Shoulda Woulda Coulda

By Fritz Schafer, with contributions by Chris Schafer. June 29, 2017.

Michael would say this sometimes when someone was bemoaning that they did not begin doing something years ago.  The expression is meant to say it is no use talking about it now, the chance has passed.

A funny thing that happens about a week before a marathon is a tendency to start doubting your training as the race closes in.  This is especially true if you are trying to achieve a specific goal.  It also may happen if you recently struggled with a practice run that you normally do with no problem.  In your head you might think that you should have run more hard runs, or could have gotten more sleep or started training earlier.    It doesn’t help on race day to worry about what you didn’t do three months ago.

In financial planning the stakes are MUCH HIGHER!, especially when it comes to retirement planning.  We have often heard from our clients who are in a stressful job and really, really want to retire think:  Maybe I “shoulda” started saving for retirement earlier.  I “woulda” maxed out my 401(k) years ago, had you known how I would feel now.  I “coulda” skipped a few extra expenses over the years and invested for your long-term goals.

When we are preparing a financial plan for a client, we realize that “Life Happens” and not everything will go neatly as planned.  However, there are a few things that we feel very strongly about and advise our clients to do so they won’t regret it later.  Here are just a few items that come to mind now:

• Develop a plan for all of your financial goals whether they are: Retire at 65, Travel the world,    Start a business, Put your kids through college, Save for a new House, etc…   All of these goals require a plan, and constant monitoring.   What’s the saying, “Man plans and God laughs”?  We realize that plans change, and they often do for very good reasons.   You get married; You have children; You get a great job; You lose a job; You get divorced; Someone you love becomes sick, etc…  Life happens, and we adjust.  That is why you have to monitor progress and adjust as necessary.
• Protect your loved ones. Prepare a Will and make sure your health and life insurance is adequate.  The investment in a low cost term life insurance is one we all hope never pays off!  However, if something were to happen to a key wage earner, the survivors will be grateful for your decision to protect their financial well-being for the rest of their lives.
• Prioritize your goals. The airlines recommend putting your oxygen mask on first before helping children.   The reason is if it takes time to put the mask on your child you may not have time for yourself!  The same holds true for retirement saving.   Of course this is tough on parents who naturally want to provide for their children.   Financially, it is wise to take care of your needs first:    By prioritizing retirement saving over your children’s education, you hope to be able to relieve them of the burden of financially taking care of you later in life.
• For those who are close to retirement – Create a detailed retirement plan before you retire. Research and plan what you want to do during retirement.  If you want to continue to work, do so.  If you want to travel, put it in your budget and plan accordingly.  If you want to move to a warmer climate, make sure your budget reflects the cost-of-living in your new town.  Make certain you have saved enough.  It might not be the end of the world if you put off retiring for a year or two, to make sure you can have the lifestyle you dream of living.  It is better than coming up a few years short of money at the end of your life.   Consider this: each year you delay starting social security up to age 70, your monthly payment increases by approximately 8%.  If you look at this decision as an investment, that is a decent return for one year.
• For those who are healthy and newly retired or retiring soon –  Develop a long-term care plan.  Don’t just look into traditional long-term care insurance.  It can often be expensive, and the insurance companies can raise the premiums over your lifetime Investigate alternatives.  If you don’t know where to look ask us!

The two main ideas that we want to pass along from the “Shoulda, woulda, coulda” blog is 1) the more money you can save for retirement the more options you have in retirement.  You can’t go back and start over, but you can start now.  Planning is the first step to understanding what you need to do to reach your goal.  2) Educate yourself, or seek help.   The financial world like most industries is constantly changing.   Stay tuned in and informed and be aware of opportunities to improve your financial condition.   If you don’t have the time, investigate working with professionals that can help perform this role for you.