You’ve followed all the financial rules-of-thumb to the letter -- diligently saving at least 10% of your income, maxing out your retirement savings accounts, avoiding high-interest debt, living below your means -- and assuming (or crossing your fingers) that you’ll be set for retirement and whatever life throws in your path until then.
But how confident are you that you’re truly on track?
Back-of-the-envelope calculations and simple online retirement calculators aren’t exactly the most reliable ways to ensure with confidence that you’re going to reach your goals. And do you really want to leave something this important up to guesswork?
Accounting for All the “What Ifs”
Will your money run out before you die? That may sound crass, but it’s the question that every investor needs to answer… with certainty. The only way to do that is to crunch the numbers and consider all of the potential scenarios. For example:
- What if you or your spouse decides to exit the workforce for a while to raise children?
- What if stock market returns are lackluster for the next 10 years?
- How will higher education costs or caring for an elderly relative affect your investable resources?
- Exactly what income will be required in the future to provide the lifestyle you envision for you and your family?
- What areas of your portfolio are most vulnerable to market fluctuations?
- What if Social Security doesn’t provide the same level of benefits in the future?
You can’t really know if you’re saving enough for your future -- and saving in the right way -- until you put your investing plan through the paces by using historical returns and other reality-based scenarios.
This is the kind of rigorous testing planners do for their high net worth clients. Using sophisticated calculations and modeling, they regularly take the temperature of a client’s portfolio and advise them about everything from how to allocate incoming money to ways to minimize tax bills.
Bottom line, these advisors measure the likelihood that a client’s portfolio will deliver long-term results -- a.k.a. not run out of money before they die.
Get a Free Analysis of All Your Investments
These days you don’t need to have a $1 million, or even $100,000 portfolio to get a professional read on your portfolio and customized advice on how to tweak your current holdings so that you are on the right path. Thanks to automation and the widespread availability of low-cost indexing strategies, FutureAdvisor gives everyday investors access to the same management tools and advice.
In just a few minutes you can see all of your investment accounts in one place. We’ll run a detailed screen of your existing holdings and evaluate everything you currently own. We’ll then design a well-balanced, low-cost, risk-appropriate portfolio to get you on the best path to your goals -- at absolutely no cost to you. (If you decide to have us implement the plan -- which you can adjust further to customize to your needs -- we charge just 0.5% annually… and 401(k) advice is always free.)
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This material is provided for educational purposes only and is not intended to constitute “investment advice” or an investment recommendation within the meaning of federal, state, or local law. Nothing in this blog should be construed as a forecast, a guarantee of future results, or a solicitation, offer, or recommendation to buy or sell any security. The investment strategies mentioned are not personalized to your financial circumstances or investment objectives, and differences in account size, the timing of transactions and market conditions prevailing at the time of investment may lead to different results. The opinions expressed may change as subsequent conditions vary. FutureAdvisor will not be liable for any direct or incidental loss resulting from any action, inaction, or reliance on the information contained in these materials or from any other source mentioned. FutureAdvisor does not render any legal, tax or accounting advice and the education and information contained in this material should not be construed as such. Please consult with a qualified professional for these types of advice.