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Does The 4% Rule Still Apply For Today’s Retirees?

For decades, you were in the accumulation stage of life—saving up enough to live comfortably in retirement. Now that you’ve built your nest egg, it’s time to enter the decumulation stage, which can actually feel harder!

Creating a withdrawal strategy that matches your unique spending needs and risk profile might not be easy, and it likely won’t follow conventional wisdom. You may have heard of the 4% rule for retirement spending, as this is a common rule of thumb that’s been around for nearly three decades.

But in today’s rather unprecedented market conditions, does it still make sense to follow the 4% rule? Let’s take a look.

What’s The 4% Rule?

Bill Bengen created the 4% rule in 1994.

He researched historical data on stock and bond returns between 1926 and 1976 (a 50-year span) to determine retirement portfolio solvency in extreme market conditions.¹

According to his results, a “safe” amount to withdraw each year without running out of money was 4% of your total retirement savings—no matter how volatile or tumultuous the market conditions got. Thus, the creation of the 4% rule.

It states that if a retiree withdraws 4% of their portfolio annually (adjusted for inflation), they should be able to sustain their savings for about 30 years.

To Work, The 4% Rule Carries Many Investment Assumptions.

To work as theorized, you have to create a specific type of portfolio based on some assumptions. Let’s review what we see as the top four.

Assumption #1: You Have a 60/40 Portfolio Model

Bengen based his conclusions on a 60/40 portfolio model—an allocation of 60% stocks and 40% bonds. But, your portfolio’s allocation should be specific to your goals, risk tolerance, risk capacity, time horizon, and needs. In many cases, that will stray from the conventional 60/40 model.

Assumption #2: You Only Invest in Stocks and Bonds

Another assumption is the strict use of stocks and bonds. But in today’s retirement planning strategies, many find it helpful to pad their portfolio with alternative investments, pension plans, guaranteed income, real estate, and other retirement income sources.

Assumption #3: Retirement Lasts 30 Years

The 4% rule is designed to last a retiree about 30 years. However, retirement lengths vary immensely depending on when you retire and how long you expect to live.

For example, a 65-year-old male expects to live another 19.1 years.² If that’s the case, only withdrawing 4% annually may be too conservative based on a 30-year expectancy. On the other hand, if someone retires in their 50s, relying on a 30-year projection might overextend their savings.

Assumption #4: Retirees Spend Consistently Every Year

While it does adjust for inflation, the 4% rule makes a considerable assumption regarding your spending: it’ll stay the same every year.

In reality, your spending habits will likely shift throughout retirement. When you first retire, for example, you might be more active in regards to travel, visiting loved ones, renovating your retirement home, moving to a new city, etc.

But as retirement continues, life tends to settle down, and your spending slows. As you age, however, your spending may pick up again if your health status changes, you lose a partner, or you decide to contribute to a grandchild’s college costs or wedding plans.

Life is unpredictable, and that can include how you’ll be spending your money in retirement.

So, Is the 4% Rule Still Relevant for You?

While considering the assumptions shared above, you might be thinking that the 4% rule isn’t necessarily relevant to you or your retirement needs.

As you’ve heard and seen on the news, we’re experiencing a period of market turbulence and economic volatility. With that being the case, people who are going to retire soon may find the 4% rule isn’t conservative enough to ensure their nest egg lasts a lifetime.

Creating a Better Retirement Income Solution Than The 4% Rule

Instead of strictly following the 4% rule, consider creating a custom solution with your financial planning team to determine your own withdrawal rate in retirement.

This withdrawal rate may change year to year, depending on what’s happening in the markets and your personal retirement plan. For example, you may decide to withdraw conservatively in the early years of retirement if you anticipate needing more later in life.

Drawing down your nest egg can be more complex than you think, especially since you spent decades working hard to build it up. That’s why working one-on-one with a trusted financial professional can be significant. They can help you develop a strategy, project future income, and determine the proper accounts to pull from. Not to mention, a professional can help proactively plan for future tax liabilities to extend the life of your nest egg.

If you haven’t spoken with a financial professional yet regarding your retirement income planning, please feel free to get in touch with our team. We’d be more than happy to look at your current savings and develop a tailored plan to meet your spending needs in retirement.

