Since high-net-worth retirement planning can be complicated, you need to develop a strategy that ensures your lifestyle will remain intact long after you stop working.

What is Net Worth?

Net worth is the number of assets that a person owns minus their debts. Those who are considered to be of high-net-worth typically have more than $1 million in liquid financial assets.

3 Smart Ways to Approach Retirement Planning

1)      Limit High-Risk Investments

As you get older, you should think about developing a more conservative investment strategy, which does not include investments in hedge funds, private equity or venture capital.

In addition to maxing out your 401(k) contributions, invest in other less volatile income-generating assets. These could include residential rental property, commercial property, private lending or businesses.

Whichever investment vehicle you choose, diversification is the best way to protect your money.

2)      Create a Long-Term Cash Distribution Plan

As you begin retirement planning, you should outline your goals and future plans. Since your financial reserves will likely need to last many years, it is smart to prioritize big expenditures, such as:

• A second home
• Extensive travel
• Leisure activities
• Health care
• Asset transfers

Any projections of how much money you may need during your golden years should take into account your life expectancy. Since many people live into their eighties today, also consider postponing your Social Security benefit until you turn 70.

3)      Liability and Asset Protection

In personal financial planning, it’s crucial to develop a liability and asset protection plan that insures your activities as well as your estate.

First, it will help to be aware of everything that poses a substantial risk, including:

• Hobbies, such as skiing or boating
• Collectibles, like fine art
• Family activities
• Board memberships
• Volunteer activities

Many high-net-worth individuals enroll in umbrella liability policies to insure against losses associated with these and other risks.

Whether you are retiring tomorrow or years from now, developing comprehensive retirement planning strategies is a smart way to protect the lifestyle you have come to expect.