As we enter the summer months, most of us will likely be spending some time around the pool, grilling on the patio with friends, or hitting the road for a family vacation. For those taking a road trip, you likely have chosen a fun destination and have maybe planned some sightseeing along the way. If anything, you’ve planned your route or will put it into your phone to guide you.
Planning for retirement is similar. And like a fun summer vacation, a long and enjoyable retirement is something that most strive for. Retirement can look different for everyone. For you, it might mean being able to enjoy traveling with loved ones, enjoy old or new hobbies, or spending more time with family. I think most would agree that this sounds great, especially if money isn’t a worry. But retirement doesn’t begin the moment you log off for the final time. Retirement should start years (decades for most) before with diligent planning and saving. This starts with a financial plan.
A financial plan serves as the roadmap to an enjoyable retirement and is the foundation upon which financial independence is built. Taking time to create a financial plan and to define your goals will help provide clarity for the journey ahead.
Starting your route
Like all journeys, your voyage begins at the starting point. The starting point takes into consideration everything that you have packed for the road ahead. Don’t worry if something is missing, there are always rest stops along the way. Knowing the base facts is essential to mapping out the best route towards your retirement goals. These facts include savings, investments, income/expenses, liabilities and much more. Bringing these data points together creates coordinates for where your journey begins.
The second map point is your arrival destination. This includes living expenses, gifting, travel, and other goals. Some will have landmarks that will be incorporated into their journey. Expenses such as funding a child’s/grandchild’s education, purchasing a second home, or saving for a wedding are a few examples. These can all be programmed within your financial plan’s GPS and monitored as you enter the on-ramp of your financial freeway.
Pack your Bags!
Now that you know where you’re going and the stops along the way, it’s time to equip yourself with the essentials you’ll need.
Your investment portfolio will be the retirement vehicle taking you to your destination. These vehicles come in all shapes and sizes. Some will handle bumpy roads in the market better than others, so it is important to understand its characteristics before you and any passengers become car sick. Your vehicle might not look the same as your neighbors, as you each have different roads and goals in sight. Pairing your ability to manage market fluctuations with the financial plan will provide valuable information in selecting the best vehicle for you.
Any well-prepared traveler also packs essentials in the event of an emergency. A financial plan will bring to light any hazards that might present themselves as you travel. Thorough planning can mitigate any unforeseen risks on the road. Proper estate planning and insurance (life & property/casualty) is essential to ensure you’re able to keep moving forward should disaster strike. By recognizing these areas of concern ahead of time, you’ll be financially prepared to handle any obstacles.
It is important to pullover and stop every now and then to make sure you’re still on track towards your destination. Perhaps you’re ahead of schedule, or maybe behind, measuring where you are along the way is important to see if any adjustments need to be made. In some cases, your destination may have changed altogether. Sitting down to update your financial plan is essential to making sure your investment vehicle and new plan are working together and progressing towards your new goal. What was once an appropriate asset allocation may no longer be. Not only do plans change over time, but so do market conditions. Another important reason to revisit, review and restructure if needed.
Life is a Highway
Our lives are filled with twists and turns along the way…..sometimes when we least expect it. Financial independence looks different for everyone. Having a financial plan gives you a roadmap to guide you and create measurable goals to compare against along the way. Your financial plan should be a dynamic measuring stick that allows you to adjust when things change.
It should be a comprehensive analysis of where you are currently and where you want to be.
Now is a great time to revisit and update your financial plan if you haven’t recently. Or, if you haven’t mapped out your retirement goals yet, why continue to wait! Please reach out to our team to schedule a review or meeting to connect the dots of your financial goals today.
The views expressed herein are of Jack Faerber on June 12, 2023 and are subject to change at any time based on market or other conditions, as are statements of financial market trends, which are based on current market conditions. This information is provided as a service to clients and friends of Kavar Capital Partners, LLC solely for their own use and information. The information provided is for general informational purposes only and should not be considered an individualized recommendation of any particular security, strategy or investment product, and should not be construed as, investment, legal or tax advice. Past performance does not ensure future results. Kavar Capital Partners, LLC makes no warranties with regard to the information or results obtained by its use and disclaims any liability arising out of your use of, or reliance on, the information. The information is subject to change and, although based on information that Kavar Capital Partners, LLC considers reliable, it is not guaranteed as to accuracy or completeness. This information may become outdated and we are not obligated to update any information or opinions contained herein. Articles may not necessarily reflect the investment position or the strategies of our firm.