We have spoken a lot about the importance of proper planning and how this can help to provide a roadmap to guide us. However, we have also spoken about the practicalities of life and how changes in circumstances can sometimes throw a wrench into the works and affect our plans. Well, one of the variables that we cannot control or know in advance is when our Earthly lives will end. With clients living longer and healthier lives, the fear of outliving their savings is a real cause for concern for many of our aging clients and can incite a lot of panic.
It is important to establish a proper strategy in the first place which should take into consideration what we call longevity risk. With our proprietary software, we can look at the impact of varying scenarios, including living longer than expected and examine any ramifications to the return requirements needed. This assessment will also take into account cash flow needs and other potential knock on impacts. When these findings are presented to our clients and they can see the numbers, there is some comfort derived. However, I should say that even then there can be some trepidation, which is to be expected. What we do not want is for clients to live their last years in fear that they will need to depend on others or that they will not be able to leave as large of a legacy behind as they wish. Fear can rob us of the joy intended for our lives. When we sense that fear is taking over, it is important to remember that there are always provisions for us, according to Matthew 6, and we need to meditate on that.
“Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they?” – Matthew 6:25-26
Janet Kim Sing, Portfolio Manager
Capstone Private Wealth