FAST FACTS
- Knowing when and if you have enough money to last until you die is a vital question to your happiness and financial freedom.
- Your budget, portfolio projections, wants, needs and wishes are all factors in deciding how much money is enough.
- Simulating scenarios on your money can give you a good idea on the survivability of your money.
Today’s video is going to be answering the question, “how much money is enough money? How can I know when and if I have enough money and won’t run out?”
Sometimes it can be hard to tell whether you’re going to really, really run out of money. How do you know that? How do you start to have a good sense, a good understanding of that, and not just a rational but an emotional acceptance of that?
Today we’ve met with a client; this is a financial planning client. We’ve built them a portfolio and understand them well. They’re very nice people, we’ve had a lot of interactions, and we know what makes them comfortable and what their needs are.
Factors That Impact Your Money’s Survivability
We hadn’t definitively researched, double checked that no matter what, they weren’t going to run out of money, so to speak. That requires some hard work. That requires us getting budget numbers. That requires us getting projections on past portfolio performance, current portfolio performance.
That also requires us to, if we want to do awry, to throw in some accident, so like we’re able to mimic what happens if there’s a bear market, we’re able to mimic what happens if the portfolio doesn’t work right for some of the years at the beginning of retirement.
Simulating Scenarios Against Your Money
Once we know what we want to do, and we’ve got really good budget numbers, then what we can do is ‑‑ this is really pretty amazing ‑‑ we can run 1,000 potential simulations. Not 10, not 100, not 500, 1,000 simulations to see whether or not the client will run out of money.
We look back over a long period of time. What we’re doing is we’re saying, “What happens if this happens, this happens, this happens?” You get to know a probability, a percentage probability of success, of achieving your goals, your wants, your needs, and your wishes.
We were able to give that client a good feeling that things were going to work out. Not just a feeling, we were able to show the numbers. Not only that, but we acted as if they were going to live longer than they probably would. We acted as if things were going to go even more wrong than normal. We were able to show that good couple that they were going to be okay.
That peace of mind is especially important.
How Much Money is Enough? It’s Complicated.
If you want to know if you’re going to run out of money, then we can certainly talk to you about that. As you can tell, a lot of factors go into answering this question. Everyone’s answer is going to be different dependent on their budget, wants, needs and wishes.
We at Fouts Law Group focus on asset protection for you and for your family. We specialize in that. We are not general practitioners. We want to share our knowledge with you. We want you to have a plan that actually functions and doesn’t just look pretty.
Give us a call if you’d like to schedule a free consultation. When you come in, I’ll also give you a copy of my book. It is a real book available on Amazon, but you won’t have to pay for it. It’s called “Estate Planning in Georgia,” how to leave your assets in a smart way and protect it.