^Sources:

¹^{What Is the 4% Rule for Withdrawals in Retirement and How Much Can You Spend?}

²^{Retirement & Survivors Benefits: Life Expectancy Calculator}

Disclaimer:

Advisory services are offered through Legacy Wealth Advisors, LLC dba Legacy Wealth Advisors, an Investment Advisor in the State of Michigan. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Michigan or where otherwise legally permitted.

All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication or future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Legacy Wealth Advisors does not offer tax planning or legal services but may provide references to tax services or legal providers. Legacy Wealth Advisors may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters.

October 3, 2022/0 Comments/by Greg Carrico

Retirement

Are You Overpaying On Insurance In Retirement? 4 Signs The Answer Might Be “Yes”

Insurance is designed to provide financial protection for you and your family, but retaining the right amount of coverage can be a bit of a balancing act. Why? Because overpaying for coverage might give away too much of your nest egg to insurance companies.

Here are four signs that you may be overpaying on your policies and strategies to consider.

Sign #1: You’re Still Paying For Life Insurance

The primary purpose of life insurance is to replace your income if you pass away. If other people, like a spouse and children, rely on your income, life insurance may offer them a financial safety net.

Families in the wealth accumulation stage tend to be the most at-risk of financial turmoil in the event of an unexpected death. This is because individuals in their 30s, 40s, and 50s are most likely to have debts such as mortgages, student loans, personal loans, or car payments, as well as dependents, including children and spouses.

But by the time you retire, your needs for income protection may change. As a financially independent retiree, you and your family may not depend on income from a job to meet your needs—you have your investments, Social Security, and other income sources. Because of this, income replacement might not be a top financial priority.

If You Have a Term Policy

Term policies expire after a set period. If the policy is still far from its expiration date, it may make sense to cancel it altogether if your needs have changed.

If you do that, consider redirecting the money you were paying for your premiums toward something more aligned with your needs in retirement, such as investing in the market or growing your savings. Remember, this is simply one option, and it may not be suitable for you, so work with your advisor to make a tailored plan.

If You Have a Whole Life Policy

While many of our clients may benefit from term life insurance, some prefer to have whole/permanent policies. Because permanent policies have the opportunity to gain cash value over time, work with your financial advisor and/or insurance agent to determine the best course of action.

Retaining your whole life policy may make sense because of the death benefit and potential value growth. Plus, withdrawing from your policy or selling it could trigger a taxable event. This is something to consider carefully with your accountant or financial professional before making any decisions.

Sign #2: Long-Term Care Insurance Eats Its Way Into Your Monthly Cash Flow

About 70 percent of people over 65 will require long-term care at some point in their lives.¹ Long-term care insurance may be a way to help cover this costly care. But is it more trouble than it’s worth? For some, it might be.

Long-term care premiums tend to be expensive. And the longer you wait to apply, the more likely you’ll have higher premiums. Generally speaking, it’s ideal to apply while you’re in your mid-50s. By the time you turn 60, costs can skyrocket.

Long-term care premiums are typically only guaranteed for a set period, meaning the premium rates you receive in your 50s could eventually increase anyway. Not to mention, there are often daily expense limits or lifetime maximum payouts to understand.

The Bottom Line

Long-term care insurance policies are often sold as a necessary piece of the retirement puzzle, but they can be complex and might not be worth the cost.

Long-term care insurance doesn’t offer a death benefit for beneficiaries, which means it’s not an effective way to pass money on to your heirs either.

If you’re concerned about a future need for long-term care and have a whole life insurance policy, adding a rider to the existing policy may be possible. This route allows you to draw tax-free from the death benefit of your policy to cover long-term care costs.

If you and your financial team decide that a long-term care policy might not be a suitable option, there may be some other funding considerations:

Reallocating the money you would have put toward premiums into the stock market or supplement other areas of your financial plan like an emergency fund or other savings goals.
Leveraging your HSA if you have one. Typically, you can use HSA funds to cover some long-term care costs, including insurance premiums.
Creating a plan for health expenses in your retirement cash flow plan.

There can be numerous ways to plan for long-term care, depending on your budget, health, dependents, and goals.

Sign #3: You’re Not On An Appropriate Medicare Plan For You

The Medicare system may be complex, which can make it difficult to enroll in an appropriate plan for your health and budget.

