Page 103 - December 2021

RUNNING THE NUMBERS
After you have organized all of your goals and assets, it’s time to run some calculations to see where you stand.
A good financial planner will account for inflation each year and calculate the increase in spending. Spending $10,000 today is much different than spending $10,000 in 20 years. At a base inflation rate, $10,000 is the same as about $15,400 in 20 years. Your financial planner should account for the spending increase to ensure you stay ahead of the curve.
While completing a plan, your social security benefit will be in the conversation. Your planner will tell you that your benefit should increase each year you delay. As some of you may know, you are able to draw on social security when you turn 62. This is called early retirement age. You can delay that benefit all the way until age 70, or late retirement age. Each year you delay your benefit, you will get an 8% increase.
These are estimates that a knowledgeable financial planner will calculate for you when working on your financial plan. This is just one example of what your financial planner will be able to assist you with while creating your plan.
ACTION ITEMS
More often than not, people leave with some action items after the plan is complete.
When a plan isn’t at the success rate we want, there are a couple of ways to make the plan work. One option is to retire later. Most people in the horse industry like working too much to retire anyway. Next is to contribute more to retirement accounts. Finally, an option is to make more money. This option isn’t always feasible, but there are certain situations where people could be collecting rent or working more hours.
Aside from increasing the success of the plan, another item to add to the to-do list is an estate plan. I wrote an article about the importance of an estate plan that appeared in the May 2021 issue of Speedhorse. Getting your estate plan
in place will make life much easier for your beneficiaries when you pass away.
Another very common action item is consolidating accounts. Many people will have several accounts in different places. Consolidating accounts could make life much easier. I like to think of action items as a good thing. It’s a way of saying that you’re on the right track.
To conclude, I’ll say that adding a financial plan to your to-do list could drastically change how the rest of your life plays out. The tools within the plan provide so much detail that you can have a near exact idea of how much to spend and how much you need to save. A good financial planner will be able to tell you what return you need to achieve in order to reach your goals.
The point I’d like to leave you with is that it’s never too late to create a financial plan. Starting young almost always proves beneficial in the long run.
FINANCIAL PLANNING
“According to studies, people who write down their goals and track their progress are 50% more likely to achieve their goals.”
SPEEDHORSE December 2021 101