Retirement

National Financial Awareness Day

By Chris Duderstadt

August 11, 2023

National Financial Awareness Day

Key Points – National Financial Awareness Day

  • What Is National Financial Awareness Day … and When Is It?
  • Every Day Is a Financial Awareness Day at Modern Wealth
  • Being Financially Aware of What Is and Isn’t in Your Control and Planning Accordingly
  • The Importance of a Goals-Based Financial Plan
  • 6 Minutes to Read | 23 Minutes to Watch

Happy National Financial Awareness Day!

If you didn’t know that National Financial Awareness Day was a thing, you aren’t alone. National Financial Awareness Day occurs on August 14, and was established by the U.S. Financial Literacy and Education Commission in 2017. The purpose of this new holiday is to improve the financial literacy of Americans nationwide.

However, if August 14 is the only day of the year that you focus on improving your financial literacy, you won’t have very good financial awareness. It’s critical to create a forward-looking financial plan that you review and update overtime as things change. From a personal level, your goals, health, family, and living situation are just a few things that can change as you prepare for and go through retirement.

There are plenty of things that are out of your control as well, such as market volatility, inflation, interest rates, and tax rate hikes. But even though those things are out of your control, you can still plan for them. That’s a huge component of financial awareness.

“You probably have more control over your financial future than you believe. I don’t think people really segment all the various buckets that they might have money in. Are they maximizing the results? That part of that process is the elimination of unnecessary taxes.” – Bud Kasper

National Financial Awareness Day is every day for our team at Modern Wealth. We’re committed to being financially aware of all the things that can impact your probability of success in retirement and educating you about them so that you can make informed decisions. If you’re not already working with a team of financial professionals that can help you create a comprehensive financial plan, that’s a great way to officially celebrate National Financial Awareness Day. We’ll explain more about the importance of that shortly.

1. Defining Your Retirement Goals

A big part of financial awareness is figuring out how much money you need to retire. That’s going to be different for everyone because of those personal things we listed earlier. So, rather than getting a specific number in mind of how much you think you need to save for retirement, you first need to define what’s important to you. If you really think about it, money most likely isn’t the most important thing to you. Let’s revisit this quote from Modern Wealth Management Managing Director Ken Osiwala about defining true wealth.

“When you really look at life, wealth has nothing to do with how much money you have. The money is a tool, but it isn’t necessarily your wealth.” – Ken Osiwala

In other words, you first need to define your retirement goals to figure out how much money you need to save for retirement. Then, put a dollar figure to those goals so you can build a plan that helps give you more confidence that you’re doing the right things with your money, freedom from financial stress, and time to spend doing the things that you love.

So, if you don’t have a plan in place or have a “plan” that really isn’t a plan because it doesn’t factor in your retirement goals, we encourage you to celebrate National Financial Awareness Day by going over your retirement goals with your spouse. And along with outlining your retirement goals with your spouse, download a copy of our Retirement Plan Checklist and review it with them as well. This resource takes you to and through retirement in terms of things you and your spouse need to be considering at certain times. Download your copy below!

National Financial Awareness Day

Retirement Plan Checklist

2. Consolidating Your Accounts

Now that we’ve discussed how critical it is to define your retirement goals, how are you going to fund those goals? We’re actually going to cover that more in our next step, but there’s still more walking that we need to do before we can run. Before we dig into the details about what your assets need to do for you, let’s get organized first.

Are all your accounts up to date and accurate? And are they all in the same place? For example, if you just got a new job, have you rolled over your 401(k) yet from your former employer? We also like to talk about financial spring cleaning during tax season to make tax filing and forward-looking tax planning a lot easier. National Financial Awareness Day is also a perfect opportunity to consolidate your accounts and get organized—no matter what stage of the retirement planning process you’re at. Don’t procrastinate any longer with consolidating your accounts.

“There are consequences with procrastination. There’s an old saying that goes, ‘Procrastination is my sin. It brings me constant sorrow. I really shouldn’t practice it. I think I’ll start tomorrow.’ For whatever reason, people sometimes create a barrier that needs to be kicked down. You have a responsibility to yourself, your family, and your legacy to coordinate what you have from a financial perspective.” – Bud Kasper

3. Setting Up a Spending Plan for Retirement

Once you’ve done some National Financial Awareness Day cleaning, take some time to think about the assets you have and understand what they need to be doing for you so you can retire successfully. That is critical before you jump right into creating a spending plan that helps you to achieve your retirement goals.

You might also be wondering at this point, “What is a spending plan for retirement? That sounds an awful lot like a budget. I’ve been budgeting for most of my life and thought that I finally wouldn’t need to worry about that in retirement.” Well, yes, a spending plan for retirement is essentially a budget. But isn’t that a much more fun way to think about it?

Stress Testing Your Financial Plan

Having a spending plan for retirement is crucial if you want to go through retirement with clarity and confidence. Is there a big trip that you’ve wanted to go on for several years but haven’t yet because you’ve been working or are unsure if you can afford it? Even if you haven’t retired yet, put the cost of that trip into your plan and see how it impacts your plan’s probability of success. That’s what we refer to as stress testing.