If you haven’t reviewed your coverage in a while, take some time to see what you’re paying and if you’re using the benefits. You may find that a lower coverage plan would serve you best. Or, maybe switching to a supplement plan instead of an advantage plan would better fit your budget.

Luckily, open enrollment is next month (October 15 through December 7). So do your research now, speak with your advisor, and decide if it makes sense to switch. Don’t be afraid to shop around; it could be worth it.

Sign #4: You Haven’t Reviewed Your Home Insurance Policy In Years

Annual increases on your home insurance policy can add up over time, especially if you’ve lived in the same house for decades. Seniors who regularly review and adjust their insurance policies can save an average of $751 in policy premiums.²

Instead of sticking with the same policy and coverage, see what’s out there. You may be able to cut some costs by switching to a new policy. Many insurance companies also offer bundles. Participants can get a discount on their premiums by bundling home and auto insurance.

Work With a Team to Protect Your Retirement Savings

Imagine reducing your insurance premiums. What could you do with that money? Perhaps you’d put it towards investments, growing your savings, or helping a grandchild go to college.

If you could benefit from a second look at your current policies, don’t hesitate to reach out. Our team is happy to review your coverage.

Sources:

1Understanding Long-Term Care

2Seniors are more susceptible to overpaying for home insurance

*Guarantees are based on the claims paying ability of the insurance companies.

^{Advisory services are offered through Legacy Wealth Advisors, LLC dba Legacy Wealth Advisors, an Investment Advisor in the State of Michigan. Insurance products and services are offered through independent insurance agents. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Michigan or where otherwise legally permitted.}

^{All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication or future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Legacy Wealth Advisors does not offer tax planning or legal services but may provide references to tax services or legal providers. Legacy Wealth Advisors may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters.}

September 1, 2022/0 Comments/by Greg Carrico

Personal Finance

Financial Advisors Manage Your Money, But What Else? 5 Key Value-Adds

Sure, financial advisors manage your money.

But that’s a pretty simple way to look at the world of personal finance.

It’s like saying that a contractor remodels your house. Yes, they remodel your home, and to do that, they manage trades, create schedules, help you build the strategy, determine timelines, conduct quality checks, and so much more.

You can apply the same idea to financial planning.

Your advisor manages your money, and to do that, they understand your goals, dive into your risk tolerance and risk preferences, know your time horizon, and more.

They work with you to create a retirement plan, build an estate plan that honors your legacy, ensure you’re as tax-efficient as possible and give you a birds-eye view of your money.

Your advisor helps you see and make valuable connections between your money and your life and empower you to use your money to help you live your most ideal life.

Still think advisors just shuffle stocks around? By the end of this article, we hope you’ll change your mind.

Create a Comprehensive Retirement Plan

When it comes to retirement, several questions spring to mind.

How will you get your income in retirement?
Can you really withdraw the amount you want?
Is buying a retirement home in the cards?
What about taxes—how will those change?
When should you collect Social Security, and how can you create a plan for your spouse?

Your financial advisor can work with you to help you discover the answers to these and several other questions.

Retirement planning is sophisticated. You need to balance your investments, savings, and spending to insulate your nest egg for about 30 years, requiring a balanced and tailored approach. An advisor works with you to design a plan that maximizes your financial opportunities.

They can walk you through investing in retirement and how to use your hard-earned savings to build a life you love to live. A comprehensive retirement plan brings confidence, security, and joy to the next phase of your life. We love showing people how they can use their money to enhance their life—and retirement is a big part of those conversations.

You save your entire career to retire the way you want to—whether on a Bermuda beach or a country culdesac—we help you use your resources intentionally to get there.

Align Your Estate Plan With Goals And Values

People tend to avoid estate planning, and it’s not too difficult to see why.

Death isn’t fun. It’s not easy to think about, and it can cause awkwardness, which leads to avoidance. But since when did avoiding a problem make it go away?

We help you reclaim the narrative of estate planning—transforming it from a taboo topic to one that helps protect and preserve your wealth and legacy for the next generation. Your legacy is deeply connected to your estate plan, and we make sure your documents accurately reflect that.

