Myths in Financial Planning
There are many myths in Financial Planning.
My personal favorite is the myth that the Last Will and Testament overrides your beneficiary assignments.
Often a client will go to the effort of meeting with an attorney and drawing up a perfectly adequate Last Will and Testament only to have it undermined completely by the beneficiary assignments in their retirement accounts, annuities and life insurance policies.
This can be a real problem if there is a special needs beneficiary in the family. Beneficiary assignments should be discussed (and amended if necessary) with your attorney.
My second favorite myth is that there is no need to plan for long-term care because it will all just work out fine. I have been approached many times by families in desperation after they realize that a loved one is going to spend down all of their assets. There is not much they can do about it at that point in time. Whether the client decides that Long Term Care Insurance is part of the solution or not, they should have a concrete plan of action. They should have a family meeting where these issues are discussed. The decision to purchase Long-Term Care Insurance is a family decision based on the client’s financial assets and health and their viewpoint. I often create a Retirement Scenario Report looking at how long the assets will last with or without Long-Term Care Insurance to help clients decide if they can afford to self-insure or they need the coverage. The important thing is that people need to think it through and make an informed decision.
Finally, the third myth is that you can continue to save very little AND still have enough to live comfortably in retirement.This is one of the things YOU have direct control over. My goal for all of my clients is to save 15% each year.
If you have additional questions, please feel free to call my cell phone at 201-650-0753. Also, check out our website at:
Timothy Watters, CFP