It has taken you an enormous amount of time, commitment, and delayed gratification to get to where you are today. While college friends were building their careers for a decade, you were completing your internships and residency training.
To ensure that you and your family get the maximum benefit for all of your hard work, you need a very strategic, tailored, and goal-oriented financial plan. One that takes into account any remaining student loans and puts you on a path toward financial security.
Bridgeworth’s financial planning process is called One-Size-Fits-None™ because we believe strongly that your financial plan should fit you and no one else. It begins with a blank sheet of paper and a conversation about your specific goals, and that conversation between you and your Bridgeworth advisor will continue far into the future.
Giving all of your attention and energy to others is work that does not keep regular hours, and we know that free time is difficult for you to find. Understanding your limited availability, your advisor will work with your schedule.
Carve out an hour to speak with a Bridgeworth advisor and we’ll help you create a custom-tailored, One-Size-Fits-None™ plan just for you. The clarity we provide comes with no judgment and zero pressure. It is too easy to let years go by without getting a solid financial plan in place for your financial future.
Decide to Own Your Financial Future
Everyone has a financial plan, whether it has been carefully and thoughtfully planned out, or it is just happening by accident. Deciding to own and be intentional about your financial future is the first step to having greater peace of mind. Once you make that decision, we can help you get on the path toward making your goals a reality.
You are the only “you” there is. Your financial plan has to be as unique as your fingerprint.
Start an Ongoing Conversation
Even the most high-achieving among us needs a good sounding board. Having someone to really listen to you and ask the right questions can help bring your financial goals into sharper focus.
We realize that revealing your entire financial life to another person is not something you do every day, so it is reassuring to know that the guidance and clarity your Bridgeworth advisor provides comes with zero judgment and zero pressure. And, you can be confident in the fact that your advisor is bound ethically to act solely in your best interest.
As the conversation continues, you will make all of your financial decisions. Our role as your financial advisor is to keep you focused and informed on the choices available to you so that you understand how every financial choice you make impacts your goals.
Financial Personal Trainers
To put it plainly, our role is to listen to you to understand what you want your future to look like, and then, coach you all the way there. In fact, that is the best way to think about our role. We are personal trainers who encourage and coach you into a better financial future.
This case study reflects the combined experience working with hundreds of clients over the past 20+ years. It does not represent any one Bridgeworth client, but serves as an example of the benefit of planning. As Dwight D. Eisenhower said, “plans are useless, but planning is indispensable.”
Al, age 38, is a pediatric neurologist who sees patients and teaches classes at the medical school. His wife, Linda, age 36, stays home with their children, Will, age 6, and Lilly, age 3, and is an active volunteer in the community. She previously worked in human resources. Because Al works long hours and they have young children, family finances have been on the back burner. We agreed to have monthly meetings for the first 6 months we worked together to “eat the elephant one bite at a time” as we work together to build a financial plan that reflects Al and Linda’s goals and priorities.
Paying for college for Will and Lilly is an important goal for Al and Linda. However, they want to balance education savings with their need to save for retirement. The saying, “You can borrow money for college, but you can’t borrow money for retirement” resonates with both of them. Al has been contributing 5% of his salary to his retirement plan. We recommended Al maximize his retirement savings through his employer as current cash flow does not allow them to save aggressively for both retirement and education. Given their willingness to take risk and the long-time frame until retirement, Al and Linda agreed with the recommendation to invest the retirement accounts in an all equity (stock) portfolio.
Al’s parents paid for his undergraduate education, but he took out student loans to pay for medical school. Linda paid for college through a combination of savings from her parents, work and scholarships. Al and Linda were committed to paying off Al’s medical school debt and finished paying the last loan about 6 months ago. Their goal is to pay for 4 years private undergraduate for each of their children. Al and Linda recognize their children may need to get scholarships or take loans if they want to go to more expensive schools and/or to graduate school. We reviewed the anticipated cost of college for each of them and recommended that Al and Linda open 529 College Savings Plans for each child. Al and Linda will receive a current state tax deduction for contributions made up to $10,000/ year and the 529 accounts will grow tax-free as long as distributions are used for qualified education expenses. They have not saved anything for college so far given their focus on paying off Al’s student loan debt and their desire to make life more comfortable by taking more frequent family vacations and replacing some of their “early marriage” furniture.
Our projections show they need to save $1,000/ month each for Will and for Lily to pay for 4 years of private college, but Al and Linda don’t have the cash flow to save that much. They agreed to set aside $250/month each for Will and for Lily and to ask grandparents to make contributions to the 529 plans for birthdays and Christmas gifts to help supplement college savings. Al and Linda also agreed to increase education savings each time Al gets a pay increase. Linda said she is willing to go back to work as the children get older so that her income can be used to increase college savings if needed.
Because Al is the only income provider, Al and Linda want to have a safety net in place in the event Al were to become disabled or die prematurely. One of Al’s college roommates was diagnosed with cancer in his early 30s and was unable to work for 2 years. Al and Linda saw firsthand the impact of that lost income on their friend and his family. Al has group disability insurance policy with his employer. We recommended that he buy an “own occupation” individual disability policy through an independent agent as well. He has the maximum amount of disability insurance for which he qualifies, but recognizes the insurance will not replace all of his income. Al and Linda agreed that, if Al were disabled, Linda would consider returning to work and they would be willing to downsize their house. Because Linda does not have earned income, she cannot buy disability insurance.
We also prepared financial projections to take into account the impact if Al died prematurely. Linda feels strongly she would not want to return to work under this scenario; she would want to be home with the children to provide stability. These projections showed that Al needed to increase his life insurance coverage. Linda did not have any life insurance coverage and Al was concerned by how expenses would increase if she died before him. He would need to hire additional household and childcare help so he could continue to work full-time. We ran projections taking into account these expenses and recommended that both Al and Linda buy 20-year level term policies through an independent agent.
Because of Al’s profession and the community in which they live, we recommended that Al and Linda purchase an umbrella insurance policy to provide an extra layer of liability protection on top of their home and cars. We do not want the good work they are doing to save for college and for retirement to be wiped out by a lawsuit related to an accident. Additionally, we reviewed Al’s malpractice insurance to make sure he was covered for any professional liability claims.
Finally, we reviewed the basics of wills, powers of attorney, and advance healthcare directives with Al and Linda. They quickly agreed each would serve as primary executor for the other under the will and primary attorney in face under the power of attorney and advance healthcare directive. Before meeting with their estate attorney, they spent time thinking about who should serve as secondary executors and attorneys and who should be named as guardians of Will and Lilly. These decisions are not easy, but we reminded Al and Linda that they are making better decisions than the state would make if wills were not in place. These decisions can also be changed later as their family and financial circumstances evolve. At the end of the estate planning process, the estate attorney recommended beneficiary designations for their life insurance policies and retirement accounts and we helped Al and Linda update that paperwork. Life insurance policies and retirement accounts, like IRAs, 401ks, and 403bs, pass outside the will so it is critical that those beneficiary designations coordinate with the estate plan.
We will review the financial planning projections annually to make sure Al and Linda remain on track to accomplish their goals. We will also continue to review how their investments are performing and whether their ability or willingness to take risk has changed.
Bridgeworth can be a resource to provide objective information and analysis to give you peace of mind about your financial condition.