A few days ago I happily stumbled upon an inspiring article in The New York Times, The Moral Bucket List. (If you haven’t already seen it, I highly recommend taking 10 minutes out of your day to read this lovely piece about common and uncommon paths to moral and spiritual richness.) The article’s message got me thinking about what I do for my clients, and how I can help support each individual’s personal journey. After all, my goal isn’t just to help you build and protect your assets—it’s also to leverage that financial stability to help you live your ideal life.
One way I do this is by exploring the three goals of financial security, an exercise I did recently for Candice. In her mid-60s, Candice works in a job that she loves (it’s a true “get to” for her), and she’s done a great job at saving throughout her career. Yet she still worries about outliving her money. To increase her financial confidence, we looked at these three goals and how they can help her achieve her own ideal life:
Goal #1: Create a reliable cash flow
Goal #2: Maintain a nice lifestyle
Goal #3: Make your wishes come true
We began by looking at goal #1 to ensure she had a financial “floor” in place—the foundation to satisfy her basic needs. Even though Candice doesn’t plan to retire any time soon, at her age an unplanned early retirement could happen, and she needs to be prepared for that. I created a cash-flow chart to illustrate how long her assets would last even if she stopped working today. We looked at her distribution options, her Social Security income (assuming she waited to claim until age 70), and her current debt. Once we finished the exercise, it became clear that she has a solid “floor” in place. Confident of that reliable income, Candice knows that even if she has to downsize her lifestyle at some point in the future, she’ll never suffer from bag lady syndrome—an all-too-common fear among even the most successful women.
Next, we looked at goal #2: maintaining a nice lifestyle. Candice isn’t wed to the idea of staying in the same large home, and given the recent rise in real estate prices in Southern California she could add to her savings if she decided to sell her home. We reviewed her portfolio to ensure it’s structured to provide a secondary income stream to fund life’s little (and perhaps not-so-little) luxuries. With her combined assets, the ability to maintain her lifestyle throughout retirement seems likely. Of course, that’s great news, but perhaps even more important was what our discussion revealed: that Candice’s primary goal is to start living a happier and healthier life today—not only after she retires. And that begs the question: while she loves her job, what’s the point in delaying retirement if she’s not adding richness to her life by continuing to work?
That brings us to goal #3; together, we made a list of Candice’s wishes. Some were what I’d anticipate, such as the ability to spend more time with her grandchildren in Portland, but other wishes surprised me. For example, she’d been taking yoga for over a decade and had dreams of becoming certified as an instructor. She also told me that she’d had an article stuck to her fridge for the past year about a local art programs for adults, but that she’d never found the time to pursue it. We were able to put together an actionable plan to make all of Candice’s wishes come true. Candice knows that she may be taking a small risk by not putting all of her potential earnings toward her future retirement, but she also knows that she wants to enjoy her life now, even if that might mean cutting back a bit when she’s less healthy and no longer able to live such an active lifestyle.
Candice is fortunate. She’s been saving carefully for years and, as a result, has a very sound financial “floor” to support her basic needs today and throughout her retirement years. Not only did our review assuage her fears of outliving her money, but it also gave her the freedom and the mental push to go out and make her wishes come true.
Are you ready to make your own wish list? Call me to schedule a time to look at your own financial floor and how we can leverage your savings to help you live your ideal life—today and in the future.