For those of you who don't know what is involved in a comprehensive financial plan review, let me quickly share with you what this meeting looks like., AGENDA, Have a plain english discussion as to what has been happening in the markets to provide you with some clarity., Review what your accounts have been doing relative to what has been happening in the markets., Address any questions or concurs related to this., Review a plan progress report., This report will clearly show what you are on track for., This makes for a much better conversation., Review any planner areas of concerns., SIX - Address any client issues or concerns.
I am finding an interesting trend in these particular review meetings., Information is a powerful thing., We are finding that we are answering questions clients don't even know they had, but are glad to get the answers for., How has the recent economic activity affected my ability to meet my retirement goals?, Understanding that going forward - at least for the foreseeable future - traditional asset classes are going to be challenged to generate the returns required, what is the minimum required rate of return that I need to still be able to accomplish my financial goals?, Is there a chance that I could retire earlier?, Do I have enough in my nest egg to fund my whole retirement?, Knowledge eliminates fear and in this day and age, there seems to be a lot of undisclosed fear that is driving people to make bad decisions., It feels really good to have the technology available to be able to eliminate these fears for clients.
Why are you denying yourself during retirement?, This is probably the most common question I ask my retiree clients., So, why am I asking this question to my clients?, Because of my findings when I review a clients progress report., So, my hope is to share with you some of the trends that I am seeing with the hope that you will not make the same mistakes or make the same false assumptions., Clients are inherently afraid to spend right now. I guess this is human nature., But, when you review the progress of a financial plan a few times a year, it is hard for things to go off the rails., Through my analysis, I am able to determine the following:, I know what a clients Attainable Income is., This could be higher or lower than their current income., I know what a clients Attainable retirement age is., This could be higher or lower than their goal., I know what a clients Required rate of return is., I know exactly how much (if any) needs to be invested each year to accomplish their goal., All of this means we have a much better conversation so that clients can make better decisions about their financial planning., To be able to give them the freedom to spend with confidence., Now, what I am finding with my retiree clients is that they are afraid to spend their money., I get it. Market volatility can shell shock the best of us., It's a self-preservation attitude. Especially when you are retired., But, if you stay on top of the retirement income plan annually, you will be able to see warning signs, well in advance of problems., This allows you to "course correct" for success., Am I encouraging people to spend money then?, No, but, when the analysis indicates that your attainable retirement income is a lot higher than your actual income - I have the conversation., So now, ask yourself what you would do if your plan analysis indicated one or more of the following:, You could retire on more of an income., Would you?, You can retire earlier., Would you?, Your required rate of return is a lot lower than you think., Would you move to a more conservative portfolio?, Your annual savings requirement is lower than you are currently saving., Would you reduce your savings and spend more today?, These are all great questions to get answers to., Spend some time thinking about these questions - and then find yourself a financial planner who will help you have a better conversation., It is a shame to deny yourself when you don't have to., More often than not, my retiree clients are either writing me cheques to be deposited back into their accounts or, not requiring any more money be sent to them over and above their retirement pensions., So, in following the review meeting AGENDA I outlined earlier, I really hone in on a few items., The report clearly shows them how much of a Surplus they have., This is important because this is where the confidence comes from., If you knew that you had a surplus, you would then want to know the answers to the following questions:, How much income could I then take each year without risking running out of money?, How do things differ with my situation if I decide to sell my house and rent or downsize?, The bottom line is - you can't take it with you., But so many people do., This is worrisome to me., They do so because in my opinion, they don't have enough information to provide them with the confidence and permission to spend their money in retirement., It's good to have a conversation that outlines for you in black and white the following:, What you can spend in retirement, How much you could give away to your children now, during your lifetime, so you can see them enjoy the funds., What the approximate tax bill is when the final spouse dies - in other words, how much is lost to taxation., What options you could consider to help minimize this heavy taxation that takes place on death., Gifting., Estate freeze, Tax free life insurance proceeds, Don't overlook your health., I would recommend to everyone that when you retire, or even prior to retirement - heck, do this now..., Go and get a complete executive physical., Not a physical that takes you 30 min. from your GP., A full executive physical., Affinity Health, Medcan, Eyes., Ears., Nose., Throat, Fitness, Heart, Blood, Nutrition, Stress tests, Lifestyle, Family history, and the list goes on..., Plan for when you don't have your health., Living benefits., Spend for when you do... Don't Deny Yourself., Do the math. Have the financial planning conversations., Financial planning is so much more than investing., Financial planning is the key, it always has been and always will be.