What Is Financial Organization?

Let’s start this article by telling you what financial organization is not. This is not the same thing as financial planning. Having a financial plan is something that is essential and we fully endorse. But it shouldn’t be your first step! 

The first, and most important step, especially for those approaching retirement age, is to organize your existing finances. Building a plan is the step that follows, but any plan built without consideration of your current situation is going to be faulty. 

We like to start by considering net worth and goals. Knowing how much money you need to retire is, again, based on knowing how much money you currently have. People take for granted the value of their assets, have a few different retirement accounts in different places, and don’t know exactly when or if their pension or any employee sponsored end of career benefits may kick in. 

Net worth is more than just how much money you have though! How many outstanding loans, in the form of credit cards, mortgages, or other agreements to pay something over time, do you have, and when will they be paid off? Things like life insurance are unlikely to be paid off quickly, and can easily be overlooked. The shortfall from missing even one essential piece of information can adjust years of retirement health. Building your financial plan before you have a sense of your current standing is not a healthy way to go. 

Insurance is another key area we like to consider. I don’t like to just talk about health insurance here, either. If you’re into your fifties and your parents are still alive, is there long term care insurance available in case something is needed? Do you plan to let them move in with you? Those payments and the premiums, risks, and events associated with them are so frequently overlooked! 

I’ve rarely met a person with concrete plans for everything in their financial future. It’s completely understandable! Expertise and experience in these areas rarely comes from a single experience. Having done this for decades means that I’ve had the opportunity to see and catch the mistakes you might be making. Often, I’ve caught the mistake that could derail your retirement a hundred times amongst others. 

It’s also important to consider what resources you might have access to and what future trends for your existing assets can look like. Money is never static, and assuming that past trends will continue is an easy trap to fall into. No one can tell the future with any kind of investment, but a rational analysis of the bigger picture can bring things to light. Let’s consider how many jobs have been reduced or fundamentally reshaped by technology—someone with a regular and steady job driving a truck today may see that career disappear completely as self driving cars expand their reach. Or it may change so fundamentally that it can’t be relied upon to make it until retirement age any more. 

I hope I’ve given you a solid overview of just some of the pieces that we look at when we help to organize your finances as you approach retirement. We’d love to have a conversation and help address the individual risks and situations you’re facing, whether you’re 20 years or 20 months from retirement.