Are your beneficiaries and designations up to date?
Would you benefit from a trust (and what kind)?
Are you charitably inclined and want some of your estate passed to charity?
Are you making the most of gifting while alive?
Have you considered who will be in charge of your affairs should you become incapacitated?
Are your assets structured in a tax-efficient way, so more of your money goes to heirs or charity instead of Uncle Sam?

The game-changer at Legacy Wealth is that your retirement and estate planning needs are coordinated. Coordinated financial planning leaves no stone unturned and seamlessly aligns your entire financial picture.

Create A Budget That Works Now

While much of financial planning looks to the future, you still need a plan to use your assets with intention and purpose today.

Are you spending too much on entertainment? (don’t worry, it gets us all).
Do you want to travel more?
How can you bring purpose to each purchase?
Are you allocating enough money to your savings?

Budgets tend to cause furrowed brows and tense shoulders, but they don’t have to be a painful part of your personal finance regime. All a budget does is helps you understand the difference between what comes in and what goes out.

Knowing the difference is the first step to regaining control over your money. An advisor can help you create a cash flow plan that optimizes your money today.

It’s essential to make your budget intentional because it will look different from family to family. Maybe you need a meal box subscription to make weekly meal prep manageable; great! Or perhaps your boutique gym membership keeps you healthy both mentally and physically, excellent! Knowing what’s important to your life gives your money more purpose.

Your advisor can help you structure your cash flow to maximize every dollar you earn, invest, save, and spend.

Bring Tax Efficiency Today and Tomorrow

The key to long-term financial success?

Being mindful of your taxes.

Your advisor helps you make tax-conscious choices throughout the year. Proactive tax planning is all about limiting the amount of lifetime taxes you pay. Strategies could be anything from:

Asset location (placing securities like stocks, bonds, ETFs in the most tax-friendly vehicle, either taxable, tax-exempt, tax-deferred),
Tax-loss harvesting (selling depreciated stock to write off on taxes or offset gains),
Roth conversions (converting traditional money into Roth. Often best in lower-income years to maximize tax-free distributions.)
Retirement withdrawal strategies (how much to withdraw from each retirement account (taxable, tax-exempt, tax-deferred).

Tax efficiency is an ongoing process and requires a deep understanding of your financial situation. We don’t just think about taxes once or twice a year; we bake tax planning throughout the year.

Tax planning is such a critical part of what we do that we partner with a CPA to help clients stay more organized and on top of their tax situation. It’s all part of our coordinated philosophy. With us, we can tackle your wealth management needs under one roof. Doing so streamlines the process for you and keeps your money more structured and organized.

Connect Your Personal and Financial Goals (and Help You Reach Them)

True financial planning connects the people, places, and things that matter most with the financial resources to help you get there.

Your financial plan will likely look different than your parents, friends, or neighbors because your goals and values drive the process. Your goals help shape the trajectory of every financial habit you cultivate, from saving to spending to investing to giving.

A financial advisor can help you take a broader look at your goals and see how they connect to your money via financial planning software. You can see your goals, progress, investments, and more. It can give you a holistic picture and connect all of the little pieces of your plan.

Financial advisors offer more nuanced services than providing an investment ROI (though that’s pretty good too)! They can help you bring continuity, vision, and purpose to each piece of your plan and help them work together to help you reach your goals.

Ready to see how an advisor can help transform your wealth strategy? Get started with our team today.

All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Legacy Wealth Advisors does not offer tax planning or legal services but may provide references to tax services or legal providers. Legacy Wealth Advisors may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters.

August 3, 2021/by Greg Carrico

Personal Finance

Married Couples, How To Be The Best Partners In Your Financial Plan

You’ve chosen to walk through life together. That commitment has extended to every facet of your life. Why should your finances be any different? Here’s a hint: it shouldn’t be.

Finding alignment and clarity with your spouse about your financial habits, goals, and values is instrumental to crafting a holistic plan that speaks to both of you throughout your life together.

Money can be an obstacle for couples or it can be an opportunity to grow closer together, supporting one another as you both pursue your dreams. Today, let’s take a closer look at how married couples can build a shared vision and remain steadfast partners in their financial plans.

Both Spouses Should Take an Active Role In Their Financial Lives

Sometimes in relationships, it’s easy (and healthy) to delegate tasks. Whether it’s chores, cleaning, cooking, etc. it’s nice to have a partner to help pick up the slack in other areas. Your money, however, shouldn’t always be one of those tasks.

