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Is It Too Late for Financial Planning? No – Start Now!

Is It Too Late for Financial Planning? No – Start Now!

18 Jul 2022

If you haven’t started planning your financial future or only performed minimal planning, don’t panic. It is never too late to start financial planning. Even if you are 40, 50, or older, you have plenty to gain and nothing to lose with financial planning provided by a CERTIFIED FINANCIAL PLANNER™, commonly referred to as a CFP® Professional

 

However, the sooner you start, the better chance you have of retiring by your target date. An Akron-Canton financial advisor at McGervey, can help!

 

You Don’t Have to Plan Your Financial Future on Your Own

Most people who don’t have a financial plan for the future or drag their feet in the context of financial planning assume such a project would require an abundance of time and effort. Though it is certainly true that you will have to dedicate an hour of your time to meet with a financial planner, they will do the metaphorical heavy lifting on your behalf. Sit down with a professional to review your financial situation, and communicate your goals for the future and a financial roadmap will be created on your behalf.  

The best CERTIFIED FINANCIAL PLANNER™ Professionals are fee-only, fiduciaries, meaning they refuse to accept financial payments from investment service/product providers in exchange for promoting those offerings. Rather, they make a flat rate for financial planning in which they perform active investment management on behalf of clients to expand their financial nest egg in time for enjoyable golden years.  

Your relationship with our CERTIFIED FINANCIAL PLANNER™ Professional will be grounded in financial planning across the entirety of the relationship, meaning we refuse to prepare a projection, invest your money, and hope those investments generate returns. Our team provides detailed financial modeling of each client’s unique financial picture to amass wealth in both bull and bear markets.

Start Financial Planning as Soon as Possible

The letters ASAP with the words as soon as possible surrounding it

Now is the optimal time to start financial planning. Whether you have only grazed the surface of financial planning, met with a financial planner years or decades ago, or have no plan at all, the most important thing you can do is be proactive. Start saving for retirement, investing in a wide array of investment securities, and developing a budget as soon as possible and you’ll make headway toward your goal of a timely retirement.  

Our financial advisors will guide you through this process, helping you maximize your financial nest egg before financial planning constraints set in as you near retirement. As an example, older employees find starting their financial plan is more challenging as they are that much closer to leaving the workforce and will have to take required minimum distributions (RMDs) by specific points in time. 

Even if you are 40 or older, you still have another 20+ years in the workforce, meaning there is plenty of time to plan your financial future. Plan your financial future with the assistance of a financial ally and you’ll enjoy the benefits of your tax-sheltered investment accounts’ compounding effects across the decades ahead.

Recognize Financial Planning is Complex

If you were to compare the nest eggs of those who saved the majority of their money or invested it in low-risk investment vehicles versus those who put their money to work for them in the form of a diversified investment portfolio, you would find the latter significantly outperformed the former when all was said and done.  

Saving is certainly commendable yet it is not enough in itself. Nor is passively investing in mutual funds and ETFs enough to maximize the utility of your hard-earned money. Opt for comprehensive financial planning performed on your behalf by an experienced CFP® and you will benefit from myriad investment tools ranging from your 401(k) to an IRA, tax-advantaged investment products, bonds, CDs, money market accounts, real estate, and additional investments.

Start Your Financial Plan Today to Take Advantage of Tax-Deferred Investment Vehicles

There is no sense in opening a regular investing account and attempting to handpick individual stocks, mutual funds, and ETFs when tax-deferred investment vehicles such as traditional IRAs and 401(k)s are available. 

These tax-deferred accounts are optimal as they provide a golden opportunity for individuals to save money specifically for retirement. Both types of accounts empower investors to deduct contributions made from earnings on an annual basis.  Some employers match employee contributions to 401(k) accounts.  

Furthermore, IRAs and 401(k)s empower investors to defer tax payments to the point at which they retire. Paying taxes after retirement is financially advantageous as one’s earnings are typically lower during those golden years, meaning the tax burden won’t be as significant.

An Accurate Financial Picture Rooted in Facts and Figures

The average person who delays financial planning does so as he or she has misconceptions about personal finance and the financial planning process. Some people simply assume the money they have in their savings account will suffice for retirement. Instead of assuming you have enough money to retire at or near age 65, prepare for the worst possible scenario.  

The last thing you need is to under prepare for the financial challenges of the future and end up running out of money at an age when you should be enjoying the finer things in life. Keep in mind, that the human lifespan is increasing, the value of the dollar is decreasing due to inflation and the cost of housing is soaring.  

the words facts and figures spelled out on a chalkboard

Instead of assuming your current rate of saving and investment will suffice, do the smart thing by meeting with a fiduciary, fee-only financial planner for the development of a comprehensive financial plan. Your dedicated professional will help you maintain your purchasing power across posterity, meaning a plan will be put in place to ensure you do not have to return to work after retiring.

A Financial Planning Strategy Tailored for You

Financial advisors go to great lengths to develop fully-customized financial plans for each individual client. This means the financial plan developed for your nephew or cousin probably won’t be anything like the unique financial plan created for you. Your unique age, savings, investments, salary, and debts all play important roles in shaping your financial plan.  

Level with your planner about your financial situation, be realistic about your timeline for retirement and let this professional develop an idiosyncratic financial plan specifically for you. Even if you are in your late 30s, 40s or 50s and have not done any financial planning, you will still benefit from developing a financial plan with the guidance of a CERTIFIED FINANCIAL PLANNER™ Professional.

As an example, if you are younger than the age of 50, you can contribute up to $20,500 to a 401(k) this year. Employees age 50 and older can contribute $27,000 to a 401(k) in the form of catch-up contributions. Even IRAs provide an opportunity for catch-up contributions, empowering individuals age 50 and older to add an additional $1,000.  

Those who are nearing the age of retirement should be aware that there is still time to bolster their retirement savings by adding funds to an IRA, 401(k), thrift savings plan, or another retirement plan. Older employees should also take full advantage of Roth IRAs that do not mandate withdrawing funds from the account at specific ages. Alternatively, money parked in a traditional IRA requires taking the aforementioned required minimum distributions from the account at the age of 72.

Define Your Financial Goals with McGervey Wealth Management 

Learn more about our full-cycle investing approach and work with a CERTIFIED FINANCIAL PLANNER™ Professional near you. You can expect to get customized investment, estate, and tax planning strategies to maximize cash flow, manage risk, and help with growing your wealth. Because it’s not just a one-time endeavor, your financial plan will evolve along with your goals, intense market shifts, and as new opportunities present themselves.

Get started with financial planning in Canton, OH, today!

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More About the Author: Matthew McGervey, CFP®, MBA

As a CERTIFIED FINANCIAL PLANNER™ professional, Matthew has a broad knowledge of personal financial planning strategies and solutions.