By John R. Berry, CFP® & Beth H. Watson, CFP®
A highlight of our work is being able to tell a client that their financial plan looks good. This is especially true if they’ve worked to make progress.
During a recent meeting with a 50-something client we’ll call “Fred,” we were able to celebrate a major mile marker.
Fred has a formal financial plan, but here was our two-sentence update for him:
“Saving more is always better, but keep doing what you are doing and you should have a good baseline lifestyle at 65. We can fine tune later.”
Let’s revisit the words “Keep doing what you are doing.”
If a financial life is a road trip, Fred is on cruise control. He’s mastered living beneath his means so he can generate savings. He’s checked quite a few financial obligations off his list—college, cars, emergency funds, debts paid. And his investment accounts are funded automatically each month.
Toughing it through life’s hard lessons to achieve a sense of “coasting” is a huge accomplishment that many people never achieve. Reaching the point where you can sit back and enjoy part of your journey without struggling over every dollar is a big deal.
After all, our lives tend to be long and are, on average, getting longer. There’s no reason to wish good years away waiting for complete financial independence (retirement) when, in most cases, that takes years of saving and compounding.
Continuing with our travel theme, Fred’s GPS (financial plan) has him routed in the right general direction. He owns solid investment vehicles and keeps them fueled by adding more dollars.
The fine tuning we mentioned to Fred happens as we home in on your retirement and other goals. For example, if we’re 10 years out and know that Fred wants to relocate to Texas from the Midwest, it’s not important yet to know if he wants to live in Fort Worth or Galveston. But we aren’t headed to California.
Fred hasn’t arrived yet, but he’s made it through many traffic jams. While there’s no guarantee against future hardship, for now he’s able to relax a little and enjoy the beautiful scenery around him.