As people plan for retirement, one question looms large: How do you create a financially secure future that allows for a fulfilling and active lifestyle? For many, retirement is a time to travel, spend time with family, and enjoy hobbies. But how do you ensure that your finances can support these dreams?
We spoke with Nicholas Donato Jr., a Partner at Donato Financial Group for the past 21 years. The firm has been helping clients navigate financial planning for 50 years. Donato shared insights on how financial wellness is intricately connected to mental and physical health in retirement. He also discussed how his firm supports clients in achieving not only financial security but also peace of mind.
The Unique Market Conditions and Financial Wellness
According to Donato, we are currently in a unique financial environment, especially when it comes to interest rates and market volatility. “The market today offers a rare opportunity for people to upgrade older financial contracts and improve their investments,” he says. “But many advisors are complacent, not staying on top of these changes, and people don’t know that they could be improving their financial positions right now.”
For those nearing retirement or currently retired, Donato stresses the importance of understanding how interest rates and market trends affect their portfolios. “If the market has been delivering a high rate of return — like the 13% average we’ve seen in recent years — people get comfortable,” he explains. “But that could be changing. Industry experts predict stock market returns will slow to around 3% in the next decade.”
As costs of living continue to rise and inflation persists, Donato foresees more financial pressure on households in the coming years. “People are overly optimistic and complacent financially,” he warns. “That could lead to stress, especially as the cost of food, shelter, and everyday goods continues to climb. Without proper planning, this will create more pressure on people’s portfolios.”
Bringing Purpose to Money
At Donato Financial Group, the mission is to “bring purpose to people’s money for today, tomorrow, and everything in between.” As Donato explains, the goal isn’t just to save money, but to make it work for a fulfilling life. “A lot of times, I feel like I’m telling my clients to spend their money, rather than save it,” he says. This approach is especially relevant today, when many are focused not just on accumulating wealth, but on using it to enjoy experiences with family and friends.
“Ultimately, it’s about finding balance,” he says. “You don’t want to die with a pile of money that no one ever gets to enjoy. Life is about enjoying the moments — whether it’s traveling, sharing experiences with loved ones, or simply being able to afford the activities that contribute to a fulfilling retirement.”
The Role of Systematic Income in Financial Wellness
One of the key factors in achieving financial security during retirement is ensuring a predictable, guaranteed source of income. While many people think of annuities as a financial product best suited for the ultra-wealthy, Donato points out their importance for retirees seeking peace of mind.
“Annuities provide guaranteed income for life,” he says. “This ensures that no matter what happens with the stock market, your paycheck stays the same.” The idea of having a steady, dependable income stream allows retirees to continue enjoying their lives without the constant worry of whether they’ll outlive their savings.
It’s a concept that resonates deeply with clients. “We had clients who went through the 2008 financial crisis and the COVID-19 pandemic, and those who had annuities didn’t have to worry,” Donato adds. “Even when the markets crashed, they still received the same income. That peace of mind is invaluable.”
How Financial Security Enhances Mental and Physical Wellness
Beyond the tangible benefits of guaranteed income, Donato highlights the profound impact financial security can have on mental and physical well-being. “Money and health are the two biggest stressors in life,” he says. “When people are worried about their finances, it affects their relationships, their physical health, and their overall happiness.”
Retirees, in particular, are prone to anxiety about running out of money, which can lead to social isolation and a decline in mental health. “When people are financially secure, they can plan trips, go out with friends, and live more active, engaged lives,” he explains. “And that contributes to a longer, healthier life.”
Donato points to clients in their 90s who are still living active, engaged lives because they’ve planned their finances well and can afford to travel and enjoy time with family. “That’s the difference,” he says. “Financial security allows you to live a life that promotes your well-being.”
Transitioning Into Retirement: Managing Expectations
For many, transitioning from a busy working life to retirement can be mentally and emotionally challenging. Donato suggests that a “transitional retirement” approach can ease the process. “I’ve seen clients who have successfully moved into retirement by starting a small business or picking up a part-time job doing something they love,” he says. “It’s a great way to ease the transition and keep mentally engaged, which is important for overall wellness.”
By combining a sustainable income plan with fulfilling activities, retirees can enjoy a sense of purpose even after leaving their primary careers.
Planning for Retirement: It’s Never Too Early
While most people begin planning for retirement in their 50s, Donato stresses the importance of starting earlier. “Mid-40s is a good time to start getting educated on the tools and strategies that can help you achieve a successful retirement,” he advises. “The earlier you start, the more options you have to create a plan that works for you.”
Planning in your 40s or 50s also allows for flexibility. “When you start early, you have the time to put your retirement plan in place, understand your goals, and feel confident that you can achieve them,” he adds.
Women, Financial Wellness, and Seeking Help
An important theme that Donato returns to is the role of women in financial planning. Despite stereotypes that men are more financially savvy, he finds that women are often more proactive in seeking financial guidance. “My largest clients are women,” he shares. “They’re more open to learning and tend to make better decisions when it comes to managing money.”
Donato believes that women often take a more hands-on approach to their finances, ensuring they have a clear understanding of their financial plans. This, in turn, leads to greater financial security and peace of mind. “It’s important for women to ask questions and take charge of their financial well-being, especially in the event of an unexpected life change like the loss of a spouse,” he advises.
The Roadmap to a Fulfilling Retirement
At the core of Donato Financial Group’s philosophy is creating a clear financial roadmap that provides confidence and clarity. Donato emphasizes the importance of understanding what each investment is meant to accomplish. Whether it’s for vacations, healthcare, or leaving a legacy, creating a purpose for each “bucket” of money can help retirees navigate their financial future with confidence.
“The number one word that comes up in retirement planning is confidence,” he says. “It’s about understanding what you have, how it works, and how it will support your lifestyle. When people have clarity and confidence, they can retire comfortably and with peace of mind.”
For those planning their retirement, Donato recommends speaking with a financial advisor who can help create a comprehensive strategy for generating income, reducing stress, and making sure that financial goals align with personal values and priorities.
As we look ahead to the new year, it’s clear that financial wellness is integral to health and happiness, especially in retirement. With a well-thought-out plan, financial security can be the foundation of a fulfilling and healthy life, ensuring that every day in retirement is as enjoyable as it is rewarding.
Donato Financial Group
Address: 53 Broadway, Park Ridge, NJ 07656
Phone: (201) 505-0500
Website: donatofg.com