While we expect one spouse will inevitably take control of the day-to-day financial management, both should have a voice in the process and especially the outcome. Not everyone can be the “paper person” walking into meetings with mountains of documentation and that’s okay. Being present in your financial life doesn’t have to be about meticulously checking your account balance, instead, it’s about being open with your partner and your advisor about the things that are most important to you.

Couples who take an active role in their financial plan are more empowered and engaged to work toward their goals. Each person is on the same page and no one remains in the dark. It also helps the couple create their plans with much more intention and customization.

Every couple is different and being able to express your viewpoints together will only enhance your plan. It also helps your advisor make recommendations that are aligned with both viewpoints. Too often we see one person completely take the reigns, and that can lead to confusion and apathy from the other spouse later on.

Even if one person is more involved than the other, working with a trusted professional will ensure that the plan moves forward, no matter which person sits in the driver’s seat. We prioritize building relationships with our clients, so they can trust we operate in their best interests even if they aren’t present at every meeting.

Create a Shared Vision for the Future

A great way to work together in your financial plan is to think about your shared goals for the future.

What do you want your retirement to look like? Are you relaxing on a beach? Will you open a business together? Do you see yourself moving or remaining near family? What will you do to fill your time (travel, volunteer, work, passion project, etc.)?

Talking through your vision begins to bring concrete elements to an intangible event. Envisioning your future in more specific terms makes it easier to adopt the habits and choices that will help you get there.

Maybe you and your spouse want to move to your favorite vacation hotspot and live on the beach. But to do that, you know you’ll need to make some lifestyle adjustments and redirect more funds to your retirement and brokerage accounts to reach your desired number. Knowing what you’re working toward is critical to helping you build habits to support those goals.

Craft and Support Individual Goals Along The Way

You’ve vowed to spend your life together but that doesn’t mean your entire life is dedicated completely to your spouse.

You are each individual people with hopes, dreams, goals, and desires that may differ from your partner. It’s essential to have and pursue your own goals alongside your shared goals as a couple.

The best part? You don’t have to do it alone! Your spouse will be there to encourage and support you as you reach your goals. Perhaps one of you is passionate about going back to school to get an advanced degree and the other has an incredible business idea they want to act on.

Talk about these goals with your partner and build them into your saving and investing plan. Knowing what your goals are can help you, your spouse, and your financial planner creates a path to achieving them.

Know and Express Your Views and Attitudes Toward Your Money

Marital discord over money often comes down to the misalignment of financial values and viewpoints. Take some time to talk with your spouse about your relationship with money.

Are you a spender or a saver and why?
How much money do you think is appropriate to spend without consulting the other person?
Should you combine your money, keep it separate, or a combination?
Do you have money deal-breakers?
Are you aligned with how much you are investing/saving each month for future goals?

You may think that you intuitively know what your spouse thinks about these areas, but it’s best to talk with them about it anyway. Creating an open and honest space to listen and learn more about one another can do wonders for your financial life.

Find A Financial Partner for Life

Creating a robust financial plan that speaks to both of you opens up many challenges and opportunities. Find a team of financial professionals you trust who can help you take your money to the next level.

Finding the right advisor is a lot like finding your partner. You need someone you trust who knows your goals and can create a plan that helps you get there.

We love building relationships with our clients and guiding them on their financial journey. If you would like to learn more about our comprehensive financial planning services, schedule a 15-minute call with us today.

June 1, 2021/by Greg Carrico

Uncategorized

Do Your Financial Pros Know Each Other? Top Benefits Of Coordination

A coordinated financial plan can help take your money from good to great.

Your finances have several moving pieces and many of those may be executed by multiple professionals—a financial advisor, CPA, attorney, broker, etc. Instead of staying in their own lane, what would happen if their paths intentionally crossed?

There’s a reason the “unlikely friends” narrative is so compelling in movies, books, plays, and, it turns out, even in real life. Building a deliberate and coordinated strategy brings more nuance, finesse, and continuity to your financial life.

How can you create a coordinated financial strategy designed to bring confidence and joy to your life? Let’s find out.

