The Top Three Financial Pursuits for 2020

How will your finances change for you this year? There are many paths you can take to reach the peak of your financial goals. A common area of discussion with our clients is managing and living with uncertainty. Financially and in life, you can make assumptions, leave room for a margin of error, set goals, review progress and make adjustments along the way. However, in some situations, uncertainty can paralyze one from taking any kind of action. Although lack of action can be good or bad depending on the situation, it’s often beneficial to think things through with your circle of trusted advisors. This way, you’ll have the opportunity to hear different perspectives, learn from those with more expertise and calculate objectivity.

Follow these three financial pursuits to secure your future wisely:

Solve Your Puzzle

Setting up realistic financial goals is key. If you don’t have any goals, it can lead you somewhere you didn’t want to be. Likewise, setting unrealistic goals can also lead you astray. If you’re unsure how much you’ll need to maintain a comfortable retirement, don’t just estimate based on a wild guess. Not only is that unrealistic, it’ll bring financial stress because you may never achieve your goal.

Successful people plan for the future and adapt as needed. Recall the last time you built a jigsaw puzzle. The box cover served as a guide, the puzzle pieces were spread on the table, and a group – often friends or family – helped you assemble the puzzle. Your puzzle today might be how to reduce debt, save for retirement, exit your business, or care for an aging loved one. Your challenges may be difficult, but if your goals haven’t changed, then stick to your plan. Or perhaps you need to rethink your goals, re-map your action plan, or bring new resources to the table to assist you. Adversity strikes, but the persistent prevail.

Retire Later

The question of when to take Social Security retirement benefits can be complicated. There are generally three key ages for consideration – reduced benefits as early as age 62, 100 percent of benefits at your full retirement age (generally between 66 and 67 depending when you were born) and higher benefits if you defer to age 70. However, it’s estimated that 57 percent of retirees elect to take Social Security early, thereby permanently reducing their benefits from then on.

Consider retiring later. You’re projected to get more money – the estimated lifetime benefit of collecting Social Security at full retirement age is about 20 percent greater than benefits at age 62, and about a third higher if you wait until you’re 70-years-old. Second, the survivor benefits for your spouse could be higher (in the event of your death, your spouse may be entitled to half of your benefit or their own retirement benefit, whichever is greater). And third, your retirement savings may last longer because you’re not touching them until later.

Keep Your Balance

There’s an old saying that says, “Money can’t buy you happiness, but it does bring you a more pleasant form of misery.” Consider balance in two main areas: First, your financial plan is more than celebrating a double digit return on your 401(k). It’s about the tens of thousands of dollars you might save by refinancing your home to a lower rate, shorter term loans or by paying off your credit card and student loan debt. It’s also about:

  • Having the right amount of insurance
  • Naming the proper beneficiaries, guardians, co-trustees and powers of attorney
  • Tax and retirement planning opportunities for you from the new SECURE Act
  • Exit planning for your business
  • Revisiting your philanthropy

A comprehensive personal financial plan helps weave and coordinate many areas of your life. Don’t forget about balancing your career, relationships, well-being, spiritual and personal goals.

May the new year be an opportunity to get things right. Expect the best, plan for the worst and prepare to be surprised. Secure your future wisely.

About Brian Loy

Brian Loy writes insightful and inspiring articles about the ever-changing world of personal finance and the global trends that affect the risk and return on investments and shape the financial- and retirement-planning process.
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