Uncertainty is part of our life. We do not know what the future will bring. Uncertainty can be very stressful. How can you best deal with uncertainty?
There are many issues in our lives which result in uncertainty.
- You may be concerned if you will have enough money to retire and still live the life that you want.
- You may be concerned about whether you will need to go into a nursing home or similar-type of facility, and what the cost of that will be.
- You may be uncertain if you are saving enough for your children’s college education.
- You may be concerned about the stock market, which is full of uncertainty, especially in the short term.
The best way to deal with these types of uncertainty “issues” is to work through the specific issue with us. Begin a process. Start the discussion.
Let’s take the issue of “retirement savings,” for example. Will you have saved enough?
If we met with you to discuss this topic, we would identify the factors that begin to answer this question. We would ask you the following, and more:
- When will you be retiring?
- How much do you think you be spending annually, during retirement?
- How much do you think you will be saving each year, from now until you retire?
- How much will you be collecting from Social Security and any other type of retirement or pension plan?
- What can we assume that your investments will earn throughout your lifetime?
- What will future tax rates be?
- What is a safe amount to withdraw each year from your retirement savings?
- What changes will you be making in your lifestyle and where will you live?
It should be pretty clear that many of these questions cannot be answered with certainty. There are lots of variables and unknowns. Working through this issue will require many assumptions, which will change over time.
This is a critical part of the financial planning process. It is ongoing and it is a process which will be revised and adjusted. As your life and other external factors change and become known, such as stock market returns, we will review and update this analysis. We have software specifically for long term retirement planning.
By going through this process, this will go a long way to relieving some of the stress of uncertainty. The more that we analyze and discuss each of these components, the more confident you will feel. The uncertainty will begin to decrease.
We cannot completely remove the uncertainly of life. Discussing and analyzing whatever issues concern you, will help you feel more comfortable and confident. That is our goal.