Combat Risk Head on
Save early; save often.
Four short words often said by financial advisors; but far too many Americans pay no heed.
Many people haven’t saved enough for retirement and as time marches on, the opportunity to maximize saving potential lessens.
Ed Guanill, owner and president of Guanill Wealth Management based in Sacramento, California, encourages his clients to reverse this decades-long trend.
“We encourage employees who have access to a 401(k) or 403 (b) to start with something. Anything,” he said. “Develop that habit of saving early on. Too many pre-retirees and retirees started too late because life happens. They raised their kids, paid off debt and sent the kids to college, but now they are more than a little bit behind on saving for their own retirement.”
An August 2020 survey by FinanceBuzz highlights just how little saving is going on in the U.S: 29 percent of Americans admit to saving only one to five percent of their income. Another 34 percent say they save six to ten percent. The rest aren’t saving at all.
Guanill understands that retirement planning can be overwhelming. Yet, he believes it is vital that his clients take an active role in the financial planning process and improve their financial literacy.
“Financial speak is a different language for a lot of people,” he said.
While most clients can’t explain the nuances of how a mutual fund is managed, Guanill says that clients can improve their financial literacy to understand such concepts as “reducing equity exposure” and “rebalancing to a more conservative allocation.”
That goal is what guides Guanill Wealth Management Wealth Management’s proprietary process called, “Income First Planning,” Clients are educated on the “Three Silent Risk Factors:” taxes, inflation, and the rising cost of health care.
“These risks are moving targets that we just don’t have control over,” Guanill said.
But clients do have control over creating multiple income streams for retirement, which he sees as the best way to combat the impacts of the silent three – especially health care, more specifically long-term care.
Guanill describes the insurance industry’s approach to long-term care as a “catastrophic failure.” Noting that the industry had vastly underestimated how long Americans would live combined with charging low premiums when long-term care policies were first issued, the industry has now had no choice but to raise long-term care premiums far too high for most to purchase.
Hybrid insurance solutions address long-term care needs and make one dollar do the work of three, Guanill explained. Instead of a “use it or lose it” policy, the hybrid covers three scenarios: a death benefit, providing for additional income in retirement, and providing long-term care benefits.
“A single funding plan that will do three things,” he said, adding it is an effective tool he uses in fulfilling his primary focus. “I want to make sure my clients have all the income they are going to need in retirement.”
To learn more Guanill Wealth Management, visit: edgwealth.com
