Are You Making Excuses For Not Speaking With A Financial Advisor?

Mia A. McFadden, CFP®

When I tell people I am a financial planner I can feel their anxiety. You would have thought I had put them under a hot lamp and started demanding they remunerate all their financial shortcomings. Meanwhile I’m just making chit chat at the local neighborhood BBQ. Yet a lot of people feel compelled to explain to me upon introduction why they don’t have a financial plan… “We really need to do some financial planning but…” Or I hear “We put money in our 401(k).   I’m pretty sure it’s enough…” Ah… procrastination. No judgement, no shame. Procrastination is common. It’s a survival instinct. We avoid things that cause us pain, or rather with financial planning, anxiety. And money makes people anxious. It means so much more than the paper it’s printed on. And the idea that somehow we already screwed it up by not saving enough, or don’t have the resources to start saving today, makes us push off financial planning until tomorrow when hopefully we can stomach looking at our financial position. Let me ease some of your fears when it comes to financial planning. I promise it does not have to be painful and can significantly improve your current and future outlook.  You can start planning at any age, earlier is better, but never is certainly worse. What follows are some of the most common reasons, by age group, that I hear for not contacting a financial planner. The questions that follow are for thought. You most likely don’t know the answers but instead of getting overwhelmed and pushing planning off for another day, consider finding yourself a Certified Financial PlannerTM, like myself, and starting the conversation.

Set Yourself Up Early

Often heard from the mouths of babes, “I don’t have anything, so there is nothing to plan”. Incorrect! What I wouldn’t give to go back in time and help some of my current retirees. I see so many missed opportunities. Most companies have a retirement plan available. Are you contributing? How much are you contributing? Are you contributing to the pre-tax portion or the Roth portion? How are you invested? If your company does not have a plan, have you set up your own plan such as an IRA, a Roth IRA or a solo 401(k)? Do you have debt? Can we plan to pay off this debt by adjusting the monthly payment or consolidating into a lower interest rate? Do you have a budget? It’s scary to sit down and look at where we are spending our money, but there are ways to trick ourselves into good budgeting behavior. Setting yourself up early on with a plan will allow you to accumulate assets in the long term. This is why many financial planners are happy to help younger clientele!

Working Years

Often heard from workers in their prime years, “I have a plan, it’s through my employer. They have great benefits.” That is not a financial plan. You are assuming whatever you are due to receive in retirement will be enough. Do you know what is enough? Do you know the exact dollar amount you need annually in retirement and how much you need to save to achieve that number? Have you thought about inflation? Are your company plan assets invested to provide you with a decent return? Is that rate of return enough to not only keep up with inflation but grow significantly beyond inflation? Will your retirement benefits last if you live beyond 90 years old? A financial plan can provide concrete answers to these questions. With those answers you can then plan how to achieve your goals.

Retirement Years

Often heard from retirees, “It’s too late. What I’ve saved is what I’m stuck living on and I no longer need a plan.” You do still need a plan. Do you know how much of your savings you can spend each year without running out?  Are you invested correctly for this time of your life? Even in retirement you have to achieve a certain amount of growth since this phase of life could last between 15 and 30 years. At the same time, as you take out income, you need to have funds in short term buckets where market fluctuations won’t have too much of an effect.   Are you distributing income from accounts in a tax efficient manner? Have you created estate documents such as Wills, Powers of Attorney or Heath Care Directives? Do you have the proper beneficiaries listed on life insurance and retirement accounts?

Cost Concerns

Then there is the fear of cost. This fear is generally felt whether you are young or old. You do not sit down with a financial planner and at the end of the initial conversation get presented with a bill. It does not happen. A good financial planner will explain all of the costs associated with their services to you. If you do not feel comfortable paying those costs, you walk away.

So contact a Certified Financial PlannerTM and make a plan. It can’t, and it won’t hurt. I have accepted I may never be the hit of the neighborhood BBQ with my particular brand of knowledge, but I can help you achieve your goals!