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Investors Should Pay More Attention to Their Spending

By Rita Raagas De Ramos November 2, 2018

This is part five of a six-part series probing the concerns of American investors, as expressed to top financial advisors.

Terri Munro, Atlanta-based wealth advisor at BT Wealth Management, says retirement, Social Security and capital markets preoccupy her clients when they think about financial security.

Retirement is typically foremost in the minds of her clients as they age, their children get older and they think about what they want their next phase to look like, Munro says. And Social Security is considered an essential part of the cash flow of seniors, while capital markets can be intimidating to many investors.

But Munro believes investors should reflect more on their spending.

“Few clients have an accurate vision of what they spend to run their lives. Most underestimate, and unless that assumption is challenged and verified, 'back of the napkin' retirement projections can paint too rosy a picture,” she says.

Munro also believes investors should deal with the prospect of their death and what they want done with regard to their finances upon their death.

“Most clients do not want to think about death and dying, and as a result, estate planning can be little to none. Not only is it an operational nightmare for your survivors, but there are often opportunities to save substantially on taxes or to provide a charitable legacy,” she says. “These conversations do not have to be sad. Once we overcome the natural hesitation, clients have great peace knowing that they are planning to take care of loved ones after death.”

Terri Munro

Here are the top three financial security-related questions Munro is asked by her clients, and how she answers them:

#1 Can I retire?

“The answer is always, "It depends." We explore what their financial realities would look like in different scenarios. There are a multitude of different factors that affect the answer: spending and savings amounts; properties to maintain, acquire, or sell; and other mid-term goals, such as supporting children and grandchildren through college or weddings. I always say that you can retire, but we need to determine the quality of that retirement lifestyle to see if you are saving and investing enough now. Time has an uncanny way of magnifying the effects of our behavior today.

Retirement projections are a way to tap into the expertise of a planner to see any stumbling blocks that you may not anticipate before they become larger problems. With regular planning updates, an experienced advisor can get you on the right path to achieve your financial life goals.”

#2 Is Social Security viable for me?

“Probably so. Although for my younger clients, I will model retirement without that safety net, the majority of clients approaching retirement should get some type of benefit from Social Security. Politically, this is a symbolic benefit that would be hard to walk back. I also use conservative estimates for the cost of living adjustment amount to be cautious.”

#3 Are the markets too high or about to crash?

“No one knows for sure. That’s why we have a diversified portfolio that will help weather volatility that comes in the market.”

Munro has been an advisor since 2003. BT Wealth Management, a completely fee-based RIA, says it has around $790 million in client assets and more than $100,000 in non-discretionary consulting assets.

Read Ric Edelman’s interview here, Ken Fisher’s here, Nick Strain’s here and Michael Weissman’s here.