Three Financial Questions Everyone is Asking
By Tanner Doudna
Throughout our years of serving clients, we have helped people with many different questions they have. From which credit card to pay off first, to planning a legacy for their grandchildren and everything in between. While every financial situation is unique, we have found that there are three main questions that everyone wants to know: How much is enough? Will I ever have enough? Will it continue to be enough?
1) How much is enough?
The answer to this question is going to be different for every person. While it could be asked by someone saving for college, trying to get adequate cash reserves, or many other life priorities, most people will be wondering how much is enough to fund their retirement? Consider this: How much do you need to meet your lifestyle requirements? Some people want to travel the world, some want to buy their dream boat, some want to save every penny for their heirs. A few factors you should think through are: How will your life change when you stop working? What kind of retirement income will you be receiving and will it keep up with inflation? How will your investments perform? What happens if you or your spouse’s health declines? It is best to project numbers conservatively and frequently review and revise your plan with your advisor.
2) Will I ever have enough?
Once you can get a good idea of how much is enough, the natural question is can you get there? A rule of thumb is to annually save 15% of your income towards retirement during your working years. Try to have a long-term perspective when making decisions including your investment approach. Don’t just count on Social Security to fund your retirement, but understand it is realistic that you will at least get some benefits from it. Following our five core financial planning principles can help you get to where you need to be.
3) Will it continue to be enough?
Once you’ve reached your savings goal, you want to know it will last as long as you need it to. One saying to remember is that sometimes the best offense is a good defense. If you can, scale back your investment risk to protect your principle while still growing it enough to fund your long-term goals. Make sure you are properly insured with home, auto, health & life. Consider an umbrella insurance policy as a relatively cheap way to have extra protection. Try to be flexible as the times change and remember the successful choices and actions that got you where you are now.
These three questions are commonly asked because they are so difficult to answer with certainty. We are here to help you increase the probability of you reaching your financial goals and purpose.
