** This post is part of Avaii Insights: A Look at Financial Planning Topics - The Avaii Way —our ongoing blog series featuring insights from the financial planners at Avaii Wealth Management in Appleton.
Each edition offers practical guidance on topics that matter most to your financial life, all rooted in The Avaii Way: Planning Made Easy.**
Remember the 2010 movie Inception and the concept that someone can visit the subconscious of others via layers of dreams? The problem they run into is that, as they dive further and further into the reality of others, they eventually start to lose track of their own reality. Sometimes planning for retirement can feel the same way. It’s easy to think we’re doing all the right things and following the advice of others, only to find out that we’ve unexpectedly lost touch with reality because we’ve ignored some things along the way.
Here’s an example of how easy it is to find yourself stuck in your own dream world.
Scenario 1: You enrolled in your employer’s 401(k) plan and set your contribution rate to receive the full employer match percentage (awesome—that’s exactly what we would have recommended!), so now you can let it ride for the next 30 years, right? Well... maybe. If efforts aren’t made to increase your contribution rate throughout various stages in life, you could be doing your future self a disservice.
Can you remember the last time you—or someone else—reviewed your contribution percentage to evaluate if you were on track for a successful retirement?
Scenario 1.2: Now that you’re enrolled in the 401(k), you picked an investment option that aligns with your expected retirement age (typically referred to as a Target Date Fund). Awesome again—you’re two for two! The fund that you picked pretty much does everything for you, so now you can kick back and watch your account grow, right? Well... maybe. If you’re not periodically reviewing your portfolio to see when your fund is automatically rebalancing your ratio of stocks to bonds, you could be leaving yourself in a situation where your investment choice doesn’t exactly align with your personal goals and risk tolerance.
Have you—or someone else—taken the time to research your funds to find out if you’re potentially losing out on earning potential or potentially taking too much risk?
Let’s face it, taking a closer look at your financial situation can be daunting because there’s a real possibility of coming to the realization that you’ve been doing something “wrong” or that it’s “too late” to do anything about it. But just like in the film, the deeper you go without facing the truth, the harder it becomes to find your way back to reality. Avoiding retirement planning discussions might feel safer in the moment—but eventually, you need to return to solid ground. That means regularly reviewing your contributions, assessing your goals, and making sure your investments are aligned with the life you want to build.
Our financial planners in Appleton are here to help you navigate through these types of situations and give you an honest assessment of where you’re at and where you’re heading. If you’re interested in having a conversation about how we can help, contact us today!
Hey there! Thanks for stopping by our blog. A quick heads-up: the information here is more like friendly tips than personalized financial advice. Investing can be a bit of a wild ride, and what worked before might not be the golden ticket for the future. So, before making any major money moves, it's always a good idea to have a friendly chat with a financial professional. We're all about providing insights, not making promises. Your unique financial journey is key, and we're delighted to have you on board for the journey.