You’ve been told by media and advisors for years that you need to ramp up savings to secure your financial future. But sometimes, and more often than you’d think, people focus too much on tomorrow and not enough on today.
Let me tell you a quick story about a client. Bob and Sue (I made that up) have 2.3 million in assets saved for retirement. They have three adult kids. Bob continues to work full time at a large company. Sue continues to consult after having left a large firm five years ago. Right now, income isn’t an issue for Bob and Sue, but they are concerned about not having enough to maintain a nice lifestyle later on. They are also worried about helping their kids now, especially with real estate prices becoming a larger portion of people’s incomes. With housing prices set to continue to rise, Bob and Sue have contemplated helping their kids, but they feel handcuffed.
As their financial advisor, I know what’s going on in my clients’ lives because I never stop asking. And when I ask, I’m looking for real information versus just striking up conversation. I care about my clients’ lives, but when I ask questions, it’s usually calculated — and for their benefit. So it wasn’t a surprise to Bob and Sue when I came back to them with some options, even though they hadn’t asked me.
I ran some conservative projections and determined that if Bob worked an extra 18 months, they could comfortably give their kids $200,000 each to make significant down payments on their homes. It may not be what everyone would do with that money, but it was what was important to them. Of course, we found the most efficient way to make this happen.
We helped Bob and Sue focus on today and tomorrow, and it made them happy and much less worried about not being able to help their kids out when their kids need it most.
Bob and Sue knew what they wanted their life to look like and understood the possible tradeoffs that inevitably come into play when making financial and life decisions. Together, we were able to determine the best outcome for their situation.
What does Your Now and Your Tomorrow look like?
|Your Now||Vs||Your Tomorrow|
|Buying your kids a house||Vs||Lighter inheritance for your kids.|
|Epic trip planned for next year||Vs||Smaller house later.|
|Owning a luxury used car.||Vs||Better long-term care protection.|
|New dream business/career, more fun, more pay.||Vs||Delayed retirement date.|
|Having a more flexible role at work with less pay.||Vs||2,000 hours more with loved ones at the cottage.|