This is the question I most often get from clients. I spend half of my time helping them define what “on track” actually means, which is largely a function of how they plan to live. Will there be enough resources?
Enough is a very relative term, so I help my clients determine what they’re most likely going to need in retirement based on what they are spending currently. This job is usually part detective, part financial planner, part therapist.
Helping clients determine where their proverbial financial train is headed, when they want to board, and how they’d like to travel are all crucial elements in determining if they are, in fact, on track.
My purpose in life is to provide people with ideas, suggestions, and alternatives to improve their financial situation, or, at the very least, a confirmation that they’re doing okay.
The best part of my job is when I get to deliver the good news: a confirmation that they are, in fact, on track.
There are cases, though, when I have to deliver the bad news: One element of their financial train trip must be changed (date of departure, manner of traveling, destination). I never leave my clients without hope…let me be very clear about this: There is always something you can do about it. It may not be easy, but you always have choices.
So what are these choices?
You could save more (sorry to state the obvious), invest more aggressively (if your stomach can handle it), delay your retirement date, delay taking Social Security, plan to work part-time in retirement (many people now wish to call “retirement” a “work optional” period), sell your home, reduce your future living expenses and so on. None of these necessarily require the help of a financial planner, but it does seem to help to have an objective person guiding you through the emotions you are undeniably going to feel when faced with these less-than-appealing options. (I’ve only seen a full-on tantrum once in my career.)
What a financial planner can do is help determine what “on track” means and how close you are, based on several assumptions (that may or may not bear out!) to being on it. You can help your planner along by providing lots of information – not only about your assets, liabilities and expenses but about your dreams and fears and values.
What I’ve come to realize in my almost 19 years in this business is that people just want to feel safe. I tell you, a financial plan is a tool that can help foster a sense of safety and security but at the end of the day, it’s only numbers on paper. Numbers on paper cannot provide safety; you must develop a sense of resiliency and resourcefulness in order to ride out whatever storm the future may bring; financial or otherwise.
Life is about the journey, after all, not the destination.
Photos courtesy of ClipArt.