NAPFA Advisor Features Aaron Rubin’s Take on Budgeting for Retirement

WRP Wealth Management’s Aaron Rubin is featured in the November issue of NAPFA Advisor, a publication of the National Association of Personal Financial Advisors. His article, titled “Budgeting: The (Often) Missing Step in Retirement Planning,” discusses the challenges of creating and maintaining a budget that supports clients’ retirement goals and offers tips for overcoming these obstacles.

Rubin explains that, generally speaking, clients tend to be either unaware of their actual spending or to substantially underestimate it. He discusses the challenge this presents for advisors, who are in the delicate position of determining their clients’ actual outflow and helping them view their habits in the cold light of reality.

Since it is likely the first time many have seen their spending laid out bare, they may not realize the magnitude of their decisions; this is often accompanied by a sense of embarrassment. Any criticism can be perceived as disapproval of lifestyle and personal values. For instance, a large DoorDash outlay could mean they value their time at home and don’t want to spend it cooking.

As a result, he emphasizes the need to take a sympathetic and nonjudgmental approach to reviewing their clients’ spending. He reflects that if clients feel shamed, they may abandon the planning process altogether, creating less favorable outcomes for themselves.

Rubin explains that after this hurdle has been overcome and the client is able to take an objective look at their current spending, the advisor and client should create a new budget that sets realistic expectations for their spending after retirement. This often includes decreased spending for things like transportation, clothing, and other business-related items and increased spending for things like travel and leisure activities. Additionally, advisors should stress test the new budget by altering variables such as assumed return, inflation, and unexpected expenses such as major medical or home repair costs.

Even after the budget is in place, it’s important to revisit it periodically to determine whether the assumptions that underlie it are still valid and to accommodate any shift that may have occurred in the client’s goals. Rubin recommends reevaluating a budget at least once per year to ensure it continues to make sense within evolving circumstances.

With the right pre-work and post-plan adjustments, clients can have the confidence they need to successfully retire with peace of mind. Just make sure [the plan includes] a reasonable budget with elements of conservatism. 

About Aaron Rubin

Aaron Rubin is an experienced financial advisor and a partner at WRP Wealth Management. With more than 20 years of experience in the financial industry, Rubin has built a reputation for providing comprehensive, personalized financial guidance for his clients.