Life is full of things to worry about, and a surveys show that two-thirds of people are more afraid of running out of money in retirement than they are of actually dying.  That may seem surprising, but it can be a real possibility – and therefore a very legitimate fear – if you haven’t planned properly.  Now, we assume you’ve done some planning.  If not, well, that’s the first place to start.  You need to put together a retirement plan;  don’t leave this to chance.  But assuming you have a plan, the trick is to make sure you’ve done it properly.  This episode covers ten preventative steps to help you avoid running out of money in retirement.

Parents and students all across the country continue to wonder how they are going to pay for college. Over the last thirty years, the cost of college has risen astronomically. Since 1987 we have had over a 500% increase in the cost of college tuition. In that same time frame, college tuition has risen at a rate 2.5x that of home prices, over 3x that of medium income, and 4x that of general inflation. Because of this, we often have parents who come to us wondering how they are going to afford the rising cost of college tuition. Luckily, there are numerous tools and loans available to help pay for college. Here is our suggested order of operations for how to pay for college.

Can you DIY your personal finances? By now, most of us are familiar with the term DIY or “do-it-yourself”.  The idea behind DIY is essentially that anyone can figure out how to do something by spending a few hours on YouTube or on the internet. We make our own home improvements, fill out our own taxes, and make our own car repairs.

• But what about the more complex situations?
• What if your home needed a serious paint job?
• What if your car needed to have its’ tires replaced?

There are some situations in which we could DIY our own projects, but the key difference comes down to the time and process involved in doing so. The same goes for your financial life and planning your financial future. You can certainly do it yourself or, you can consult a certified financial professional. The outcomes may be similar but again, it comes down to the time and process involved.

In this BenchTalk, we are going to help you decide whether you can DIY your finances or if you would be better served speaking with a financial professional.

One thing we do know for sure is that money is a necessity in our lives. Money helps us pay for where we live and put food on our table. For some, money is the end all be all and means everything to them. Others view money only as a means to accomplish other goals. It’s a wide spectrum and wherever you happen to fall on that spectrum one thing’s for sure, it’s incredibly important to plan your finances and be responsible for your money. This is where a financial planner can be invaluable. Financial planners help the client understand their situation, establish goals for the short-term and long-term, and develop and implement a plan to make sure they arrive where they need to be financially. Sure, you can DIY your finances by following the same basic formula. However, for most, it all boils down to three key components: time, ability, and desire.

These three things are absolutely necessary to DIY your financial future. If you have the time, the ability, and desire to DIY your finances then you are on the right track. But if you are lacking in even one of these areas, it might be time to consult a financial advisor. If you decide that you might need a financial advisor’s help, we encourage you to reach out. As always, we provide 100% independent and objective financial planning.

What is investing? We all hear about the great investors like Warren Buffett, Jack Bogle, and Benjamin Graham. Hollywood portrays these investors and the likes as shrewd investors who outsmarted the market. Investing can oftentimes seem like a difficult or foreign task when you hear these stories, but it doesn’t have to be. Here is the investment checklist that we look at before deciding if someone is ready to start investing. Read more at - https://firstfinancial.is/investment-checklist-step-one-got-cash-flow/. 

How much money do you make each month and how much are you spending? When we talk about investing, we are talking about putting money away for the long run. For this reason, it is crucial that we make sure that you have all of your current obligations met and that you don’t need to dip in and out of the money. The goal is to make sure that you have a positive cash flow each month.

Evaluating a financial situation will differ from person to person but the metrics we look at stay the same. What do you own? What is it worth? Do you have any liabilities? Credit card debt? These are just some of the metrics we use to determine where your money can best be used. Investing is important, but it is crucial to make sure that all other financial duties are met before investing.

Before jumping into the investment world, it is crucial that your financial foundation is sound. Emergency funds are an important part of this. Your rule of thumb typically is to have 3 to 6 months worth of expenses covered. Insurance is also important. Do you have the proper life insurance and health insurance in place? We want to make sure that a catastrophic event does not derail your financial plan.

If you can check all three of these boxes, you are ready to become an investor. At this point, it is important to have a game plan with goals, benchmarks, and a disciplined approach.

1. Cash Flow
2. Personal Financial Situation
3. Solid Foundation

The great Yogi Berra once said, “If you don’t know where you’re going, you will end up in a different place.” When planning for retirement, Yogi’s words are spot on. Today, instead of lecturing you on retirement we thought it would be easier to ask two main questions.

1. Are you saving enough for retirement today?
2. How much is enough?

Its important to know what you need to be earning on your retirement assets in the next 20, 30, or 40 years to ensure that you can retire comfortably and meet your goals. Navigating risk is important in retirement as well. What funds you will invest in. What insurance or long-term health care will you need and have when you reach retirement. What about taxes? What are you doing today to minimize your taxes in the future? These are all very important factors we all need to consider when planning for retirement.

A good retirement plan provides a roadmap that ensures you know where you are going, and that you will arrive at your destination safely.