How important is your retirement income plan? It is paramount.
A retirement income plan is not just a projection of numbers showing you are okay to retire. Many investment advisors can look at your portfolio, know roughly what you live on now, and do a projection to see if you have enough for retirement or if you need to save more. The problem is that this does not address the many pivotal decisions you need to make at this important stage of life. It also does not make you feel like you can retire with your investment manager saying you can. You need to SEE it and fully understand all aspects of what you are headed into. Investment management and financial planning are completely different areas of expertise. I do not manage client’s investments for that very reason.
Retirement income planning is a process that you need to go through to address the different areas of your life and finances. Attempting to do this on your own is not recommended as there are normally blind spots that you are unaware of. You don’t know what you don’t know! I have watched over the years many clients that have attempted to do this on their own, only to realize they should have a professional look at it that deals with this every day, not just once in a lifetime. I have seen how they think about it and try to make calculations. If they only relied on their calculations, their quality of life would have suffered for many reasons and these are highly educated, intelligent people. This is why I can say with confidence that having the right professional help with your retirement plan will significantly improve the quality of your life.
I went into this area of expertise partly because I love strategizing, but also because I saw this as such an important stage that no one was addressing in the best way possible. The Fee-Only/Advice Only model allows you to receive unbiased advice. Truly fee-only financial planners are only compensated by the fees that you pay for the planning. They do not receive any compensation from commissions or referral fees. This gives you a greater sense of trust in the advice you receive because you know it is truly unbiased advice. The financial planner can focus on only what is best for you as there is no pressure to generate additional revenue from you. I go one step further. Many fee-only financial planners find clients and want to build up a client base to work with the same clients over time. This means they will be focused on creating a structure, subscription, retainer, or some other model to have you continue to come back on a regular basis. This is helpful to clients to stay on track over time. While I do offer clients the option of returning for an update or check in, and I may have a limited number of ongoing clients, my model is to create a plan that if you never came back, you would still be better off after having gone through the process and the learning that takes place. You are armed with the knowledge necessary to know when a check in might be needed. For me, I want to keep doing the comprehensive retirement income plans for clients and take them through my process. I enjoy new situations and watching people go from extreme worry to total confidence in their future. The other benefit to clients is that I gain much more financial planning experience because I am continually meeting new clients with different complexities, and taking them through my process. Other financial planners have even said to me “But Marlene! That is the hard part!”. They view getting a new client and doing a comprehensive financial plan as the hard part, but my view is that it is the best and most fun part!
Now let’s talk about price…or is it investment? The way I look at is that you pay for something of paramount importance in your life. You may not be sure what you are headed into fully, but when you move forward, you will be astonished at the value you receive. One of the things I look for are blind spots. What if you could receive money, but you don’t know that it is available? What if you missed something important on your taxes? What if there is a strategy that you could use that could create or save you thousands, tens of thousands, or hundreds of thousands of dollars? This happens!
What if you had very little funds to work with and you make that decision to hire me and I find you over $100K that you would not have had otherwise? These don’t happen with each situation, but they do happen on a regular basis with my work. I don’t have any idea of who it is going to happen to, but I am always thrilled when it does. It can make such a difference and we are only speaking of blind spots! That is not considering all of the other aspects of the planning process that save money and change lives for the better.
The decisions you make at this stage of life, whether you continue to work or not, are going to determine the quality of your life now and in the future. You go through this life transition once, you are worth it to spend whatever you need to, to make sure you are taken care of and have the highest quality of life possible.
