The Guided Retirement System
Key Points – The Guided Retirement System
- The Guided Retirement System Functions as a Retirement Road Map
- Discovery Meeting, Delivery Meeting, Implementation Meeting—Oh My!
- The Guided Retirement System Doesn’t Stop Once the Plan Is in Place
- Going through the Client Portal During the Implementation Meeting
- Covering Tax Planning, Estate Planning, and Insurance During Review Meetings
- 13 minutes to read | 23 minutes to listen
At Modern Wealth Management, our team is committed to providing clarity, confidence, and control to clients and prospective clients in their financial life. The Guided Retirement System was created to do exactly that. Logan DeGraeve recently joined Dean Barber on the Modern Wealth Management Educational Series to share how the Guided Retirement System gets people to and through retirement.
The Retirement Road Map
While spring is slowly but surely blooming, the summer months will be here before we know it. Year in and year out, we always enjoy hearing about some fun summer road trips from our clients. When you think about it, there are a lot of parallels between a road trip and retirement.
As you enter your destination into your GPS, it’ll tell you an estimated time of arrival and fastest route. The same goes for retirement planning, as you outline some initial goals that you want to reach once you retire.
Well, the thing is that the ETA that your GPS tells you as you pull out of your driveway won’t likely be the time you actually arrive at your destination. Your GPS doesn’t know how often you’ll be stopping for gas, food, the restroom, or what traffic you’ll encounter. Likewise, some of your retirement goals are likely going to change, even if it is ever so slightly.
That’s why it’s critical to have a comprehensive, forward-looking financial plan to help ensure that you have the highest probability of success leading up to and through retirement. As our clients know, our Guided Retirement System does exactly that. Logan DeGraeve recently joined Dean Barber on the Modern Wealth Management Educational Series to highlight the ins and outs of the Guided Retirement System.
What Is the Guided Retirement System?
In short, the Guided Retirement System is a proprietary system that is designed to guide people to and through retirement. Dean finds it interesting that the instance that someone realizes that they’re interacting with a CERTIFIED FINANCIAL PLANNER™ Professional in common passing, the first thing that is usually asked is, “What should I invest in?”
Well, that might be the first question that they want to know the answer to, but there are several questions that need to be asked before that. A financial plan for that person needs to be completed before the CFP® Professional provides guidance on what they should invest in.
“We need to understand how you think and feel about money, what’s important to you, and what that money needs to do for you,” Logan said. “You only need to take as much risk as you need to accomplish your goals. If you ask me, ‘What should I invest in?’ the first time you meet me, my answer will be, ‘I don’t know. I don’t know anything about you.”
Step One of the Guided Retirement System: The Discovery Meeting
The Guided Retirement System begins with a discovery meeting. During the discovery meeting, the CFP® Professional will take you through a prioritization exercise. This can take anywhere from about an hour to two hours, but it covers all the basics—who are you, what do you want, and what’s important to you.
“In the discovery meeting, there are a lot of times where couples even learn things about each other,” Logan said. “It’s amazing how often it happens where one spouse says that something is important to them in retirement. Then, the other spouse goes, ‘It is? We’ve been married X-amount of years and I didn’t know that.’”
The powerful impact of the discovery meeting develops as each spouse takes their turn expressing what’s most important to them. The other spouse listens while their spouses share what’s important to them, and then the roles reverse. Once each spouse has their turn, that’s when the dialogue opens up and the CFP® Professional takes the things that are important to both so they can see the top five things they want as a couple in retirement.
It’s Not All About Investments
After those mutuals goals have been outlined, they CFP® Professional can start to show them the resources that are available for them to accomplish those goals.
“The best part of the discovery meeting is that we’re not talking about stocks, bonds, and investments. It’s simply, ‘Who are you and what do you want to do?’” Logan said. “People come to us and they have this stuff—pensions, Social Security, investments, etc. What does that stuff need to do for you? You didn’t work this whole time to twiddle your thumbs in retirement.”
