5 Needs of Money

5 Needs in Retirement




In 2009, I had a full day of appointments with people getting ready to retire from a local school board. My approach to my clients is simple, I ask questions. One of the questions I’ve always asked is, “What do you need from your investments?” On this day, I was in the middle of my fourth appointment and for the fourth time in a row I got back the answer “I don’t know.” And I realized that they knew what they did and didn’t want, but what they didn’t know is what the needs were. So I got up and did a simple breakdown of the different needs that people have in retirement and I asked the clients to tell me from 1-5 which were the most important and least important to them.


Ever since then, this has been an integral exercise we use for each one of our clients and at each one of our workshops and live events. It’s important for me as the advisor to know exactly what they do and do not want, but it’s equally as important for the client to understand what they want. Most people work 30+ years and are concerned with their job, their family, and their life, they save money because they know it’s important, but they don’t sit down to think about exactly what they’re trying to accomplish with those savings.


One thing I’ve learned from doing the 5 needs exercise is that everyone is unique. That’s one of the biggest problems I have with people who give blanket advice, whether it’s on television or through books or through selling the same product to everyone. They have to make their advice broad because their brand depends on it applying to as many people as it can.


Take this into consideration: If you list out from 1-5 the most important need to the least important need, there are 120 different variations. If you add in all other factors such as assets, family status, future income, age, health, etc., then there are more variations than atoms on earth. I know that thought can be overwhelming, but it doesn’t need to be. Just remember that you, your needs, and your circumstances are unique and you should consider that before taking blanket advice from anyone.


That’s why at Anders Retirement & Investment Advisors we take an approach that every client gets a tailored plan. We go into our appointments with no preconceived notions about products, needs, or expectations. Remember – the quality of the advice is only as good as the quality of the questions being asked.


So, if you haven’t already done this exercise, I want you to write down the 5 needs. Next to each one write from 1-5 (1 being the most important and 5 being the least important) what your needs are.


  • Stability/Preservation of Principal
  • Income
  • Death Benefit
  • Growth
  • Liquidity


If you’re married, you may even want to do these separately and see if they matchup. If they don’t, then maybe It’s time to have a discussion about what your needs are as a family.


If you don’t know what the definition of each need is, we put together a brief video explaining it, and we will get further in detail about each need in later posts.