Don’t base retirement planning on averages, says WSFS Bank’s chief wealth officer

A retirement Q&A with Jamie Hopkins

Jamie Hopkins is executive vice president and chief wealth officer at WSFS Bank and CEO of Bryn Mawr Trust Advisors, where he oversees the firm’s combined wealth businesses and focuses on advice strategies and growth. He also leads the institutional and personal trust businesses and specializes in retirement income planning, so we asked him about the smartest ways to prepare for retirement.

“The biggest retirement mistake I see is that people plan around averages. Averages are useful as a starting point, but your own plan has to be tailored to you. Put simply, if you rely on averages, you’ll be wrong half the time. That’s not a strong strategy. Make sure your plan reflects your spending, health, goals and lifestyle,” Hopkins says.

What is the most underrated retirement savings move people overlook?

“One of the most overlooked moves is raising your savings rate whenever your income rises. People often let spending grow with their paycheck, but setting aside even part of a raise or bonus for retirement can add up meaningfully over time,” Hopkins says.

If you could give one retirement tip, what would it be?

“Build flexibility into your plan. Retirement rarely turns out exactly as expected. Markets shift, taxes change, healthcare costs arise and family needs evolve. A strong retirement plan is not one that predicts everything perfectly. It is one that gives you room to adjust when life changes,” Hopkins says.

What retirement issue worries you most?

“The cost of long-term care. Living longer is a great thing, but it creates a very different planning challenge when retirement may last 25 or 30 years. Longevity can increase the chance that you will need long-term care. With nearly 70% of people needing some form of long-term care during their lives, along with fewer long-term care insurance sales, rising government debt and smaller family sizes, the risk of paying for care out of pocket is real,” Hopkins says.

If you were starting from scratch, what would you do?

“I would start right away, even if I could only save a small amount. I’d automate contributions and increase them over time. I’d take full advantage of any employer match and keep costs low while staying diversified. I’d also think early about tax diversification. Having money in different types of accounts can give you more options when it is time to create retirement income,” Hopkins says.

How should Social Security fit into a withdrawal strategy?

“Social Security should be one part of a broader retirement income plan. It is one of the few income sources many retirees have that lasts for life and adjusts for inflation, so when you claim it can have a major impact. In some cases, it makes sense to draw more from investments earlier in retirement so you can delay Social Security and lock in a larger benefit later. But that choice should be coordinated with taxes, portfolio withdrawals, life expectancy and a spouse’s needs. Still, with a funding shortfall ahead, it is reasonable to discount what you expect to receive in the future by 10% or 15%. Social Security is very unlikely to disappear, but it will need to change,” Hopkins says.

What retirement rule of thumb is outdated?

“The idea that you will spend the same amount every year in retirement. Many people use the 4% rule as a spending guide, which assumes a steady amount adjusted for inflation. But in reality, retirement spending often looks more like a smile. You may spend more early in retirement as you travel and stay active. That spending may ease later in inflation-adjusted terms as you slow down, though it could rise again near the end of life because of healthcare and long-term care costs,” Hopkins says.

What are the most common mistakes people make when claiming Social Security?

“The biggest mistake is treating Social Security as an age decision rather than a lifetime income decision. People often claim as soon as they are eligible without realizing how much a permanent reduction could affect them later. Married couples can also make claiming decisions separately when they should be looking at the household impact, including survivor benefits. Before filing, understand what you give up by claiming early and what you may gain by waiting,” Hopkins says.

What Social Security tips do you recommend most?

“First, check your Social Security earnings record before you are ready to retire. Your benefit is based on your earnings history, and you do not want to find an error when you are already filing. Second, married couples should treat Social Security as a household decision, especially because the higher earner’s benefit can affect the survivor benefit. Finally, do not assume claiming as soon as you are eligible is automatically the safest choice. For people who expect to live well into retirement and can afford to wait, delaying can be a powerful way to increase guaranteed lifetime income,” Hopkins says.