A few weeks ago, I traveled to Seattle to for two days of advanced training on the portfolio management software we use at our firm. While I spent most of the time stuffing my head with technical insights, a bonus was having the opportunity to browse some of my favorite news sources while decompressing between sessions. As serendipity would have it, a couple of meaty articles in The Atlantic caught my eye, offering varying viewpoints on how to manage the gaps between living long versus living well.
Gregg Easterbrook wrote "What Happens When We All Live to 100?" Beware, it's on the long side, but even if you don't have time to read it all, it's worth a peek at the assumption-challenging photos. (If the piece inspires you to want more, I've also read and enjoyed Easterbrook's "Sonic Boom.") With my mind already on the subject, I turned to Ezekiel Emanuel's, "Why I Hope to Die at 75." The photos weren't as fun, but he was certainly as assumption-challenging, whether you agree with him or not.
Far be it from me to tell other people what their priorities should be as they make their highly personal quality-of-life decisions. But as a financial advisor assisting families in an age of increasing life expectancies, I find it interesting to think about the related financial issues. Where I think a professional advisor can add value is in helping you make the most of your life through informed financial choices as you earn, save, invest and spend your wealth, no matter where your values may fall between living long and living well.
With any luck, you and your loved ones will have the opportunity to do both. But what if difficult choices must be made, or revisited over time?
For example, I have often heard clients say something like, "I want to make sure I spend the last cent I own on the day I die!" Typically, they are kidding ... sort of. As an advisor, I have to consider whether there may be an element of truth in these sorts of statements that might translate into a dangerously weak financial safety net should that day be further away than they think.
In other words, individuals who are planning to "go for broke," literally, may find themselves spending too extravagantly or investing too conservatively for their best interests. On the flip side, there are those who may be overly cautious with their wealth, denying themselves modest comforts that might bring them great joy, for unwarranted fear that there is not enough to last.
As is often the case, the best course usually lies somewhere between the extremes. My goal as an advisor is to help families plan for sufficient but not excessive financial resources for their lifestyle and life expectancies (which usually translates to the wife's life expectancy, since women tend to outlive us guys).
This circles me back to that training I attended in Seattle. In my opinion, good financial planning is a highly human endeavor, calling for personal relationships and discussions between you and your advisor. At the same time, technology can offer improved ways to crunch your financial numbers, think about what they really mean to you and the rest of your life, and manage the resulting investments efficiently and effectively. This helps us move ever closer to delivering one of the biggest benefits that informed financial planning has to offer: an increased confidence in your ability to afford your desired future, no matter what that future may be.