Dean has more than his fair share of stories to tell of people who have lived out their dreams in retirement because of their discovery meeting. He recently talked to some of his clients who were preparing to take a transatlantic cruise. Dean already knew they were going on that cruise. How? Because it all started with the first step of the Guided Retirement System.
“We worked together for almost 10 years prior to their respective retirements three years ago. When we were putting their plan together, one of the things that they said was super important to them was traveling,” Dean said. “I said that was great but wanted to expand on that. I wanted them to think about where they wanted to go and what kind of trips they wanted to take. That led to another discussion about specific trip ideas. We needed to put price tags on those trips. I wasn’t going to just guess and say they needed $10,000-$15,000 for the trip.”
Creating a Plan Centered Around Your Retirement Goals
It’s been immensely gratifying for Dean to see that couple starting to go on the trips year by year that they had planned over the last decade. They know that it’s OK to go on all the trips because they’ve priced them into their financial plan.
“The cool part of Dean’s story is that once he knew all that stuff about them, he could make changes to their portfolio and knew how much risk they should be taking,” Logan said. “I guarantee you that they’re not worried as much about the volatility in the market as much as they would be if they hadn’t done the work to create a financial plan.”
Dean knows the volatility isn’t a concern for them. Why? Because he worked with them to set aside different pockets of money to do those things—like traveling—that are very important to them.
One reason why that couple has had a joyful retirement is because they started working with a CFP® Professional 10 years before they retire. People who are five to 10 years from retirement is typically the pre-retiree demographic that we start working with, but the earlier, the better when it comes to getting started in the Guided Retirement System.
You Might Be Able to Start Living Your Retirement Dreams Before Retirement
Let’s say that a couple has an even bigger purchase that they’d like to make in retirement, such as a second home. Well, the earlier they start working with a CFP® Professional to make a plan that incorporates that dream, the better the chances are of the dream coming to fruition even earlier than they expected.
“For example, a couple might want a second home in Arizona or Florida,” Logan said. “There are a lot of times where those folks can afford the second home then and don’t realize it. You don’t necessarily need to wait for retirement if you can afford it beforehand. The most precious commodity that we all have is time. Why would you rob yourself of that? Find out if you can have that Florida home sooner rather than later.”
Money Isn’t What Matters Most
Traveling and second homes have long been popular answers in the prioritization exercise, but everyone’s retirement is still unique. However, there’s one answer Dean has never heard and never wants to hear when he asks someone what is most important to them. That answer is money.
“Money is just the fuel or the engine that allows you to do the things that you want to do. Sometimes, there are tradeoffs,” Dean said. “You might not be able to do everything you want to do if you don’t have the resources for it. But that’s why we call it a prioritization exercise in our discovery meeting. We’re really trying to understand what is important to you.”
Step Two of the Guided Retirement System: The Delivery Meeting
So, now that we understand what’s important to you and what resources you have, it’s time for the deliver the high-level, preliminary financial plan. Here’s how Dean describes the concept of the delivery meeting.
“If someone has never built a house from scratch, I think they can still envision it. When you build a house, you don’t just take a picture of your dream house, walk into Lowe’s, and ask for the supplies to build it. You can’t do that. You need to start with an architect. That architect needs to spend a lot of time with you to understand how you want the house to look, room sizes, heights of the ceilings, the trim—everything.”
Dean continued, “Our discovery meeting—that prioritization exercise—is like the very first meeting with the architect. When we come back into our delivery meeting, it’s like the architect laying everything out and saying, ‘This is what I heard you saying that you wanted. Did I get everything right?’ We do the same thing.”
It’s at that point within the Guided Retirement System where the pre-retiree usually thinks of a few other things that are important to them. And that’s OK! We’re happy to find a way to rework the plan. Or, maybe there was something that the CFP® Professional misinterpreted.
The initial blueprint is almost never perfect, and neither is the first draft of the financial plan. That’s why it’s critical for your financial plan to be fluid as you’re approaching and going through retirement. Think about it. Even once your dream home is built, there are house projects that you’ll likely want to do over the years. The same applies with goals that you want to achieve in retirement.
Putting All the Pieces in Place
Once the financial plan is ready to be built, though, the FINANCIAL PLANNER™ Professional isn’t building it alone.
