Tom Recommends Working Issues Out Together, with Your Advisor
Transcript:
Katie Nealis:
So, Tom, you’ve completed 1000s of financial plans and your experience, where do most couples have issues being face to face and their financial plan? And do you think these there are topics that should be figured out before they come to you with their plan?
Tom Vaughan:
Well, that’s a really good question. This happens a lot. You know, two people coming from two different environments that get married together, very rarely have exactly the same outlook on finances. I mean, I don’t know what the stats are anymore. But you know, in terms of like, arguments, finances are supposed to be in the top three, or what have you. And that is because sometimes it’s just like, two different scenarios coming together. And of course, some of that has to be worked out. Now, I would say you want to work it out as much as possible, with your financial advisor in front of a retirement plan, because you may be trying to work something out, that doesn’t need to be until you know, what the parameters are, what the issues are, you might be, you know, trying to figure something out that you don’t have to. So for example, one of the things that comes up very often is the risk level can be quite different for each person in the in in that union. And that’s not that difficult to accommodate, because somebody has their IRAs. And so we say, okay, you get your risk level, the other person has their IRAs or individual accounts, you get your risk level. And then really, the only things that really have to be figured out are the joint type accounts, the trust accounts, the things that are, you know, that are, that are together, and you can oftentimes we just end up doing, you know, hey, one person is 80% stock, and the other person is, you know, 40% stock, and then maybe the joint accounts are 60, I miss it, I’ve dealt with that a lot.
I mean, matter of fact, that’s more common than the opposite, where people are exactly on the same page, in terms of their risk. You know, spending is a big one, although by the time somebody gets to me, usually, they figured out some of the spending parts, you know, as far as that goes, and we have to accommodate that one person wants to spend more the other person doesn’t, or you know, those types of things. And it’s interesting to watch, there’s a lot of couples therapy, that happens, really, in terms of a financial plan, I do think having the plan, and having sort of, I mean, I remember, you know, situations where somebody wanted to pay off the mortgage immediately, and another person wanted to keep the money invested, because it was doing well, and we split the difference, and we created an accelerated, you know, plan that would pay it off, I think, in seven years, five years, something like that. And that made him both happy, right, and we went along, and we’re executing that, and we’re putting that money, and it’s gonna be paid off. And both of them were happy. Whereas before, they were going kind of an either or, and there was no middle ground. And so sometimes meeting with a professional, you know, we can craft a middle ground. More importantly, we can go through and take the financial plan, and see if it works. What happens if we pay it all off? What happens if we don’t pay it off? You know, just pay the minimum? What happens if we pay it off in five years? And see, how does that impact the overall scenario? What’s the smart answer to that? And you know, you’ve don’t have those tools at home, when you’re sitting there talking about these things as far as that goes. And so that, you know, there’s a whole bunch of kind of middle ground scenarios that can be created, where both people feel pretty good. I’ve been through this a lot.
I mean, I’ve done over 6000 financial plans and worked with, you know, 1000s of clients, you know, year after year after year. And so you get to see in there, not, not not all the situations are the same, you know, there is still some conflict in some areas, and then some other people have zero conflict. Yeah, there’s definitely different couples, there’s no doubt, but generally speaking, I haven’t seen anything that wasn’t, you know, accomplishable, in terms of finding that right spot, ever really, you know, as far as that goes? So, it’s a great question, though. It’s a it is a big issue. And I’ve read that a lot of couples don’t like to come in to see financial planners, because they feel like, you know, it’s too difficult. They’re embarrassed that they don’t have it organized, and they don’t have a cohesive strategy. But I’ll tell you what, you’re actually in the majority. If you don’t have a cohesive strategy, that’s in my opinion, but don’t be afraid to come in because we can help. We can kind of create a scenario that finds a middle ground, you know, that I think can work. Oftentimes, and again, we have some great tools and a lot of experience. I’ve been through a lot of plans.
Easan Arulanantham:
Yeah, and we can always like adjust goals and stuff like that you can come in with like a stake in the ground. And then maybe you could retire two years earlier rather than working. And that makes you a lot happier. Yep. And we can adjust based on just having that plan in front of us we give up gives us so much flexibility in testing all your scenarios.
Tom Vaughan:
Yeah, I shudder to think about how many people right now are retiring and deciding to retire without a plan. It’s a kind of crazy thought process is the biggest financial decision you’ll make in your whole life. It beats out getting married, it beats out having kids go to college, all these things. It’s a really big issue. And then all the pieces that come in together with that, and so and it’s not going to enhance a scenario where the couple isn’t agreeing on things because they don’t have the tools to kind of figure out where that middle ground is, and whether that middle ground even works. And so yeah, I think we can we can kind of do exactly that try to accommodate and figure out different scenarios. And again, we’ve been through this 1000s of times, so it’s a good chance that we could help you