What Can You Expect in a First Meeting with Keen Wealth Advisors?
"Sean" is 60, and he wants to retire by the end of this year. His wife, "Mary," is also 60, and she wants to retire in two-to-three years. Maybe.
Sean has an IRA worth $1,000,000 and a health savings account with $5,000 in it. Mary has a 401(k) worth $800,000, an IRA worth $700,000, and company stock worth $100,000. They also have cash savings of about $600,000. They want to be able to spend $120,000 per year in retirement.
Like many couples heading into their golden years, Sean and Mary want to know if their retirement goals are attainable, and they want to know if they're going to be OK.
So, they start meeting with financial advisors.
Many of the advisors Sean and Mary sit down with start the conversation by digging into their finances, showing them charts and graphs, talking about how the market has performed historically, etc.
What happens when Sean and Mary walk into Keen Wealth Advisors?
On today's show, we use a fictional "Sean and Mary" as a case study for how our initial interview process works and how Keen Wealth uses bigger issues about life, purpose, and happiness to create individualized, comprehensive financial plans.
1. What's your family situation?
Before we start talking about Sean and Mary's account balances, we want to know what's going on at home. Some folks in their 60s might be supporting, kids, grandchildren, or elderly parents. There might be important medical issues that can impact a financial plan. And family matters might also impact how seniors are thinking about their legacy planning.
Sean and Mary have one adult child living in Phoenix and another in Kansas City with two kids of their own. The adult kids are doing well, so Sean and Mary don't feel like they need to leave much of an inheritance behind. That tells my advisory team that we can work out a plan to help Sean and Mary spend down their assets gradually over time.
Sean and Mary also tell us that they own two houses, one local and one in Florida worth about $600,000. But because spending time with their grandkids is an important retirement priority, they'd be willing to sell that second home if it helped with their long-term spending plan. We've worked with many couples over the years who've wanted to make similar trade-offs. In fact, if Sean and Mary's kid and grandkids ever left Kansas City, it wouldn't surprise me if they decided to move too so that they could stay close to the family!
Finally, Sean does have some concerns about longevity as his father and grandfather had Alzheimer's. Should he take Social Security at 62, before his benefits mature, so that he can get some use out of them?
Financial planning would be a heck of a lot easier if advisors had one important data point: date of death. Without that piece of information, our goal is to help folks focus on living their best life at every stage of life. A serious family medical history factors into that equation. But so do all the incredible advances in health care we've seen, and will see in years to come.
So, we'll talk about Social Security in a minute. There are still some other things we'd like to know about Sean and Mary.
2. Are you ready to retire?
Sean is! He's looking for advice on how to make that transition this year. The couple wants to earmark $10,000 annually for a travel budget, and they want to set aside $35,000 to spend on a new(ish) car every 8 years or so. That tells me they have places to go, people to see, things they want to do. But I'd also want to hear a little bit more about Sean's hobbies, his interests, and how he plans to fill in all that blank space on his retirement agenda.
Mary isn't quite as enthusiastic about retiring. For some seniors, that might signal money worries, but Mary seems to genuinely love her work. Which is great! For more and more seniors, the decade of your 60s is going to be less about automatic retirement and more about transitioning to retirement as you approach your 70s. If Mary wants to keep working, earning, and growing her Social Security benefits, that's only going to help her and Sean achieve their other retirement goals.
And who knows? Maybe after a few months of seeing Sean on the golf course every other day, having coffee with his friends, and working on household projects, Mary's going to start thinking, "Hey, that doesn't look so bad!" and speed up her retirement timeline as well.
3. How are your assets allocated and how do you want to use them?
For the purposes of this case study, I'm jumping into the numbers much quicker than I would with a typical couple like Sean and Mary. Like any good conversation, the topics mentioned above could lead to other important conversations about activities, relationships, and time that will affect a comprehensive financial plan. But once we feel like we understand where Sean and Mary are on their journey and where they still want to go, we'd start talking about that $2.5 million in tax-deferred money and $700,000 or so that they have in taxable accounts.
A big part of that conversation will be understanding how Sean and Mary feel about investing and volatility. Do they want to start moving their assets into more conservative investments and accept a lower overall projected rate of return? Or are they willing to learn about and tolerate some additional volatility and potentially higher upside so that they may have some extra flexibility down the line? What if one of the grandkids gets into an Ivy League school and they want to help pay for college? What if there's a problem with one of their houses that exceeds the $5,000 per year they plan to spend on repairs? What if Sean decides to purchase long-term care insurance because he's worried about his family medical history?
We'd also start talking about their health care needs as early retirees, specifically if Sean can jump on a plan offered by Mary's employer of if they'd have to purchase insurance from their state's marketplace.
Social Security would be another important consideration. Sean would receive $2,500 a month at age 62. If Mary keeps working until full retirement at age 67, she'd receive $3,500, for a total of $6,000 per month. That's more than half of what Sean and Mary want to spend every month. This is one of those cases where, given the rest of the couple's assets and their goals, maybe Sean taking his benefits early isn't a bad idea.
4. What's next?
Back-of-the-napkin math tells me that Sean and Mary should be able to achieve their retirement goals. But your life doesn't fit on the back of a napkin, a spreadsheet, or a pie chart.
And I believe the same should be true of your relationship to your financial advisor. The work we do at Keen Wealth isn't only about numbers. It's about relationships that last lifetimes and, in many cases, continue into the next generation as well. As those lives change, as those goals evolve, we’ll continue to meet, talk, listen, and adjust so that your financial plan stays in sync.
If our process sounds like a good fit for your retirement goals, call up Keen Wealth and let’s start that conversation.
Bill Keen is a financial advisor with nearly 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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