“When it’s time to build the financial plan, our CERTIFIED FINANCIAL PLANNER™ professionals, CPAs, estate planning attorneys, and insurance experts are making sure that there are no gaps,” Logan said. “We talk about things like property and casualty coverage because that’s still a potential gap. When we talk to you about your financial plan or your investments, we don’t just focus on your investments or the plan. There’s a lot more that goes into it.”
It’s the behind-the-scenes work between the discovery meeting and delivery meeting where a lot of the heavy lifting gets done by our team.
- The CERTIFIED FINANCIAL PLANNER™ Professional draws up the financial plan.
- Our CPAs review the plan from a tax perspective.
- The estate planning attorneys reviews the trust.
- Our insurance specialists review the plan from a risk management perspective.
“When we meet again for the delivery meeting, we share what we think after reviewing those different aspects of the plan,” Dean said. “While we’ll review all those areas, we might need to focus more on one specific area where there could be some problems. It may take nine to 12 months implement all the aspects of that financial plan. There are so many different moving parts.”
Again, Investments Aren’t the Only Focus
It’s still easy for a lot of people to think at this stage that their investments are one of the biggest moving parts, but it takes all the parts of the plan that we’ve mentioned to make the Guided Retirement System function. And it’s rare for people to necessarily need a major overhaul with their investments. In most cases, the missing pieces of someone’s Guided Retirement System has to do with the lack of an estate plan or the need to consider doing Roth conversions.
“At that point, we have their baseline of their financial plan. But a financial plan needs to be living and breathing,” Logan said. “The market changes and your goals and dreams change. Everything we do is flexible.”
Step Three of the Guided Retirement System: The Implementation Meeting
Once prospective clients go through the discovery and delivery meetings, they will hopefully begin to see the clarity that can come with the Guided Retirement System. So, if those prospective clients like what they see, our team is hopeful at that point that they’ll become clients.
If they do decide to become clients, the advisory team that they have been working with will take them through our client portal. There, they can track the progress of their plan, link outside assets and liabilities, and store important documents in a secure location.
As Logan said, each client’s financial plan is a living and breathing plan. Therefore, the Guided Retirement System has review meetings for each client to ensure that their plan is staying on track. The first review meeting is a 45-day progress review.
“The point of the 45-day progress review is to go back to Day 1 and show them where we started, what we discussed in the prioritization exercise, and everything we went over in the delivery meeting,” Dean said. “We then talk about the implementation phase again—what we’ve done so far, how to get into the technology we use, how to review account statements, where to upload documents to. It’s just to provide that additional piece of clarity to make sure everything got implemented the way we intended.”
Then comes the normal review process, which consists of biannual investment reviews, annual tax planning reviews, biennial estate planning reviews, and biennial insurance reviews.
The Annual Tax Planning Meeting
During the annual tax planning meeting, we want to make sure the CFP® Professional, CPA, and the client are getting together at least once a year. You don’t want to wait until December to start your tax planning. We want to start doing that mid-year to determine if there are necessary tax planning moves to be make before year’s end. The findings may be minimal, but it’s well worthwhile for an annual meeting.
“One important note about the tax planning meeting is that it’s not all about what can be done for that year,” Dean said. “If someone lives in the U.S. and has money or makes money, taxes are a fact of their life. Those tax planning meetings are looking forward five, 10, 15 years to determine how to pay as little taxes as possible over someone’s lifetime. It’s not just looking at one year.”
Insurance and Estate Planning Biennial Reviews
While the tax planning meeting is once a year, the insurance and estate planning reviews occur biennially. We’ll review your life insurance, property and casualty insurance, and long-term care. The next year, we’ll review your estate plan. Estate plans have been impacted recently with some changes made by the SECURE Act, so that’s something to pay close attention to. It’s not something where you last looked at your estate plan four or five years ago and then don’t look at it again for 10 years.
“You can’t do that because there are so many changes that are constantly with people’s personal situations. Maybe whoever you had as a successor trustee is no longer capable of doing that,” Dean said. “Or maybe your kid was going to be a successor trustee but then got married to someone you don’t trust. I mean, anything can happen.”