Build Your Core Team

The first question you have to answer is who’s in the room where it happens? (Hamilton fans certainly catch our drift). In general, these are the three professionals who should be working together to help build your plan:

Financial advisor
Estate planning attorney
Tax professional/CPA

You want to have the right professionals in close contact as you move through your financial plan. Why? Because every aspect of your financial plan is connected. Let’s take a closer look.

The Sneak Tax Attack: A Case Study

Your financial choices don’t just affect one area—each decision can have a domino effect. Take your investments, as an example. Let’s see how the cookie could crumble, step by step.

Your allocations, as well as buying and selling habits, don’t just impact your portfolio’s balance and growth. They can also impact your tax liability. High buying and selling rates (along with costly securities) could lead to excess capital gains tax.
If your choices bump you into a higher tax bracket, you may have other tax fallouts like triggering Alternative Minimum Tax or Net Investment Income Tax, increasing your tax bill.
If your tax bill increases, you will need a larger cash reserve to make the payments. This could lead to dipping into a cash-fund for a short-term goal like a vacation or even using your emergency fund to foot the bill.

Do you see how one, seemingly small, event can set off a chain reaction? If your financial planner and CPA are in close contact, they could work together to build a uniform, seamless, and proactive tax strategy. Our office works closely with several great tax professionals, so you can feel confident that your plan would be coordinated from the start.

Your estate planning attorney is another major player in this space. Sometimes people find it difficult to connect their estate plan to the rest of their financial lives, but that’s our bread and butter. We love helping people make intentional and informed choices that tell a continuous and authentic story for their lives.

When done right, your estate plan, financial plan, and legacy should all be an extension of the other, weaving together documents and processes that best portray your goals and values.

Coordination Opens Opportunities

In our opinion, working with a high-functioning team is a valuable asset in nearly every aspect of life, whether at work, with your spouse, or with the community.

Each member of the team has their unique set of strengths, and a strong team maximizes each member’s specialties to help produce the best outcome. Making the most of your team’s efforts can also lead to solutions and outcomes that one member might not have been able to find on their own.

The same idea should be true with your financial plan!

Working in tandem with your professionals ensures that no stone gets left unturned. You won’t make a financial choice without also considering the legal and tax implications, for example. Let’s give this idea some context.

Handling an Inheritance: A Case Study

Assume you inherited an IRA in 2020. This inheritance inspires several important decisions and discussions.

How can you continue your loved one’s legacy with the inheritance?
What financial goals could the money help you accomplish? (Pay off debt, add to retirement, pay for kid’s school, etc.)
How does this inheritance inform your own estate plan? Are your beneficiaries aligned with your goals for the money/assets? Have you talked to your loved ones about your estate plan?
What tax consequences and opportunities can extend the life of the inheritance? (Without the “stretch” provision, how can you keep your tax liabilities at bay?)

All three members of your financial team play a critical role in helping you chart the best course of action. Coordination empowers you to walk into your financial decisions with confidence and clarity, knowing that each step has been carefully planned.

It Protects Your Financial Present and Future

A solid, coordinated team works to help protect your finances both now and in the future. When your pros are working together, they can better anticipate potential roadblocks and strategize solutions. This ensures that you never feel alone or in the dark about your financial life.

Your team can help you stay the course since everyone is working toward the same goals: yours.

So much of financial planning is developing strategies that suit your unique vision for your life. Entrusting it to a robust team helps protect that vision.

Coordinating Gives You Time To Focus On Your Goals and Priorities

When you’re not stressing about your financial plan, you have time to live your life. Knowing that your money is in trusted hands can be a weight off your shoulders and give you the space to live your life according to your goals and values.

Instead of pouring over products, markets, and strategies, you can plan a picnic with your family or have a date night with your spouse.

It also allows you to put your finances in context with your life. Sometimes when you’re too in the weeds, you can lose perspective on what goals you really want to work toward. Having a team to help guide your resources in the right direction, opens you up to focus on your priorities.

You’ll find that a coordinated plan can help give you more confidence and security moving forward. A coordinated plan can truly transform your finances. We’d love to speak with you about streaming your finances to give you more time to live your life. Reach out to us today to learn more.

All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Legacy Wealth Advisors does not offer tax planning or legal services but may provide references to tax services or legal providers. Legacy Wealth Advisors may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters.

