Pre-Retirement

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Walking the Walk

Does your financial team practice what they preach?

When someone gives you advice, do you ever find yourself wondering whether or not that person actually lives by that advice? Personally, I want to know that person has taken the time to make sure that what works in theory actually works in practice.

The same goes for professional advice too, and during the first few years of my career as a professional advisor, I've made a point to practice what I preach. When I first started out in the financial planning world, I thought I was doing pretty well managing my own finances. But I've also made sure to apply what I've learned and the advice we give to our clients to my wife's and my finances.

Let me give you a few examples. First, we made sure to review Hannah's benefits at work, which is something we always encourage our clients to do each year in case something has changed. We found that her company had increased the amount it would match in her retirement account, but we hadn't taken advantage of that extra half percent. Now, I know half a percent doesn't sound like much, but we were leaving free money on the table, which is something we almost always steer our clients away from.

Second, we automated our savings. This is one of the biggest but simplest actions we advise our clients to take, and so my wife and I made sure to adhere to this piece of financial wisdom too. It's easy to say that we'll fund the Roth IRA at the end of the year, but that opens up so much temptation to spend that money elsewhere. It's very likely that the maximum amount will never make it into the account.

Third, I purchased a new (to me) car recently, and as I was shopping for insurance, we shopped around for better rates for Hannah's car too. This is another item we put on many clients' to-do lists: review your property and casualty insurance on a regular basis. We were able to get better deals on the same coverage for both of us.

Speaking of insurance, we also purchased life insurance for us both. We are at the age and situation where many people think they don't need this extra protection - we're young and healthy and we don't have kids. But while no one wants to think about tragedy, I did plug some numbers into our eMoney account, and the insurance we bought would allow the surviving spouse to achieve our future financial goals should something happen to one of us. It's peace of mind, and it's usually much cheaper to buy this coverage when you are young.

Finally, we also re-balanced our retirement savings to make sure our investments were diversified across all accounts. Many clients come in for the first time with multiple savings accounts, each managed by a different person. They aren't being managed as a whole, with one advisor looking at the big picture. That's the crux of the comprehensive financial planning our team offers: You can always find different people to do all these different things for you, but having one team managing all aspects of your finances helps ensure everything is working together towards an end goal. And it's not just lip service.

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