Thinking Long-Term About Your Money

About Jay Slagle

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Clients often turn to Jay when they start thinking about retirement. Eager to plan for their futures, people need a formula for staying on track financially, so they can retire comfortably and enjoy their favorite pastimes and plans. 

RK is dedicated to helping clients balance their unique lifestyles and hopes for the future by creating adaptable plans and managing financial profiles. 

Jay joined RK in 2012 as an associate advisor. Today, he continues to expand his expertise, working with families and individuals to help them achieve their financial goals. Jay earned his Bachelor’s in Public Administration and Political Science from the University of Tennessee before completing the Knoxville Fellows Program. After developing leadership skills and learning to serve the community, he returned to UT and earned his Master’s in Business Administration with a concentration in finance.

In this article, Jay addresses common concerns and considerations to give you the peace of mind on your journey. 

Am I on Track?

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The financial industry ads and golf tournament commercials tell you that finding the right broker, product or allocation will put you on the sure path for retirement. Our prospective clients meet with us to find out if the steps they’ve taken are enough to get them on that path. They’ve saved, accumulated and balanced necessities and luxuries. But they often have trouble putting these processes together to create the big picture. So they ask us, “Am I on track?” 

What Really Matters?

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Those ads, and the ways many people think about investing, unfortunately, never get at the true question investors are asking. That thinking generates a few pitfalls we commonly see. The number of considerations influencing future prosperity tend to overshadow the impact that those decisions will have.

Buying products instead of processes. 

People often buy mutual funds, an annuity, or an insurance policy, without understanding how it fits into the big picture. Marketing tells us on a daily basis that, if we buy “x,” it will make our life complete. Finance is no different. A product is static—maybe good, maybe bad—but it’s set and doesn’t change with your circumstances.

Focusing on investments instead of planning. 

Investment “guarantees” can take precedence over planning. Clients sometimes get in the weeds about how certain products work without asking whether they need that product in the first place. Instead of asking yourself, “How does this work or what does it do?” ask, “Why would I do this in the first place?”

You likely won’t have the same investment allocation for all of your retirement. Our planning process adapts as life changes to help clients stay on track as their spending shifts year to year and decade to decade. 

Misguided decision-making influenced by the noise of the news. 

Our 24-hour news feed generates questions about making changes in reaction to current events. Inflation, tax code changes, the price of oil, fluctuations in the Dow, international currency crises, a pandemic, wars—all of these unsettle investors. Studies have shown that being disciplined in the face of world events pays off in long-term value.

How Long Will My Money Last?

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We have our clients begin by considering what is most important to them. What, specifically, do they want to accomplish using this money? Once you have those insights, use them as the foundation of your initial retirement plan, balancing your desires with your assets and income sources.

Investors are often intimidated about spending their assets, fearful that they may outlive their assets. Their main concern: wealth preservation. 

For our clients, an investment plan is just the start of the process. We help each client create an investment policy statement (IPS) that addresses each client’s unique appetite for risk—and takes into account the risk required to accomplish their goals. 

What Should I Anticipate?

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More than anticipating the future, a plan helps provide context as life changes. With a solid plan, you’re not making reactive decisions in a vacuum but through the lens of the goals you want to accomplish.

An inheritance, a death, illness or loss of a career—these are a few unexpected events that can change your future. Selling a business is always a reason for recalibration.

What’s Important to You?

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When Rather & Kittrell works with new clients on an investment plan, we first want to learn what’s important to that person and his or her family. 

Here are a few things you may want to think about as you plan.

Security: Most don’t want to run out of money or be a burden to their kids. Plan to be independent.

Retirement: You’ve saved and invested, now how do you know if you have enough and when you can retire comfortably? Draft a timeline.

Selling a business: You’ve built a business. Think about what you can do with it in retirement.

Death of a spouse: Planning ahead is crucial to make this transition easier. Figure out where you stand financially and what might need to change, depending on which spouse is left alone. Consider different ways to manage your financial affairs in various scenarios. 

We all make tradeoffs between retirement age, spending goals and savings capacity. Your goals and circumstances may change, and this plan helps you keep making wise decisions in real time. 

And sometimes, people just have a shift in their priorities. “If we spend $1,000 less each month, could I retire three years earlier? At this point, time is more important than maximizing spending. I’m going to retire.” 

Having an ongoing process to adapt to life (and market) changes over time is what helps clients succeed in the long run. As President Dwight Eisenhower said, “Plans are useless, but planning is essential.”’ In other words, a static plan that doesn’t anticipate changing circumstances is not a useful tool. That is why we recommend reviewing the plan within the first 12 months as life changes. 

There are a lot of things that factor into your future. Rather & Kittrell is here to offer guidance and professional advice to prepare you for the future of your dreams. 

What Am I Overlooking? 

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Every advisor in our industry manages their client’s investments. Some do better than others, but only 6 percent of advisory groups help their clients execute on advanced planning items beyond the investments. Here are just a few of the big-picture items that we help clients consider.

Cash flow: We address how to replace paychecks in retirement and when to take Social Security. Planning for taxes and required minimum distributions are is important, as these factors change throughout life. 

Estate planning: As families change, wills, trusts, financial and health care powers of attorney, and advanced health care directives all need to be reviewed. These planning documents should also be reviewed, updated and summarized when legal and tax changes occur. 

Insurance: Wealth protection often starts with an insurance audit to determine any gaps in coverage. This could involve life, disability, long-term care, homeowner’s, auto, umbrella and other policies.

Philanthropy: Charitable giving is an ongoing opportunity to help clients mitigate taxes and maximize their impact on nonprofits that are important to them.