Earning my CFP® certification has invited several family members and friends to start asking questions about finances and future planning. But what I’ve realized is more often what they’re really looking for is affirmation that what they already think or want is “right.”
Much like good healthcare, good financial planning is individualized. There is no single prescription for a healthy life or one-size-fits-all approach to achieving financial success. In large part because the actual definitions of health and success are up for debate. How could their solutions be universal?
When you ask about the “right” time to start collecting Social Security, for example, you’re actually opening the floodgates to dozens more questions. The answer to your question requires background knowledge about other facets of your life like: what is your full retirement age and how far are you from it; what is your health outlook; are you married and does your spouse collect or expect to collect their own Social Security benefit; do you have other means of supporting yourself – either through other investments or continued employment – while you wait to begin collecting? And, perhaps the most important question of all, is starting now or waiting until later in alignment with your values and what you want out of retirement?
If an advisor, friend or AI bot gives you a simple answer without recognizing the complexity of the question, you may get a right answer, but not necessarily the right answer for you. A doctor could provide a treatment plan that checks all the clinically-researched boxes, but it’s not a good plan for you if you’re allergic to the medication.
If what you really want is information you can use for mapping your future, what we need as financial planners is a realistic picture of your starting point – your medical history, if you will. Because useful outputs only come from truthful inputs.
That’s the real first step. Not asking the questions, but uncovering and accepting the truths that will allow those questions to be answered. It takes introspection, honesty, communication with your partner and having a deep connection to your values – first. No decision in your life is made in a vacuum and every domino you push sets off a series of events whether you want them to or not.
If you are looking for some information to guide your next steps – let us help!
-Meredith Woodbridge, CFP®