An ex-wife as a primary beneficiary.  Lapsed stock options.  No medical power of attorney.

What is in common with these items?

They are all avoidable.  Having been involved in financial services for the past 20 years, I have seen a lot of things go wrong.  A lot of these issues could have been avoided with proper planning and review.  But we live in a changing environment.  The burden of retirement income planning has shifted from the employer through the form of pensions, to the employee through the form 401k accounts.

We live in a day and age of index investing and DIY estate planning on the internet.  Generally speaking, there is an app for everything these days.  Apps that can track investments and even prepare your taxes.  Every day you see another ad to drop your financial advisor since this app can do everything for you.  They have created the perfect algorithm that has been “back-tested” that would have worked out great.

The problem is apps don’t have real-life experience.  They don’t know if something is wrong outside of the code of the program.  They are not prepared for a 1000 point drop in the market during a single day.  That has never happened before.   There have been a lot of that hasn’t happened before over the last couple of years.  Stock market volatility is off the charts.  Interest rates are extremely low.  Life expectancies are as long as they have ever been.  Tax and estate laws seem to be constantly changing.

The only thing that seems to be constant is change.

In the end, there is no one size fits all plan.  Everyone has a different set of circumstances, a different puzzle to solve.  There is not one perfect retirement income solution.  What may work for your neighbor, may not work for you.  A plan needs to continue to evolve over time as life changes and the economy changes.  It needs to be reviewed to ensure that you can avoid mistakes that others have made along the way.

In the end, it needs to pay attention to the details.   Can you live the life you want to live?  Are you going to run out of money?  Can you leave a legacy?  What is important to you?

Is there an app for that?  How do you know if anything is wrong until you experience it?


Michael McGinley, CFP ®
Comprehensive Wealth Manager | Tax Advisor
Chandler, AZ 85226