The Right Tools Make The Job Go Much Easier

The Right Tools Make The Job Go Much Easier

My friends tease me because I have a lot of gadgets in my toolbox.   While I like to try to fix things around the house, most of my attempts results in one of my gifted brother-in-law or friends bailing me out and finishing the job.   I might enjoy buying gadgets more than fixing things.   In any event, having those tools makes the job go easier even when the tools end up in an artisan’s hands.

A great retirement plan needs multiple tools.   Those tools help navigate the multitude of challenges and obstacles that await us in the future.   Home remodelers don’t always know what is behind a wall when they cut into it.   They often have specialized tools to help overcome the mysteries they find.   In your financial plan, the mysteries behind your “financial walls” are these things.

  • How long will you live?
  • What health needs will you have?  
  • What impact will inflation have on my money?  
  • What if the tax code changes?  

A great plan considers all of these things.   However, even the best financial plan cannot answer all these questions from the outset.   Rather, you constantly update the plan with the present realities and make modifications.  

The financial tools that can make this go better include:

  • Predictable sources of income (e.g. Social Security, pensions, immediate annuities)
  • Pre-tax retirement savings (e.g. IRA and 401k) that allow you to save on income taxes in the present day
  • Tax-advantaged retirement savings (e.g. Roth IRA and 401k) that provide tax-free income in the future,
  • Risk diversifying assets (e.g. stocks, bonds, real estate, alternative investments) that protect against wild swings in the markets
  • Properly-drawn estate planning documents (e.g. wills, trusts, durable powers of attorney) that allow our financial affairs to continue even when we may not be able to manage our own affairs.

Often, we talk about all of the unknown risks in life.   Are they really that unknown? I do not think so.   Instead, most of the things that cause us stress are not new, but we just never know when they will disrupt our lives.   If our plan addresses these known risks, but without a date-certain when they will enter our lives, it makes for a plan with a greater likelihood of success.  

You do not know that you will need long term care, but there is a reasonable chance you will.   Taxes might not go up, but there is an awfully good chance they will sometime.   Inflation has been tame for the last decade, but it hasn’t always been this dormant.   People used to live to their 70s and 80s, but now many people live to their 90s and even over age 100.   If these things happen, has your plan addressed them, and do you have the tools necessary to adapt to the changes?

At Anchor Pointe, we lead clients through our Financial Boot Camp, a project-based, comprehensive planning process, that starts with their financial goals (e.g. retirement, vacations, new vehicles, home remodeling, etc.), and then benchmarks where they now financially, and determines where they need to get to so they can accomplish those goals. 

We create prioritized action plans that address all of the financial disciplines (e.g. cash management, debt management, insurance and risk management, investment management, estate planning and tax planning), and identifies the key steps to shore these areas up.   From that, it is easier to determine what tools need to be added to the financial toolbox.   Some folks arrive with great investment processes but have substantial estate planning gaps.   We send them to the “estate planning store” to get the legal tools to fix the deficits.   This process is done for all of the financial areas.   Then, over time, the process is refreshed to deal with the changes that are almost certainly going to arrive.

If you are doing a home project give me a call! No, don’t ask me to come help you because that won’t work out so well.   But, feel free to see if I have a gadget you can borrow. On the other hand, if you need some help reviewing your financial plan, and accessing your toolbox, I’d be delighted to lend a hand.  Together, with the right plan and the proper tools, your financial house can be built to stand the test of time.