I spent an hour on Arkansas Week, the public affairs program on Arkansas PBS, as part of a panel discussion on financial security. The conversation moved through the whole arc of a financial life: saving and budgeting early on, investing, planning for retirement, protecting yourself from fraud and identity theft, and passing financial literacy along to the next generation.
A good portion of that hour spoke to people early in their careers, which is where a lot of financial education belongs. The part I keep returning to came later, when the discussion turned to the years right before retirement. That’s where most of my conversations happen, and it’s where the stakes are highest, because there is less time left to correct a miss.
The plan comes before the portfolio
Here is how I explained it on the program:
“The financial plan is basically your road map to your financial future. And the financial plan will help dictate what the investments look like in the portfolio.”
That order matters more than it might sound. Plenty of people come to me with a portfolio and no plan behind it. They own a collection of investments that somebody recommended at some point, for reasons nobody remembers, and the collection has been drifting ever since.
When you build the plan first, the portfolio has a clear purpose. Your asset allocation can be designed around your risk tolerance, time horizon, and overall financial circumstances, while the broader investment strategy takes into account when you may need to draw from the portfolio and the role those assets play in your financial plan. The result is a portfolio built to support your goals rather than simply a collection of investments.
Planning also has a way of feeling larger than it is. Tax strategy, investments, insurance, estate documents, Social Security timing… there is enough there to make anyone put it off. On the program I reduced it to three questions:
What are my goals?
What is my time frame?
What are we investing for?
Answer those three honestly and most of the technical decisions start narrowing themselves down.
What changes in the last decade before retirement
When the host of the show asked what people nearing retirement should be doing, my answer was the same one I give from across my desk:
Refresh the plan, and run updated projections.
Why? Most plans were built for a different version of your life. A projection you ran at 52 assumed a salary, a savings rate, a retirement date, and a spending estimate that may all have moved since. Retirement math is sensitive to those inputs in a way that can be easy to underestimate. Running the numbers again with what is true today tells you whether you are on pace or whether something needs adjusting. And at 10 years out, there is still room to adjust comfortably.
And get your arms around every account
The second half of my answer was about the accounts themselves. Most of the households I work with hold money in more places than they can name from memory: a current 401(k), a rollover IRA, an old plan still sitting at an employer they left in 2011, a small brokerage account at a firm they stopped paying attention to years ago.
Each of those accounts might look fine on its own, but are they working together? Are the tax-inefficient holdings in the account type that makes sense for them? Is there a withdrawal order that reduces taxes across retirement rather than only in the current year? Are the beneficiary designations still current after whatever has changed in the family since you filled out that form? Nobody answers those questions account by account. They get answered by looking at the whole thing at once, which is difficult to do when parts of it are scattered across firms.
If it has been a while
If you are within 10 years of retiring and nobody has re-run your numbers recently, I am glad to take a look. We are a fee-only fiduciary firm, which means we do not earn commissions and we do not sell products. My job is to look at your situation and tell you what I see. A complimentary conversation is a low-pressure way to find out whether anything here applies to you.
You can watch the full Arkansas Week panel discussion here.
Frequently Asked Questions
What should I do with my financial plan before retirement?
If you’re within 10 years of retirement, it’s a good time to refresh your financial plan and run updated retirement projections. Your income, savings rate, expected retirement date, spending needs, and other assumptions may have changed since you first created your plan. Updating those numbers can help you determine whether you’re still on track and whether adjustments are needed.
Should my financial plan come before my investment portfolio?
Yes. Your financial plan should help determine how your portfolio is structured, rather than choosing investments first and building a plan around them. A financial plan considers your goals, time frame, and what you’re investing for, which can then inform your asset allocation and investment choices. A fee-only fiduciary in Little Rock can help connect your investment strategy to the broader financial plan.
Should I consolidate my old 401(k) accounts before retirement?
Consolidating old 401(k) accounts may make it easier to manage your retirement assets as you approach retirement, particularly if you have accounts scattered across several former employers. However, consolidation isn't automatically the right choice. It's important to consider investment options, fees, tax implications, withdrawal strategies, and beneficiary designations before moving an account. Fiduciary Wealth Management can help you evaluate your existing accounts as part of a broader pre-retirement planning process.
Rocklin Senavinin, CFP®
Fiduciary Wealth Management — Little Rock, Arkansas
Fiduciary Wealth Management is an independent, fee-only fiduciary advisory firm. This article is for informational purposes only and does not constitute tax, legal, or investment advice. Please consult a qualified professional regarding your specific situation.
Participation in this program does not constitute an endorsement of Fiduciary Wealth Management or of Rocklin Senavinin by Arkansas PBS, by any regulatory body, or by any other program participant. Program content is the property of Arkansas PBS and is referenced here with permission.