Ah, peace.
But what about that so-called “extra” money? This new phase is now only one step away from The Big One: Retirement. Depending on when your offspring fledged, that could be 20 years off, or just five. There’s no über-parent to take care of this for you. Are you prepared? Do you have enough money to last you through the final frontier? Do you understand your own investments? Your risk tolerance? Future goals? And just because you’ve got your health now, well, who knows?
Ah, panic.
How Much is Enough?
Mary Malgoire, founder and president of the Family Firm in Bethesda, a comprehensive financial-advisement company, says that many people find themselves on this fiscal seesaw.
“The assumption,” she says, “is, ‘Oh, goody! We have freed up cash flow because we suffered so much getting these kids on their way.’”
In a perfect world, these folks would also be preparing for their own retirement during the family years, says Malgoire. “What we find is that people have actually put their kids through college and that’s been such an intense effort, they haven’t been able to focus on putting their financial house in order.”
And what a house to put in order: Beyond the obvious—savings and investment accounts, 401(k)s, pensions, and stock options—there’s also the estate plan, insurance of all flavors, proper asset allocation, long-term care provisions, making lifestyle choices, controlling spending, and completely comprehending how it all plays out in the end.
In short, will you be short? Hard to tell without help. Sounds like a job for…no, not him. Rather, a financial planner. These experts offer beneficial services on so many levels—organizing your financial life, ascertaining your current and future worth, and teaching you to manage your pennies for ultimate financial freedom. Most of us wouldn’t tackle our own plumbing problems, so why go it alone in an area where the potential for disaster runs higher than an overflowing tub?
Don Lord, a certified financial planner who’s been with the Family Firm since 2000, says that clients come to him so that ultimately that can have the freedom to enjoy their lives without jeopardizing their futures—a different sort of client than those just embarking on adulthood.
“They’ve got more assets now, and it’s a shorter timeframe. It’s time to be conscious and prudent,” he says. “We help them manage their own behavior. We get all the information, build the model, look for pitfalls and opportunities, and come up with a comprehensive plan.”
The path to this plan is not necessarily straight, though. Everyone must resolve three major “obstacle” questions when figuring it all out, says financial advisor Sam Llanio of Constellation Financial Services in Lutherville. “The first is longevity: Who will live longer—my money or me? The second is inflation: Will my money stay strong? The third is legacy: Can I establish a legacy?”
These issues are complicated and can get thrown off by emotion. After all, who wants to consider the date of one’s death while ascertaining sufficient cash flow until that inevitable date? This is why allowing a financial planner to guide the process can greatly help.
So, How Do They Do It?
Unlike the carefree, time-to-recover days of youth, people approaching the half-century mark should “back off slightly on risk factors,” says John Craten, a certified financial planner at SunTrust Bank Headquarters in Baltimore. “Growth is still important, but you should start getting more income-oriented. As you get older, you’re going to get even more defensive. You want to lock in what you’ve saved.”
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