Is Your Financial Advice Holding You Back?

Man with suit and grey hair

How Will I Know? — You’ll know you are getting planning and forecasting simply. If you have reports showing detailed cash flows and forecasts of what your finances might look like over the remainder of
your life, you’re likely doing great planning. You also know by the questions an advisor asks you. They’ll be asking how much you might spend each year, how you are investing, calculating accurately how much tax you’ll pay annually and getting all kinds of input from you – to name a few. As a general litmus test, if you haven’t provided your financial planner with a somewhat detailed list of your annual expenses, you’re probably not doing much in the way of accurate detailed planning. There really can’t be much in the way of solid planning done without knowing your annual expenses. ‘How fast you spend your money each year
in retirement’ is just critical and fundamental.

What Might You Find? — What might you find if you do detailed planning? A whole host of things really. Spending more money earlier in your retirement might actually be ok with well thought-out strategies.
What about Social Security claiming and optimizing your whole net worth instead of just your social security income? What else could there be? Roth conversions are often dismissed due to quick analysis with a wave of a hand or discussion of your tax bracket. You might find partial Roth conversions (even small ones, even after age 73) to be one of the most powerful steps an individual or couple might take. It can mean seven or eight hundred thousand more in after-tax dollars over time. You simply cannot figure this out without software-based detailed planning. I’ll admit many planning strategies start out looking like they might not be such a good idea but turn out to be much more powerful and profitable than expected It takes software and great planning to find out.

What Is Done? — In financial planning, financial planners put numbers into planning software, use a number of assumptions (conservative, moderate and aggressive scenarios) and see if different amounts
of spending can work out, Roth Conversions, benefit of life insurance after the cost of paying the premiums – creating a whole host of problems to solve and solutions to develop. There are simply a lot of scenarios
that the human brain can’t figure out even remotely accurately by ‘thinking about it’. I can tell you it is incredibly hard or impossible for any individual to do in their head what software can do.

Bottom line — Your advice might be holding you back. Get some detailed financial planning done. The latest software is so powerful with tax-accurate calculations. Find a great financial planner and see how
else you can benefit financially exploring different strategies.

This article is written by Eric W. Johnston, CFP®, Financial Advisor and President of InFocus Financial Advisors Inc whose firm focuses on the needs of people in retirement. He can be reached at 410-677-
4848 or [email protected] for questions or comments. His website is

Investment Advisor Representative offering securities and advisory services offered through Cetera Advisors LLC, member FINRA/SIPC, a broker dealer and a Registered Investment Adviser. Cetera is under
separate ownership from any other named entity.

Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. No system or financial planning strategy can guarantee future results.