March 1, 2021/by Greg Carrico

Legacy

Money Isn’t Your Goal, So Why Do You Think It Is?

Money represents many things—wealth, joy, security, advancement, opportunity, and more. While it can embody these traits, it isn’t inherently any of the ideals above. Money is simply money. It’s paper, metal, a number on an account, or a figure on a balance sheet. It isn’t the secret to unlock your wildest dreams.

Money isn’t the destination, rather it’s a tool to encourage the discovery and nurturing of your goals. Way too often people think that money is the answer, but this narrow perspective limits rather than opens your view and application of money.

When money takes center stage, your goals, values, and priorities can fall to the wayside leading to a mindset of always craving and chasing more. Today, we are going to explore intentional ways to broaden your perspective about money and all the wonderful places it can lead.

What is ‘enough’?

Money plays an essential role in life. It’s how you pay your mortgage, put food on the table, and engage in the activities you enjoy. While money enables your lifestyle, it doesn’t dictate how you build your life.

Let’s put this in perspective. We can start by asking a question,

What would you do with more money?

A litany of items likely flew into your mind whether it be a house project, vacation fund, new clothing, a trendy piece of technology, etc. Given the means to do so, people can find ways to spend money.

But what is enough money? Is enough money when you can finally upgrade your car? What about when the latest model is released or a different brand has more high-end finishes? Your idea of ‘enough’ shifts to accommodate your current wants.

By chasing the idea of attaining enough money, you find yourself in dangerous territory because enough money doesn’t exist. There will never be enough. Once you move past searching for enough money, you can dig into the true value that money can bring to your life.

Adopt a new money mindset

Your money mindset is the unique attitude you have about your finances. It impacts nearly every financial decision you make and can inform your habits.

You may think you know how you approach your finances, but a little introspection can tell a different story. Here are a few questions to get you thinking about your current money mindset.

How do you feel about your financial life?
What comes to mind when you think about managing your finances?
Do you have confidence in your financial plan?
Are you comfortable talking about your finances with your spouse? How about with family members or close friends?
Do you take a more active or passive approach in your finances, and why?

These questions can be telling for how you view your finances in both the short and long term. Perhaps you earmark all of your money for the future or maybe you spend your paycheck the second it hits your account.

It’s critical to address both the positive and negative ways you view your money because knowing both can inform your choices moving forward. Someone who operates under a scarcity mindset, for example, never believes they have enough money, which can bring about stress, fear, and anxiety.

This type of mindset can hold you back from realizing financial flexibility, freedom, and joy. Simply shifting your money mindset can have a significant impact on your financial health.

When you aren’t afraid to manage your finances, you could make a more sophisticated investment plan. Added confidence in your finances can help you have more open, honest conversations with your spouse. Maintaining a positive outlook for your finances can lead to healthy choices that enhance rather than detract your goals both now and in the future.

Quality over quantity

You’ve heard this saying countless times before, and usually, the quality of something is more important than the quantity. Money is no exception to the rule. The more money you have doesn’t translate into a higher-quality life. Rather it’s what you do with your money that begins to define quality.

When you stop thinking about money as the end-all-be-all of happiness, you can start to see the things you value most.

What brings you joy?
Where do you find peace and contentment?
How do you find fulfillment and meaning?

These answers can act as a window, letting you see the ways you can use your money to fulfill your deepest hopes and dreams.

Re-define your goals

If money isn’t the goal, what is? It might be to build a career you are passionate about, giving back to your community, or deepening your relationships with yourself and others. The idea here is to transition your goals away from money to the things that truly matter in your life.

It’s important to know that money doesn’t have to be entirely absent from your goals. You might have a goal to retire early or start your own business or buy a new house for your family or take some time to travel the world and broaden your horizons. All of these goals are exciting and involve money. But as you can see, money itself isn’t the goal.

It’s less about making money the goal and more about structuring your financial life in a way that bolsters your goals. Take some time to define what your true goals are and the role money plays to help you achieve them.

Money is a crucial part of life, but when it goes slightly out of focus, your true values, priorities, and meaning come in crystal clear.

Our goal at Legacy Wealth is to help you define and achieve your goals. How can we do that for you? Schedule a 15-minute call with our team to find out more. We can’t wait to learn what matters most to you.

October 15, 2020/by Greg Carrico