Tom’s Thoughts on How to Plan for Your Retirement
Transcript:
Katie Nealis:
I’m approaching retirement, what kinds of things should I be looking for in preparation?
Tom Vaughan:
Okay, that’s a great question, actually. Because here’s my outlook on on finances as a whole. You know, there’s essentially goal based, you know, if you really look at it, right, you know, we have a current lifestyle that we’re trying to meet. And then when we’re looking at kind of the future might be, you know, trying to save for a car, save for house, pay for college education, if we have kids, and all those things. But I’ll tell you what, the big granddaddy of all the goals is retirement, it takes the most money, and it probably is the most gratifying, honestly, you know, getting house is great and everything, but having a fantastic retirement, for the last 20 to 40 years or 50 years of your life is just, it’s unbelievable. And for the most part, what I’ve seen within my clientele, people like retirement Matter of fact, the most common comment is, Hey, I should have retired a few years earlier. And so I think that’s pretty good.
So really, what you want to, you know, watch for and deal with in retirement. And now, when I say retirement, it’s still ongoing, let’s you’re 80 years old, you’re still working on your retirement, you’re 20 years old, you’re looking forward to you’re working, you know, and you’re working on your retirement, we’re all working on our retirement, honestly, at every point in our life, there isn’t any one point in time. So really, what you want to make sure is that you have you know, your your bases covered, that you’ve got, you know, a solid financial plan in place, no matter what age you are, to drive yourself and to guide yourself for where you’re going, that should be reviewed every six months, you want to make sure that you have a really solid asset management program that matches your your risk that you need to take to make your plan work and the risks that you’re willing to take and getting those to balance out. That’s super, super important. And that you make sure that you still have savings in place, even when you’re in your retirement, but certainly prior to retirement, to be able to handle those different types of you know, you know, events that happened just like what happened last year with the pandemic, we don’t know what’s coming next.
So being you know, being aware, as far as that goes, I believe, personally, and this is why we’re pushing this so much. Look, I know, I’ve done over 6000 financial plans, I’ve been doing this for 35 years, and I’ve gotten to watch so many paths. So many situations, I’ve seen good pass, I’ve seen bad pass. And and I think that knowing what we’re talking about here, becoming more knowledgeable about financial planning, tax planning, investment management, even if you’ve hired somebody else, like me, or somebody along those lines, still, you’re going to do better. And I’ve noticed that within my clients. So that’s why I think you know, this type of resource, we’re providing a free education, there’s literally millions of dollars worth of content that we’re putting out here, if you really paid attention and followed along, it can really make a difference. So I think that’s the kind of the other part is you just never stop learning about it, you know, and find some interest. You don’t have to get to my level. But you know, picking up pieces here and there will help you tremendously.
Katie Nealis:
In the beginning of your question or your answer, you mentioned the importance of having a financial plan and reviewing it every six months. What age would you suggest for someone, let’s say 18? What age would you suggest starting that financial plan?
Tom Vaughan:
I think in your 20s is a good place to start a financial plan, you know, even any point in time when you really kind of get that first no significant job. Because I think it does make a difference. It gives you a guide path, you know to follow. That’s not very common. But I do have that we do have clients that have done that. Obviously, you know, if you look statistically, most people save most of the money for their retirement between ages of 55 and 65. And that’s when they start to get serious. And a lot of people don’t do a plan until they’re really, really close to their retirement. But I think that’s a mistake. I think it would help you substantially to be able to see the future if you had that in place. So yeah, I don’t know that that you can do that too young, it wouldn’t be a problem.
Easan Arulanantham:
Yeah. And the nice thing about a plan is the nothing service set in stone. So say life changes, say you don’t want to buy the house in California anymore. But you have to you’re moving to Michigan for a job. And you’re playing your plan can be easily adjusted. But and so having a flexible plan is always good.
Tom Vaughan:
Yeah, and that’s changed. And that’s an that’s a new concept altogether. Because if you think back to when we used to do plans, well, first of all, we used to do plans, you know, I go farther back than you guys do, but on a yellow legal pad with an HP 12 see calculator right. So those weren’t maybe the best examples of what you do. And then you know, the next version of plans was this big software and we had to gather all this data, it was really hard, we were lucky if we could do it every two years just because of the pure labor. But now, plans are live, they’re online, all of the assets are linked into the plan. And it’s super simple. Literally in a few minutes, we can go through and update some of the goals, you know, for the changes, like you mentioned, ease and, and we’re able to run a Monte Carlo simulation and see what’s happening. And that’s changed the whole world in that regards. And it’s a dream of mine.
I mean, I’ve honestly thought about this for so long, being able to have live active plans for every client, and now we have it. You know, it took a while for the technology to get there. But yeah, exactly that flexibility of seeing, you know, hey, this change, and that changed and, you know, and how that impacts your life or half? What asking what ifs, you know, what if I want to go do this instead? What if I want to switch jobs? What if I want to take these big vacations? Or what if I want to remodel my house or so to me, that’s a huge issue, right? Because I’ve, you know, now I’ve got, let’s say a 70 year old that’s in retirement and they’re no longer earning money in a job. And they’ve got these big questions and they want to do something, they want to remodel a bathroom, it’s gonna cost $100,000 or whatever it is, you know, how does that work? So that that’s, that’s really, you know, where the flexibility of a plan comes in today. It’s really, really powerful.