One of the big questions we all have in retirement is, do we have enough money to retire? And how do we ensure that it lasts? Join us as we walk through how to answer these important questions in this week's episode of Leibel on FIRE!
Why is it that it seems like every advisor has a different answer?
Shouldn't there just be. One answer one size fits most isn't retirement planning, isn't it just math? How is it that every advisor can seem to give a different answer?
Hmm...
When, you go to school to become an accountant, you'd like to think that every CPA learns the same material and that they have the same abilities, but anyone who has worked with multiple accountants can tell you...that simply isn't the case. Some are better than others. Often by wide margins.Some are more creative than others. Some are more knowledgeable than others. And when it comes to financial planning, where there are infinity more moving pieces than a tax return...isn't it a wonder that there is so much variance in ability.
Compounding the issue, we have an unknowable future! Will inflation continue? Will inflation be high? Will inflation be low? Will the stock market, return the same, nine 10% that it has historically done, at least in the United States, or is it gonna reduce, will you know? You got all kinds of questions. And the thing is, when it comes to financial planning, the answers to those questions are extremely important.And so everyone has their own perception. They've got their own filter, their own lens that they look through the world at. And when it comes to the question of, should you take social security early or late? What's happening in the market? What should you do? What should you know? Do you have even enough money saved for retirement? Those questions require a little bit of an art artist touch in answer.
Since we don't know what the future holds. Because there is no magical formula that we can plug-in and know the future. If there was a way to know the future, we would all be really wealthy. Oh but the future is unknown.And because it's unknown, we have to do the best that we can to protect ourselves and create a plan that, a plan really to, hope for the best, but plan for the worst. Every financial advisor has their own approach, they have their own take, they have their own solutions. Some are better at different stages in life than others. So it is no wonder why every financial advisor, every media outlet, every article you read seems to have a different answer, it is because there are lots of different answers and everyone's trying to figure out what the answer is and only time will tell time. Time and some good planning to help protect against being wrong.
How to Have Confidence In Your Financial Strategy
All this doubt and uncertainty of the future begs the question, "how do you have confidence?" How do you create a plan that doesn't keep you up at night, tossing and turning, wondering if you will run out of money in retirement?
The way I like to approach this problem of confidence, is through overwhelming firepower! I am a firm believer that no matter the financial decision, the choice needs to be obvious! It needs to be so overwhelmingly obvious that you feel like there is no other answer. And that's when you know that you have the right answer. That's when you have confidence in your financial decisions. The way we achieve this nirvana, is by sitting down and creating a plan. The plan needs to say, this is what we have a reasonable belief that our expenses are gonna be, what we're gonna do, and what the results of that are gonna be.
Your plan needs to anticipate, what if we're wrong! How do we protect ourselves? Think of your plan like an onion. You want to have layers of protection, so that no matter how wrong you are or how many things you missed, that your plan is still going to protect you.
Protect The EssentialsYou need to know that you're still gonna have a roof over your head, you're gonna have food on the table