Out of the 10 facets of Return on Life, this is the most financially intensive. The key to achieving a Return on Security is planning ahead to protect yourself from adverse financial situations. If you’re asking: “What happens if…” and you have definitive answers for varying scenarios, you have achieved a Return on Security.
Are you protected from a potential disaster scenario? What happens upon a death or disability of a spouse? How will you deal with a significant stock market decline? Planning ahead to ensure you have adequate insurance coverage, savings and an appropriate asset allocation alleviates the need to make important decisions in a crisis mode. As we always say, it’s better to prepare than to repair.
Working with an advisor to create a financial plan helps put the context behind the numbers. While setting specific goals is important, trying to reach an arbitrary portfolio value is meaningless without knowing what the projected expenses and income sources will be in retirement. By setting an arbitrary number as your finish line, you may still be working or making excess retirement contributions when you could be doing more productive things with your time and money.
Creating a financial plan will help set parameters on how certain decisions you make will affect your plan. Without the security of a plan, you may find you’re holding back on opportunities and experiences that would help you achieve the best life possible with the money you have!