3 Questions to Ask Your Financial Planner

If you have been a reader of this blog for a while, you know that I am all about helping you to win with your money.

I want to share what I have learned about budgeting, saving, and getting out of debt, which are the keys to prosper in your finances.

But there are areas of personal finance in which I myself need help and wise counsel.

For example, I am not a certified financial planner or investment professional.

I do have investment principles I follow, and I also understand what my current investments are and how they are performing in the market.

However, I am not an expert in the area of investing.

What do I do then? I have an investment professional that helps my wife Stacey and me. And unfortunately, I had been remiss in meeting with him for more than one year. He had sent me an e-mail earlier this year indicating that it was time for a sit down review.

Being so busy, I promptly ignored the e-mail and went about my business. Then a phone call followed up and Stacey answered it. As a good wife will often do (Proverbs 31:10-11), she said something to the effect of: “We are paying him, we might as well take advantage of his expertise.”

Of course she was right as usual, so we made the appointment. We had a great discussion with him and we got a great sense of where we are.

I thought about the appointment beforehand, and I want to leave you today with 3 questions to ask your financial planner:

1. Are We investing in the Right Things?

As I mentioned before, we do have investment principles we follow and investment vehicles we chose personally. You should only invest in something you understand and can explain to someone else.

You should also monitor the performance of your investments on a regular basis. I don’t mean obsess over the daily ups and downs of the market. But do check it quarterly or monthly as appropriate.

So my first question was, are we investing in the right things? How have those investment vehicles performed recently? I wanted to make sure we are still making wise choices.

Our financial planner explained that most of our investment vehicles were doing well, but there was one that had underperformed recently.

Based on his analysis of the results, he gave us a recommendation for a change. Based on his counsel and our understanding of the information, we took his advice and made the change.

2. What is a Safe Withdrawal Rate for Us in Retirement?

This is a question that’s often debated in financial circles: what to do at the point in your life where you are no longer drawing income from a job or a business? You probably have heard numbers between 4% and 8%.

Your income then will come from your retirement savings. So, how much can we safely withdraw every year in order to make the money last through our retirement?

While I have heard and read about the different percentages for withdrawal, I wanted our planner’s expert opinion as it applied to our personal situation.

We only have one son and he is on his own and no longer dependent on us. We also carry no consumer debt and our mortgage should be paid off within the next 10 years.

So given all of that, what’s that number for us? Because he understood our situation and also knows how our investments are performing, he gave us an answer that we feel very comfortable about.

3. Are We on track for Retirement?

This is the ultimate question in terms of finances, right? Will we have enough to carry us into our golden years? Will we have enough or will have to work into our 80s and depend on Social Security?

Now listen, I want you to work and do something you love doing until the day you die if that’s your choice. Work is a blessing and we were created to work, excel, and bless others with the fruits of our labor.

But, I only want to do something because it is my choice. I don’t want to work because I have to work. The point of prospering with money is that gives you options and freedom to do what you want to do.

So that’s the question I had: given everything you know about our situation, are we on track for retirement?

I wanted to know if everything we have done in the last 8-9 years was putting on us on the path we wanted to be.

I have been blogging for about 4 years now and sharing with you what I have been doing and encouraging you to do the same so you can prosper.

So this was a good litmus test for all that advice I have been dispensing.

Thankfully I can say that based on our planner’s analysis of our current savings, our current investment rate, and our plans for retirement, we are definitely on track to retire with dignity. We are on track to reach our goals to enjoy our later years in the strength of our financial resources.

Now, no one can predict the future. But you have to analyze and plan as if you are going to be here for a while. You have to understand where you are headed with your money in case you need a course correction.

I am glad we took the time with our financial planner. I am glad he has a vested interest in our well-being. I am glad he took the time to explain to us how we are doing.

So remember, we all need help sometimes. We all need wise counsel from time to time.

You don’t have to go at this alone. Take advantage of the expertise available to you.

Make an appointment with your financial planner today!

Question: Do you know if you are on track for retirement?

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