Helping People Build a Financial Plan for Life

Planning needs to change as clients go through different life stages.

USA Today recently reported that the typical 65-year-old man living an average lifespan will spend $189,687 in today's dollars on medical care in retirement, while the typical 65-year-old woman will spend $214,565, as women tend to live longer. That doesn’t include long-term care costs, which can prove catastrophic.

It’s no wonder these issues loom over retiring Baby Boomers.

Byron Ellis, financial advisor based in Woodlands, Texas, focuses on the challenges facing this generation.

Planning for the future has always been difficult, and always takes discipline,” he says.

Because Boomers have a longer life expectancy than their Greatest Generation parents, financial professionals must plan for clients living longer than ever before, and with higher health care costs that all Americans now face. He notes that Boomers own more of the responsibility for planning their own retirement, as their parents may have had a pension plan, and Social Security played a bigger role in their retirement. Meanwhile, Boomers must fund their 401(k)s, and have to decide whether to buy stocks or bonds.

Ellis points out it’s not going to get easier for the generation following the Boomers, Generation X.

“Boomers have a longer life expectancy, but it’s even longer for Gen X. Social Security needs fixing. I don’t think it will go broke, but Gen X and Generation Y may have to be older before becoming eligible for it,” he said, adding that Social Security could eventually become needs-based. “The good thing is we’re talking about young people, and the more years they have, the more they can do something about it. Gen X and Y have the luxury of years.”

Imagine a couple living the perfect retirement life, with traveling, spending time with grandchildren and living in a perfect, spotless house with a not a care in the world. The problem is they have a dark, dusty attic or basement – and from a retirement planning perspective, that means in one corner there’s an estate plan needing updating, a portfolio that needs attention, and the need to make sure they don’t run out of money.

Ellis sees the financial planner’s job as cleaning out the attic and building a plan for life. The team works with clients and examines what can possibly go wrong, and how to prevent these occurrences.

byronellis400x600“We build investment portfolios and communicate this simple thing: I’ve never seen anyone mess up retirement in their first 10 years,” he says.

Mistakes usually don’t come back to haunt retirees until later according to Ellis, so he sees it as his job to make sure all decisions made in the first 10 years of retirement help allow people to stay comfortably retired until the end of their lives. That may be accomplished by setting up 10 years of income from the portfolio, designed with the goal of never having to sell when the market is down and still having growth potential.

With clients, the team discusses how they get to have enough money to do everything they need to live the life they want. Needs include putting food on table, a roof over their heads, and healthcare. Wants are the lifestyle they seek in retirement, whether it’s travel or just generally having fun. The last discussion is about wishes, such as the ability to take the family on a major trip annually or wanting to help their kids if they have issues. Clients want to know if they have the ability to make a financial commitment to their kids and not affect their own ability to put food on the table.

United Capital’s planning process isn’t just about meeting needs, they also conduct stress tests. For example, if a client has to go into a nursing home from age 85 to 90, that’s $150,000 annually, and by stress testing he can figure out whether that is a possibility.

Long-term care insurance is more of a choice and dignity decision, says Ellis. He tells the story of one couple who were both teachers and both had long-term care insurance. When the husband went into a nursing home, because of his insurance he was in the best facility. He knows of another couple who did not have long-term care insurance, although they had more money than the teachers. The husband also had to go into a nursing home, but because there was no money set aside for this purpose, he was put in a mediocre facility.

“If he had long-term care insurance, the ending would have been different,” says Ellis.

Yet, United Capital Financial Life Management doesn’t operate on the premise that life is about the money.

“Imagine yourself on your deathbed, your loved ones are around. You’re not going to hold up an investment statement and say this is what you’re most proud of,” he says.

The firm looks for clients who want to experience life, improve themselves and their health, and not necessarily spend time with money. While the firm doesn’t have a minimum investment amount, they typically work with people who have millions of dollars.

“We help people realize what is most important to them,” Ellis says. “You need to do real planning for the lifetime of clients. Planning is not one time ‘Get in the door so I can sell you something.’ Life is fluid, and planning needs to change as clients go through different stages of life,” he said.

When asked about changes he’d like to see in the industry, Ellis mentions transparency, saying there’s too much smoke and mirrors.

“Consumers need to be informed, they need to understand what they pay, and they can assign value to that,” he says.

Offering a comparison Ellis says, when you pay for a meal at restaurant, you know exactly what you’re paying for, and the financial industry needs the same kind of simplicity. Overall, the industry needs to simplify, as financial planning and investments don’t need to be so complicated.

For more information, visit United Capital

 United Capital Financial Advisers, LLC (“United Capital”) provides financial life management and makes recommendations based on the specific needs and circumstances of each client. For clients with managed accounts, United Capital has discretionary authority over investment decisions. Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. The information contained herein is intended for information only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. Please contact your financial adviser with questions about your specific needs and circumstances.


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