended for your retirement.

A contingency fund will provide you with peace of mind both now and in your retirement.

Create an Estate Plan

It is also important to consider what happens to your assets and legacy when you’re gone. An estate plan specifies how your assets will be distributed upon your death.

As a HNW individual, your needs will most likely be greater than can be covered by a standard will. You may want to establish trusts for your beneficiaries for tax and probate advantages, distribute assets over an extended time period rather than lump-sum, and allocate assets to continue support of philanthropic causes, as well as any other specific legacy wishes.

Obtain Retirement Planning Expertise

Planning for retirement can be a complicated and extensive process. As a HNW individual, your retirement planning is likely even more complex and will require even greater planning efforts. Your retirement plan can be optimized by employing the expertise of a financial professional who can customize a plan to your specific financial position and retirement goals.

For over 38 years, Bloom Investment Counsel has specialized in one thing: investing in income-generating investments, specifically dividend-paying stocks. In addition to growth from investing in the stock market, dividend-paying stocks can help you generate income, which can be particularly helpful during your retirement years by providing a steady-stream of cash flow. We would be pleased to work with you and/or your other financial partners to share our expertise and help you make informed investment decisions helping you achieve a worry-free retirement. Call us at 416-861-9941 or email us at

This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.

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