There are several aspects of estate planning that are easy to overlook, but they can make a huge difference in your financial life. Logan had a great example from a client he met with a few years ago that he’ll never forget.
“I was doing their insurance review for the first time and he had a life insurance policy. I asked him who the beneficiary of the policy was,” Logan said. “It was his dad, who had been dead for 15 years. It’s just little things like checking beneficiaries that are important.”
One of Dean’s Favorite Things About the Guided Retirement System
There’s an analogy that Dean likes to use when talking about the Guided Retirement System. He grew up in Western Kansas in the 1970s and 1980s, and if he were to give someone for directions, he’d have to be very detailed. If he were to give directions to the same place today, he’d have a GPS for reassurance so they wouldn’t make a wrong turn. It’s the same way with the Guided Retirement System.
“Our Guided Retirement System becomes that living, breathing GPS for your retirement,” Dean said. “Maybe one of our clients is having dinner and they start talking about their plan and have a question. When they send us a message, we pull up their plan and show them what happens if we make some adjustments.”
And One of Logan’s Favorite Things About the Guided Retirement System
Dean has always been a firm believer in the three C’s when it comes to the Guided Retirement System: clarity, confidence, and control. Logan has some similar sentiments.
“When you understand how your money needs to be invested, it gives you confidence in your plan,” Logan said. “There’s no doubt things have been volatile to start the year, but people have things planned. They have their family trips, the gifting they want to do, their kids’ college funds—whatever it may be. But ultimately, they can still look at their plan and see that their plan had like a 98% probability of success to accomplish everything they wanted to do. That’s an over-funded score. So, if the markets or their accounts drop, they’re still around a 98% probability of success. Live the life you want to do and don’t worry if your account dropped by $20,000, $50,000.”
Remember, drops like that in markets are generally temporary. The Guided Retirement System helps people weather the storm during those drops. If you don’t have the clarity that the Guided Retirement System can give you, that’s when emotions can take over. That’s when financial mistakes can often ensue.
Understand the Necessary Risks to Achieve Your Goals
The Guided Retirement System also lets you know how to be making changes within your assets. A lot of people have made a lot of money over the last 10 years. Since the assets have grown that much, maybe the level of risk you were taking five, six years ago. Your investment plan and financial plan should be in sync.
“It’s gratifying when I get to see people doing the things they aspire to do,” Dean said. “Probably about 10 years into my career, I remember working with this couple that had the dream to sail the Great Loop. You start in Florida, go up the east coast, through the Great Lakes, down the Mississippi River to the Gulf of Mexico, and back to Florida. It can take anywhere from six months to a year. They wanted this to be their first trip in retirement. So, we budgeted for the boat, stopping at the different places, etc.”
However, disaster suddenly struck a month before they scheduled to go on the trip. Dean was saddened to be informed that the wife died of a heart attack. That brings him back to the earlier point of making sure not to wait to make those special retirement memories.
“The reality is that this couple could’ve retired three to four years earlier,” Dean said. “But he really wanted to wait to hit a certain anniversary with the company he worked with. After that happened, he was like, ‘I should have listened. We should have gone on the trip then.’ There’s no guarantee that any of us will be here tomorrow. So, use the Guided Retirement System and prioritize what’s important in your life to get that financial clarity. It’s a big deal.”
What Questions to You Have About the Guided Retirement System?
So, whether you’re about to embark on a summer road trip or simply need a GPS to get you somewhere across town, think about how it compares to what Dean and Logan have discussed with the Guided Retirement System. We’re committed to putting you on the right route to living your one best financial life via the Guided Retirement System.
If you have any questions about how the Guided Retirement System can benefit you, please don’t hesitate to schedule a complimentary consultation or 20-minute ask anything session with one of our CERTIFIED FINANCIAL PLANNER™ professionals. We can meet with you in-person, virtually, or over the phone—whatever works best for you.
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Investment advisory services offered through Modern Wealth Management, LLC, an SEC Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Adviser. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.