This month I wrote about the anxiety many people feel towards their financial future. I shared that most families don’t have much of a plan and worry about things out of ignorance. With a plan in place, a family knows where they stand and what’s reasonable to make things better. While they might not like the look of the numbers, at least the anxiety of the unknown is off the table.
What’s amazing to me is how much the press focuses on investment rate of returns. To have a channel on TV that shows stock quotes all day, has segments like “Fast Money” and hosts who ask their guest “where are you putting your money today?” is so delinked from most families situations it’s ridiculous. Whether Apple goes up by 20 or down by 50 in any given day doesn’t matter one iota to most families compared to how they choose to pay for their house, where they save for retirement, or how they pay for the kids college.
For clients of Westface Financial, we have created your high level financial forecast via our computer financial forecasting software. We demonstrated your current position, and then shared what would happen if you increased your savings, your rates of return, your retirement age, and then what it would look like if you simply lived on less during retirement.
Most of you went on to have us build your detailed financial forecast using our detailed program which considers many more variables. This model builds your forecast year by year, asset by asset, to forecast the future and show the impacts of various strategies and tax treatments over time.
As many of you know, I’m a national instructor to other financial advisors on how to operate the complex forecasting software and how to discuss with clients the results. As such, I not only see our client’s financial forecasts, but also hundreds of other forecasts as well.
It’s clear to me that most families could benefit tremendously from seeing their finances in detail. So many things become obvious. Things like 15 versus 30 year mortgages, brokerage account returns being taxed year in and year out at high marginal tax rates, how assets interact with insurance coverage’s, retirement distribution account prioritization, and so much more.
If you feel that your forecast could use some updating, just give us a call and we can re-run the numbers and make sure you’re being efficient with your money as you prepare for the day when you will be living off your retirement nest egg.
Written by Mark Guthrie
Principal – Westface Financial and Insurance Services
Mark Guthrie is a Registered Representative offering Securities through The O.N. Equity Sales Company, Member FINRA/SIPC , One Financial Way, Cincinnati, Ohio 45242 (513) 794-6794.
Investment advisory services offered by Mark Guthrie through O.N. Investment Management Company.
Tax and/or legal advice is not offered by Mark Guthrie. Please consult with your tax professional for additional guidance regarding tax-related matters.