Last week I wrote a post about this topic in relation to investment returns in your portfolios. This of course is the most common place you will see the phrase “Past Performance does not Guarantee Future Results.”
What if this phrase applied to more than just investment returns?
Think about it…What if this phrase was applied to your financial plan? Does your current financial situation look exactly the same as it did 5 years ago? You may be now closing in on retirement. Five years ago your “financial plan” consisted of saving as much as you could in your 401k as your career winded down and the urgency of saving for retirement kicked in. Now you’ve done the savings part, but what’s next?
- How do I know which accounts to withdraw from in retirement?
- Are there any tax surprises that I need to know about?
- What do I do with my old 401k?
- When should I start taking Social Security?
- How do I pay for that 2nd home I’ve dreamed about getting in retirement?
The point is, you likely have moved on to new decisions and plans in regards to your finances and in need of updating the ones you made in the past.
Another scenario that you may be facing is feeling overwhelmed and anxious about your finances and how to handle them. You’ve spent years making good income and savings, but you still feel as if you don’t know where you stand and if you are on track to meet any financial goals or obligations you have coming up. This “past performance” or behavior doesn’t have to impact your “future performance” or behavior.
Organizing your finances with a financial plan can give you the clarity of what’s to come. A financial plan can provide you the peace of mind that you have a plan in place to get you to where you want to be. The plan helps you take advantage of opportunities that you may have missed in your “past performance”, but will help you produce positive “future performance.”
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