Weekend Reading: I Have Concepts Of A Plan Edition

During my recent interview with Dave Chilton on The Wealthy Barber podcast, we got into a question I hear often: when's the right time to start working with a financial planner on retirement? Our answer wasn't 65, it was roughly 10 years before you plan to retire.

Of course, you can also be too far out for retirement planning to be meaningful. A 22-year-old who says he'll never retire, or that he wants to tap-out at 36, is working with so many unknowns that any plan is really just a guess. Life rarely moves in a straight line from where you're standing today.

Here's why I think the 10-year runway matters. It's long enough to make meaningful changes, like increasing your savings rate, ditching high-fee mutual funds for low-cost ETFs, or paying down the mortgage. But more importantly, it gives you time to figure out what you're actually retiring to, not just what you're retiring from.

Because retirement planning isn't just about the numbers. It's about mapping out the big one-time expenses you know are coming: replacing vehicles, home renovations, bucket list travel, helping kids through post-secondary. It's about deciding where you'll live, how you'll spend your time, and who you'll spend it with.

Without that clarity, what you really have are concepts of a plan. And honestly? At 46, that's exactly where my wife and I are, even though I'm a financial planner.

Our lives look pretty different than they did a decade ago. We run our own financial planning business now, which gives us more control over our time and income than we ever expected. That's a good thing, but it also means our goals have shifted. We're dreaming bigger.

One of our kids wants to attend university in the UK. My wife and I have been talking about eventually retiring in Scotland, and I recently got my British citizenship, so possibly buying a home there too.

These aren't wild fantasies, but they're not fully formed plans either. Can we afford a property in Scotland while maintaining our primary residence in Canada? Maybe. But are we actually going to do it, or is it just an exciting idea we're turning over?

That distinction is enormously important in financial planning. When I model a scenario in my planning software, I need a date and a dollar amount. “We might buy a place in Scotland someday” doesn't give me much to work with.

This is what I mean by concepts of a plan. The ingredients are there, but the recipe isn't written yet.

My philosophy has always been that good financial planning is about giving your future self options. We save and invest today so we have the ability to act on our goals when the time comes, even if those goals aren't fully defined yet. But at some point, concepts need to harden into decisions.

For us, that point is probably about five years away, when our youngest heads into post-secondary. I'll be 52, right in the window I recommend for most people to get serious about retirement planning. By then, the big unknowns will have come into sharper focus and we can start stress-testing an actual plan rather than a collection of ideas.

We'll still have time to adjust course if needed. But we'll know which direction we're rowing.

This Week's Recap:

Last Weekend Reading was all about the worried wealthy, a topic we also discussed on The Wealthy Barber podcast.

After the podcast was released we have been absolutely slammed with new planning inquiries (and new subscribers, thank you!). That prompted me to write a detailed guide to how our advice-only planning practice works.

We're still working through that backlog, so please be patient with us if we take some extra time to get back to you.

Yesterday also marked my third Afib episode in the past 13 months. I'm fine, but now have concepts of a plan to get an ablation done sooner than later.

Weekend Reading:

Here's Of Dollars and Data blogger Nick Maggiulli on why being useful is more attractive than being rich.

PWL Capital's Ben Felix says advertising is the biggest problem in investing right now, and the financial products that get advertised the most aggressively tend to be the most profitable for the firm selling them:

Why private credit ‘gating' is a wake-up call for advisors (and investors):

“The problem is, they’re pitching to retail investors who are accustomed to public market pricing, which is “what you see is what you get, whereas in a private market, what you see is … what they say you get.”

How often should you check your investment portfolio? The behavioural literature is clear – almost never.

They planned to retire early, but now rising costs are putting those plans to the test.

A Wealth of Common Sense blogger Ben Carlson writes about money without meaning, or why rich people still have anxiety.

Finally, Greg Pallone writes about confronting mortality in a way that will resonate with anyone thinking seriously about retirement. A reminder that the financial planning question isn't just ‘do I have enough?' but ‘do I have enough time?'

Have a great weekend, everyone!