What Events Inspire People to Get a Financial Plan

Last week I wrote about the excuses people sometimes have for not preparing for their financial futures. This week, let’s talk about the opposite – what inspires people to overcome the excuses and engage a professional to guide them toward their financial goals? No matter the trigger, people are looking to simplify their lives and for peace of mind. So, it is important to find a financial planning professional who has worked with people in circumstances similar to yours. Below are some of the issues our clients have faced that prompted them to seek our help:

1) Retirement is on the horizon

You’ve worked hard for a long time, maybe raised children and paid for college educations, bought and sold homes, saved in your employer’s retirement plan. Now – will I/we have enough to retire? You have a myriad of questions such as: When should we/I take Social Security? How do we/I take income from retirement plans? How do we/I save on taxes when doing so? Should my/our investments be different now than when we’re saving for the future?

The financial planning process helps answer these questions as well as addressing non-financial questions such as: What will you do for meaning and purpose during retirement? Are you ready to transition from saver to spender?

The best compliment we receive from clients is when they tell us that becoming clients has provided them with peace of mind. Their questions have been answered, they have a plan and someone is helping them implement it.

2) Divorce

Whether or not you had a financial plan when married, now that your life is transitioning to one income, it’s a good time to make sure you’re on track to still reach your financial goals. Although this is an extremely emotional time, even under the most amicable of divorces, a financial plan can provide clarity and peace of mind for your future. We work with you to help answer questions such as: How much money will I need NOW to maintain my lifestyle? What happens to my home? How will college educations be paid for? Do I change the investments in my retirement account now?

3) Marriage

Whether or not you had a financial plan when single, marriage is a good time to examine how your incomes and assets can work together. It’s also a good time to develop some goals jointly. Is one of you a spender and one a saver? Does one of you have debt? A plan can help avoid conflicts before it impacts the marriage. And, as always, how much should we save and how should we invest in order to reach financial freedom?

4) Received an inheritance

Whether or not this was expected, new wealth raises questions and also some challenges. A financial plan can address questions such as: Should I pay off my mortgage? Can I afford a vacation home? Are we on track for a comfortable retirement already so we treat this inheritance as a windfall? Or will this money help us close the gap on fully funding the retirement needs we have? A plan will help you make informed choices.

5) Recognize they need financial help

I struggled with what to title this category of client as it’s not that they are in financial trouble but that they just need help examining their current financial picture because they don’t have the time or the inclination to do it themselves. This is a large category. It’s not uncommon for people to have several accounts – current workplace retirement accounts, IRAs, after-tax investment accounts, accounts still at former employers – and not know how much they have accumulated and how it’s invested as a whole. It’s hard to evaluate whether you’re on track for retirement if you don’t know how much you have. Suffice it to say, if it takes longer than 30 minutes to develop a net worth statement for a lender, it’s time for a financial plan.

While people seek our help for different reasons, by far the common theme we hear from clients after they have a plan is “peace of mind.” And, with that, challenges at work seem more manageable, your relationship with your spouse or significant other can be less contentious and your golf handicap will automatically drop 10 strokes……..(results may vary).

Steve Byars