How much would you be willing to pay for a checkmark? Would you pay $300,000 for it? What about $275,000? How about $250,000? You don’t think a Checkmark is worth $250,000? You don’t think anyone would pay $250,000 for a checkmark?

What if I told you a Checkmark could be worth half a million dollars or more? Would that change your mind? You don’t believe there is any way possible a Checkmark could be worth that much money?

Let me tell you a story about a couple. We will call them Bob and Mary. Bob held a government job that had a pension. Like most people, as they get closer to their pension, the little things seem to bother them more and more. With the minimum requirements met to receive his pension in sight, Bob filed paperwork to retire as soon as he reached the minimum retirement requirements, which were three months from completing the paperwork. Bob’s pension will be $50,000 per year.

Bob, needing the maximum amount of pension dollars he was eligible for to retire at the young age of 56, selected a single-life option. That means that once Bob passes, the pension will stop paying, and if Mary is still alive (Which is very likely since she is four years younger, and women live longer than men), Mary will receive no additional payout, even though it is realistic, Mary will probably live 10+ years beyond Bob.

Having never worked with a financial advisor, Bob saw no reason to consult with one now since the pension option was so straightforward. Bob never saw the value in working with a financial advisor. He believed there was no reason to work with an advisor. He had his pension, he invested in EE savings bonds, and he had already decided two decades earlier not to contribute to Social Security when it became available to him because he could not afford the approximately 6% deducted from his pay.

Fast forward 18 years into the future (Bob is 74, and Mary is 70), and Bob realizes his mistakes. His first mistake was putting all his investment money into EE savings bonds. It is not that EE savings bonds are bad; it is just that they do not keep pace with inflation. So even though he saved an additional $100 per month in these bonds, inflation was eating away at the purchasing power of every dollar he saved. When he needed the money, the dollars saved would be able to purchase way less of the goods and services he could when he bought the bonds.

His second mistake was not contributing to Social Security. Not only would he receive the same percentage from his employer as he was saving, but it would also have provided additional lifetime income when he reached retirement age (somewhere between 62-70).

Finally, his last and biggest mistake was selecting a single life option on his pension. Since the only investment he had besides his pension, was the EE savings bonds. His money could never grow enough to have the same lifestyle in retirement while he was working.

Had he consulted with a financial advisor, his retirement years probably would have looked much different, had less stress, and his wife would still not have to work at 70 years old.

A financial advisor would have explained the downfall of putting all your money in EE savings because of the loss of purchasing power due to inflation. He would have been able to show how much less those dollars would be worth in the future after deducting for inflation. That growth is just as important as security, and a more balanced portfolio would be necessary to have the same purchasing power in the future as those dollars have today.

A financial advisor would have stressed the importance of Social Security and how having it would provide another guaranteed lifetime income stream that he could never outlive.

Finally, even after the two critical mistakes I just discussed, an advisor could have significantly impacted Bob’s retirement and, more than likely, relieved a lot of the stress he is feeling now.

An advisor could have pointed out that if Bob worked a few more years, his pension payout would have increased enough to have the same payout or more than he is getting now, but on both his and Mary’s life instead of just his.

So, if Bob could go back in time and have an opportunity to change his checkmark from one life to two, would he? Would he be willing to pay $250,000 right now for a new Checkmark that could be worth over $500,000 to his wife, Mary? of course, he would!!!!

Bob only made three financial decisions in his life, and as it turned out, all three were wrong. Working with a financial advisor doesn’t cost you money; it saves you money.

If fact, Vanguard did a study called quantifying an advisors alpha (chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.ch.vanguard/content/dam/intl/europe/documents/en/putting-a-value-on-your-value-quantifying-vanguard-adviser-alpha-eu-en-pro.pdf) and they determine an advisor has the potential to add up to 3% to the value of your portfolio over time.

If you would like help creating and implementing a financial plan of your own, click here to schedule a one-on-one 30-minute introductory meeting.

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.

Similar Posts