First, a financial plan of some sort or another answers the “why” question. Investing without knowing your purpose opens you up to possibly kicking all kinds of hornet’s nests.
You have to get purposeful with your finances. “I want to make a whole bunch of money” is an acceptable goal when you’re in your 20’s, but for anyone seriously planning their retirement, it is just not enough.
You have to approach investing strategies from a more nuanced perspective. So, we insist on a plan to figure out your “why” before we can figure out the “how”.
Mainstream financial planning focuses on anxiety-inducing “probability of success” calculations, as if we all lived in a gambling simulation. They even call it a “Monte Carlo” simulation. That’s a ‘tell’.
Life is not a game of chance. We all get one shot at this, so let’s not screw it up.
When presented with a “probability of success” of say 75%, I’m asking, “What about the other 25%?”
That’s how we plan: The 750 out of 1000 simulation successes will take care of themselves. We need to build a plan for the 250 outcomes that are projected to go sideways.
We live in the real world. Instead of asking and answering, “Am I going to run out of money?” we’re asking and answering “How much can I safely spend right now?”
An analogy:
Think of traditional retirement planning like a standard car speedometer. It tells you how fast you’re going, but not how to drive through a storm.
We’re like a smart, variable-speed cruise control. We continuously map out the terrain ahead—taking into account your current age, the exact mix of your accounts, inflation, and tax laws—to calculate your safe cruising speed.
We call this speed your Spending Capacity (or your monthly retirement paycheck).
Mainstream planning only worries about the risk of overspending (running out of money). We cover that, but also introduce the risk of underspending. If you live too conservatively out of fear, you miss out on taking trips and enjoying your hard-earned wealth while you’re healthy.
So, we work with you to set a ‘cruising speed’ in retirement that balances both. We target a safe zone where there’s typically about an 80% chance of underspending (leaving a massive safety cushion) and only about a 20% risk of ever needing to make a downward adjustment.
How Do We Keep You on Track?
Imagine you are driving down a highway. You don’t need a perfectly straight road to stay safe; you just need clear lane markers to tell you when to nudge yourself back into your lane.
In your retirement plan, we monitor your Account Valuation Guidelines. These are the white and yellow lines on the road and we call them your guardrails.
As long as your portfolio balance stays in the middle of the lane, you don’t change a thing. If you drift too far to either side, we make a gentle adjustment to put you back in the center.
For example, let’s say today your portfolio is worth about $1.4 million, which funds your $8,500 per month “Retirement Paycheck.”
If the stock market does well (we can help with this!) and your portfolio grows to $1.6 million, you hit the upper guardrail. Our systems trigger a ‘prosperity rule’ – giving us the green light to safely raise your spending to $9,000 per month so that you can better enjoy your retirement.
Conversely, if we hit a bad recession and your portfolio drops to $1.1 million, we hit the lower guardrail. Rather than panicking or watching the plan ‘fail’ (that’s the 25% from above), we simply tap the brakes a bit and reduce spending slightly to $7,900 per month to protect your nest egg until the storm passes.
The Difference Between a Financial Plan and a Paperweight
Some guys charge $3,000 or more for AI-generated reiteration that they print out and put in an impressive gold leaf engraved leather binder.
And then it sits and ages. But not like a fine wine. It gets stale. Quickly.
We’re not printing out anything… and we’re certainly not buying leather binders.
What we do is far less ‘showy’, yet far more useful:
We breath life into your plan by monitoring it every single month.
We automatically reconcile your actual account values, track how inflation is behaving, and adjust your guardrails as you age. If the market drops 15% tomorrow, you don’t need to panic. You can log into your portal and see exactly how far away you are from your lower guardrail.