When it comes to financial planning resolutions, creating an action-oriented plan includes figuring out where you are, what you want, and what you need to get there. These may seem like big, overarching questions, but they can be broken down into a few smaller questions that are easier to answer. Everyone’s family situation, needs, risk tolerance, and time horizon are different, but the questions we need to ask ourselves are likely quite similar.

We can help secure your legacy with a charitable trust.

In order to determine the most appropriate resolutions, the first step is to narrow down what your financial planning time horizon is. This timeline is based on your age, and each stage brings with it a common question that is likely to guide your life decisions during that time.

Ages 25-35 Question: Do I know enough financial planning basics to build wealth?

The skills to manage money, just like one’s credit score, are built and maintained over a lifetime. Every journey has a beginning, and it’s normal to be a little lost and to make lots of mistakes in the beginning. The good news is, there’s still lots of time to adjust the course and or seek familial support and guidance if needed.

During this period of life, one should be asking questions like:

  • Will I have enough money to cover a short-term emergency?
  • How does my credit score compare with my peers?
  • Will my family be taken care of in the unlikely event that I pass away?
  • At what point can I afford home ownership given my current savings rate?
  • Have I taken on more debt than I can handle with my current income?
  • Am I spending too much money?

These may seem like thoughts that can cause anxiety, but each can be assessed and addressed, so they instead fuel planning, preparation, and a resolution.

Some of these questions can be answered using Arvest’s calculators, or by reading the educational series on Arvest’s Share blog. For example, there is a four part series on understanding and building your credit score, as well as an article demonstrating hypothetically how improving your credit score and investing the resulting potential savings could lead to over $300,000 more in retirement.

Other questions can be addressed in the context of creating a budget and using designated accounts and amounts for each area of focus. Some questions be answered through trial and error, and others by conferring with peers or a financial professional. Time tends to pass quickly, and before long it is time to focus on a new primary question:

Ages 35-45 Question: Am I correctly managing my liabilities and risk?

When we are no longer kids, we realize life is not just about making money and spending money. It’s also about investing money and off-loading potential risks to help turn large problems into small ones. Questions begin to appear, such as:

  • What will happen to me if I am unable to work?
  • What will happen to my family if I die?
  • What will happen to my portfolio if an asset class crashes?
  • What will happen to my savings’ purchasing power over time?
  • Will I be able to afford to send my children to college?

Although you may find information to answer some of these questions right away on the Arvest Insurance Portal, this would also be a good time to schedule a conversation with an Arvest Wealth Client Advisor, if you haven’t already. They can explain how inflation could impact your wealth over time, develop a portfolio designed to match your risk tolerance, and introduce you to tax-preferred accounts intended to align with your goals—such as 529 plans for education saving and IRAs for retirement planning.

Ages 45-65 Question: Will I have run out of money when I retire?

It may seem premature to start asking this question at 45. However, the more time you have to grow your money for retirement, the easier it may be to answer. Additional questions over the next 20 years should include:

  • How much money do I need to retire comfortably?
  • Am I adjusting for risk appropriately in my portfolio each year?
  • How do I want to spend my time once I’m retired?
  • Where do I want to live once I’m retired?
  • What should I do with a sudden windfall/inheritance?
  • Am I maxing out my tax-preferred plans such as a 401(k), IRA, Roth IRA, HSA each year?
  • Should I add long-term care into my insurance mix?
  • Do I have a plan in place to keep the family business in the family?

The stakes are higher, and with higher stakes comes the need to be more flexible. Watch for changes due to familial obligations, careers, or entrepreneurship. Regardless of whether you are meeting with a financial advisor or not, you should be thinking through these questions at least annually at this point, and reviewing your financial situation for both the long-term and the short term.

Ages 65+ Question: How can I create a lasting legacy?

During retirement there is a large increase in the amount of unstructured time, the possibility of running out of funds, and the risk of diminishing physical fitness. Balancing these three areas in order to maximize the fun of retirement can be a challenge, as they tend to counterbalance one another. Many people are also focused on creating a lasting legacy for their heirs, which means it is important to manage money well during retirement so there are funds remaining that can be passed on. This may also bring up questions such as:

  • When should I start receiving Social Security?
  • How long am I likely to live?
  • Do I have enough long-term care insurance?
  • What accounts should I draw funds from first?
  • Who will manage my finances in case of incapacity?
  • Will my heirs have or need access to my estate immediately?
  • Can I ensure my heirs have positive reinforcement from the inheritance I leave them?

One of the most impactful gifts that can be given to heirs is time and space to grieve without financial implications. This can be achieved through trust services, including a plan for the orderly transfer of assets. A living trust brings the benefit of a professional who is ready to step in in the case of incapacity, and effectively manage finances in the way you desired. You can include incentives in the trust to ensure your heirs only have access if they meet certain requirements, such as sobriety, or if they are using the funds for a particular purpose, such as travel expenses for family reunions.

A great place to explore whether a trust is right for you and your family is in a meeting with one of Arvest’s Trust Officers.

Every year, ask yourself – Should I get a second opinion?

If you already feel you’ve answered all these questions and have a financial plan in place, that’s great news. You may feel comfortable given your current level of financial knowledge. However, the greatest cost to getting a second opinion is your own time, and the greatest gain is peace of mind. At Arvest, we’re pleased to provide financial assessments so you can make informed decisions to support your bright future. We’re ready to help you feel confident knowing you are building financial independence for yourself and those you cherish.

This content has been prepared by The Merrill Anderson Company and is intended as a general guideline.

© 2023 M.A. Co. All rights reserved.

Arvest Wealth Management does not offer tax or legal advice – consult a professional.