We’ve already built your plan to account for things like long-term market downfalls, higher inflation, a long-term care stay, and many other things that could derail a retirement if it wasn’t planned for. We want to do the same things with your goals so you can live your one best financial life in retirement. Maybe some tradeoffs are necessary to achieve your goals, but that’s certainly more ideal than not factoring them in your plan at all.

Let’s say you go ahead and take that big trip without having a plan in place. You’re likely going to feel a bit uneasy about where you stand financially and have that hanging over your head before, during, and after the trip. That same uneasiness can consume people that choose to put off a trip like that. That’s why you need a plan that gives you clarity and confidence in retirement. Combat that uneasiness by beginning to build your plan (or reviewing it if you already have one) on National Financial Awareness Day.

4. Working with a Team of Professionals

If what we’ve already covered seems like a lot, it is. And we’ve just touched the tip of the financial planning iceberg. The time commitment for one person to be financially aware of everything that can impact their retirement takes more than one day. That’s why we have a team of financial professionals that builds, reviews, and adjusts financial plans every day to help people gain more confidence, freedom, and time in retirement.

“I always laugh when somebody says that they can do financial planning on their own. You can’t. It’s not possible. We did a whole show recently on the mistakes that do-it-yourselfers make. I don’t do everything on my own for myself because I know that I will make emotional decisions. If I have somebody else that understands my objectives, they’re going to make decisions that are non-emotional decisions. Our emotions of fear and greed get in the way when it comes to making our financial decisions.” – Dean Barber

Our Team Approach at Modern Wealth

At Modern Wealth, our team of professionals includes CFP® Professionals whose first objective is to figure out what’s important to you and build a plan accordingly so that you can live out your dreams. Our CFP® Professionals also work alongside CPAs who will review your plan from a tax perspective. Taxes and health care are the two biggest wealth-eroding factors in retirement, so it’s critical to seek out tax planning opportunities to mitigate taxes over your lifetime.

Risk Management Is Key

We mentioned earlier that it’s critical to review your retirement goals with your spouse. For many people, one of the things that’s most important to them is leaving a legacy. At Modern Wealth, we have estate planning specialists that make sure that nothing falls through the cracks with all the planning that goes into transferring wealth from generation to generation (or to charity).

“You’ve got the wealth transfer portion of financial awareness. That’s understanding how money moves from one generation to the next and how it moves if you have a trust and if you don’t have a trust. When you start combining all those things together, it becomes very complex.” – Dean Barber

Planning for the Unexpected

When it comes to our proactive planning team approach, we can’t forget about our insurance specialists. This also goes back to the National Financial Awareness Day cleaning we were talking about to make sure your insurance coverages are up to date. Risk management is a pivotal component in retirement planning.

“You’re planning for the unexpected. That’s what automobile insurance, homeowner’s insurance, health insurance, life insurance, disability insurance, and long term care insurance is for. You’re planning for the unexpected.” – Dean Barber

And if you’re a Modern Wealth client and/or a loyal listener of our podcast, The Guided Retirement Show, you’ll also know that we now have a Chartered Financial Analysts on staff in our Director of Investments Stephen Tuckwood. Make sure to catch his podcast with Dean Barber on direct indexing that debuts on August 15.

Celebrating National Financial Awareness Day by Planning

But just because our team celebrates National Financial Awareness Day every day doesn’t mean that you can take a set-it-and-forget-it approach with your financial plan. We like to meet with people at least two times a year to review their plan. We want to make sure that your plan is current, so we’ll review it with you and update to accommodate any changes with your life, the markets, etc. If you are a Modern Wealth client and need to review your plan, contact your advisor here.

If you’re not a Modern Wealth client, we have a couple of ways that you can do some planning to celebrate National Financial Awareness Day. One way is by using our industry-leading financial planning tool from the comfort of your own home. It’s the same tool that our CFP® Professionals and you can use it at no cost or obligation by clicking the “Start Planning” button below.

National Financial Awareness Day

START PLANNING

The other way is to get a conversation started with one of our CFP® Professionals. You have the option of scheduling a 20-minute “ask anything” session or complimentary consultation, either of which can be in person, virtually, or by phone. And if you begin building your planning with our tool, we’ll also follow up with you and have a conversation about it as well.

So, let’s start planning. There’s no better way to celebrate National Financial Awareness Day (even though that’s every day for us at Modern Wealth).

National Financial Awareness Day | Watch Guide

00:00 – Happy National Financial Awareness Day
01:37 – What Bud & Dean Want People to Know on Awareness Day
05:32 – Procrastination is a Big Barrier to Success
06:20 – Listen Up DIY Planners!
07:57 – Complete Financial Planning
09:23 – Let’s Talk About DEBT
13:14 – Dean’s Son and Debt
14:43 – Saving Matters, Fight Off Debt
16:55 – Your Largest Asset, Your 401(k)
20:26 – What We Learned Today

Resources Mentioned in This Episode

Articles

Past Shows

Downloads

Schedule a Complimentary Consultation

Click below to get started. We can meet in-person, by virtual meeting, or by phone. Then it’s just two simple steps to schedule a time for your Complimentary Consultation.

Schedule a Meeting

Investment advisory services offered through Modern Wealth Management, LLC, an SEC Registered Investment Adviser.

The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Adviser. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.