Anne Witherspoon, Chief Experience Officer, Messick Peacock & Associates
ROAR Into Midlife with Guidance from a Wealth Advisor
As we approach midlife, a wealth advisor can help review how far we’ve come and provide guidance on where we want to go from here. Here are some strategies to help us all ROAR into the next phase of life successfully:
- Reflect on your values and vision for the future
How long has it been since you took some time to think about your values and how that might influence your financial goals? Perhaps what was important to you in your earlier years is different now as your career has progressed and family dynamics have evolved. This is the perfect time to consider what is a priority for you now and how you might focus on those current values as you move forward. Are you ready to pursue an adventure, work differently, make less income, or is it time to double down on an entrepreneurial desire you have always put off? Perhaps the diligent savings of your early years has accumulated, and you now have options that could result in more personal freedom. Dream and explore what you would do if financial security was in place. An objective wealth advisor can take that dream and test it against your current reality. You might be closer than you think. This values-based plan, tailored to your current stage of life will determine the best investment strategy which may require more liquidity, or could allow for more private investing with higher return potential. This is the time when a custom strategy must be built specifically for you.
- Observe planned vs actual
Your original plan may have been to provide an education for your kids, retire at age 65, and move to a better climate. Now is the time to determine if you are on track or have already accomplished and surpassed those goals. Perhaps you have excess college funds that will not be needed to fund college for your children. Many people save in a 529 Plan and there are ways to use those accounts for something other than college. You may have far more equity in your home than you expected and strategies to monetize that equity as part of your plan without leaving your home might be important. There are also strategies that your financial advisor can help you create to allow you to access IRAs and 401ks before you reach age 60, assuming you are on track to fully fund retirement. This stage in life is the opportunity to avoid generic advice and start to consider ways to craft strategy that aligns with your ideal future.
- Adjust estate planning strategy
Some parts of a good plan are easier to ignore than others. Estate planning is often out of date or ignored altogether. It’s important to ensure your estate is in order. Wills and trusts, appropriate levels of insurance, and other estate planning documentation should be established or revisited. A wealth advisor will not only have advice on what changes to make but will be able to coordinate with an attorney to make sure everything is executed accurately. Maybe you are part of the “Sandwich Generation” that is simultaneously raising young children while caring for aging parents. A wealth advisor can create a plan to help ensure that you are better able to successfully balance those demands. Estate planning is about establishing orderly management and distribution of your wealth in accordance with your wishes. This is welcome relief to children and family as it avoids leaving them with difficult decisions in the event of an incapacity, illness, or death. For some, estate and gift taxes should be considered. Annual gifting to family members, charitable giving to a religious, educational, or socially impactful non-profit organizations can be part of this planning. The importance of vision and values is critical in this part of your plan and a thoughtful discussion with a wealth advisor can be a great place to start.
- Revisit your overall strategy
The world has shifted in the last three years. Post-pandemic goals have created a profound shift in what is possible. In addition, after more than a decade of low interest rates, surging stock markets, and significant wealth creation, the last 15 months has shifted the financial market options to a more historically normal playing field with higher rates, more reasonably priced equity markets and yes, higher inflation. Therefore, after consideration of your values, vision, actual financial status, and your estate, it is important to acknowledge that a new set of aspirations and goals will likely mean a recalibration of your portfolio strategies to take advantage of a new landscape. In partnership with your wealth advisor, review your portfolio to ensure you are set up for future success. Perhaps your portfolio balance of equities and debt should be adjusted. International investments have lagged for over a decade but look more attractive in this new landscape. The public markets no longer are the only game in town as strategies once available only to institutions and the very wealthy are now very appropriate and accessible for personal portfolios. Many of the world’s best, most dynamic firms are private and are not accessible through a public stock or index fund. A credentialed wealth advisor can help you evaluate if these portfolio strategies are appropriate for you and develop a customized plan. Statistics show that a customized portfolio strategy aligned to personal goals is far more likely to succeed when the inevitable economic and market volatility occurs. A wealth advisor can help you stay committed and avoid the common mistakes that are make during market turbulence. Take proactive steps to ensure your investment strategy aligns with the goals of your overall life plan, and that the strategy will support your next phase in life—which will help give you the confidence to blaze the road ahead and ROAR forward.
Chris Messick, CFP, CPWA, and David Peacock, are the co-founders of Messick Peacock & Associates, a boutique wealth management firm in Dallas, Texas. They believe you should never stop growing: financially or personally.