There are plenty of questions that will come up during the financial planning process, and many of these are often led with the same two words: What If. These ‘What Ifs’ might have been what led you to want to meet with a financial planner in the first place, and they are a major concern that you want to address in the course of the planning process.
I had a coach that harped on this phrase when I was younger: ‘The worst thing in life is to ‘What If’ yourself.’ It took years for me to truly grasp what he was trying to say to us and to understand that he was giving us words to live by for the rest of our lives. He wanted us to be sure that we did everything we could to prepare ourselves and that we executed as best we could so that we didn’t have to ‘What If’ ourselves. He wanted us to be sure that we left nothing to doubt and did all we could to get the best outcome possible, even if it wasn’t the outcome we hoped for.
This coach’s advice translates into the financial planning I do with my clients. We discuss the ‘What Ifs’ in your life and we work to address these and prepare for them. If the time comes for these ‘What Ifs’ then we work to execute the solutions we implemented. There might be times when the outcome is not the desired one, but the planning and solutions you implemented helped you to not be blindsided.
So, lets take a look at several common ‘What Ifs’ that can come up in the financial planning process and how you might approach planning for them:
- What if I decide to retire early?
- This ‘What If’ comes up often. You might ask about this so you can go ‘live the dream’ earlier than you expected. It could be a result of uncertainty in your work environment, and you are not sure you will make it to the retirement age you originally planned for.
- Whatever the reason for wanting to look at and analyze this ‘What If’ you want to know if you could be successful in making that early transition to retirement.
- We may need to look at different layers of this to determine your likelihood of success. You might need to alter your lifestyle by spending less and saving more to get there. You might be just fine and be on the correct track with little to no change in your original planning.
- Whether there is a need for change or not, the work done to address this will help you to avoid and not have you looking back and asking ‘What If’ I had prepared more? Could I be in a better position for my retirement?
- What if I pass away prematurely?
- You are concerned about the well-being of your family and want to know if you need to plan further to help them should you not be here to provide for them for a number of years due to passing away early and unexpectedly.
- We analyze an early death and discuss your plan as it is now, and how certain actions might affect it.
- We can look to see if you are in need of Life Insurance (should you not have any), more Life Insurance (If you have a current policy, but it is not enough) to make up for the lost income.
- There is a possibility we find that your assets are enough that your spouse and family will have enough to live on without having to take additional measures.
- The ‘What If’ when it comes to an early death is tough to discuss, but often gives clients ease of mind to know their family is taken care of in the end.
- What if I am not able to work due to a disability?
- This ‘What If’ can be quite a surprise to clients when we discuss it. You might not be aware of how much a disability event can affect your goals given the large expense that might come with it as well as the lost income as a result of it.
- We can address this by looking at ‘What If’ you need more insurance, or is your work insurance adequate?
- Just as much as clients fear passing away unexpectedly they are also worried they might be a burden on their family when they are left unable to care for themselves or earn a living.
- By looking at this ‘What If’ you are aware of what measures you might need to take to be prepared.
As I said earlier, the outcomes in these scenarios aren’t always the desired ones, but the overall theme of planning for and addressing these ‘What Ifs’ is that you are educated and empowered to make informed decisions about these ‘What Ifs’ and hopefully have the confidence that you have prepared for them. These are not the only ‘What Ifs’ that can come up, but you won’t know what other ‘What Ifs’ need to be addressed until you take sit down and discuss them in your financial plan.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.The opinions expressed in this material do not necessarily reflect the views of LPL Financial.