When I tell people I’m a financial planner, one of the more common follow up questions I get is . . .What does a financial planner actually do? Fair question! Over the next few months, I’m going to introduce you to 4 typical clients that we work with, what that process looks like and how we tailor individual financial plans to the unique challenges that each individual, family or business may face.
Meet Mary and Marty Midlife
I received an email from a client telling me he had a friend named Marty who really wanted to sit down with me and go through the same financial process that he had just experienced. Marty’s wife Mary had just switched jobs so they needed help with her new benefits and what they should choose. They weren’t sure what to do with Mary’s old 401K, and they had been wanting to figure out if they were on track for college savings but just weren’t sure where to start. Always appreciative of being recommended by a current client and friend, I called Mary immediately. Very soon I heard a familiar problem -- When would we find time that works for everyone?
Monday night? Nope, Marty and Mary’s daughter had gymnastics and their son had basketball so they would both be on the road.
Wednesday afternoon? Nope Mary was in a mandatory 2-day training for her new job.
Friday? Sorry my son has a baseball tournament in NY this weekend and we are leaving first thing Friday morning
A family with 2 working parents and 1 or more active children tends to be the norm these days. When you add in the fact that we planners have families and commitments as well, scheduling can be a challenge. Unfortunately, time constraints seem to be one of the main reasons people never actually sit down to do any planning. Time is hard to find, and they aren’t sure where to start. I can promise you this, we always find the time to make our meeting work and, fortunately, because of technology we can always have the meeting virtually. Having said that, it’s our preference that we ALWAYS meet in-person in the early stages of our process to ensure that the fit is right for both the client and for us as we expect the financial planning relationship to last our lifetimes.
In a family like the Midlife’s, these are the questions we often hear:
I just got a new job and I’m not sure which benefits to take or what to do with my old 401K?
Speaking of my 401K, am I on track with my retirement savings?
How much should I have saved for college? Are people really trying to pay for all their kids’ college expenses?
Do I have enough life insurance?
Do these questions sound familiar? Here is my answer for those of you like the Midlife’s: I’m not sure. Let’s look at what you’re doing. That’s exactly what we did with The Midlife’s.
One of the most important steps in the financial planning process is to gather as much information as possible. How much money is coming in, how is it being spent, where is it being spent? What are the primary goals for you as parents? Is paying for Tim’s college more important to you than saving for retirement?
We all have a finite amount of dollars to spend. By gathering that information about your assets, working together to set and, more importantly, prioritize your goals, we can start to decipher if the savings is actually going to the places that will most efficiently help you achieve those goals.
After my meeting with the Midlife’s they realized they had 3 primary goals they needed to get started on immediately. They also wanted to set a stretch goal of purchasing a vacation home within 5 years.
1. Help Mary with her benefit selections
2. Analyze their current retirement savings and get them on track to retire at 67 with the same income they are making today
3. Institute an alternative savings plan in order to contribute $15K per year per child for school
4. Purchase a vacation/retirement home in Myrtle Beach
I don’t want to bore you with all the details of exactly where each penny for the Midlife’s went in order to work towards the goals we set. What’s important to understand is that there are so many of us in the same position as the Midlife’s, myself and my partner Dan Wilson included.
To go back to the opening question I mentioned at the beginning, you just got a snapshot of what a financial planner actually does. I think there is a common misconception that we are sitting in front of a computer screen buying and selling stock all day. While that does happen, the bulk of our time is spent meeting with people like the Midlife’s….getting to know them, getting to know their families, talking through issues and fears, helping people prioritize their financial goals and most importantly, helping them achieve those goals.
If you feel like you’re facing the same challenges as the Midlife’s or if what I’ve written reminds you of someone in your life we are happy to help. Even if it’s just picking up the phone for a quick chat.
Stay tuned for our next meeting with Nick and Nancy Newbie. . .