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Below, I explore some common planning considerations and issues that I encounter on a regular basis when working with clients and prospects in my generation, as well as steps that our firm has taken to better serve Millennial clients.

Common Planning Considerations for Millennials

  • Saving philosophy.  Many Millennials believe they are too young to have to worry about saving, which often reflects a belief that building retirement savings requires large financial sacrifices.  This is not true.  Education about the power of compounding over long periods of time can provide confidence that taking small steps, starting now, may be all that is needed to build your retirement nest egg.  The chart below highlights the power of early savings.
  • Debt.  It is no secret that most Millennials graduate with hefty student loans, and afterwards incur more debt in the form of home, car, and business loans.  The structure and management of this debt should be carefully considered – e.g., is now a good time to refinance, or take out a margin loan at a low rate to pay off other debt with a much higher rate?
  • Employer retirement programs.  We always encourage participation in 401(k)s and other retirement plans to the greatest extent possible, as they are powerful tax-deferred savings vehicles that may include attractive company match programs. However, there is such a thing as over-allocating if it puts you in a bind and forces you to take actions we discourage, such as borrowing from the plan.
  • Insurance.  Analyzing insurance options on your own can be very confusing, and there is a sense of general distrust when it comes to dealing with insurance companies.  But insurance is absolutely critical for some situations, particularly for young families.  Many employers offer group benefits which can be a great place to start.
  • Estate Planning. Estate planning is not just for the wealthy. Understanding what happens to you and your assets in situations of death or debilitation is very important.

How We Work with Millennials

  • Recently we launched a new service model, Wealthspire Pathways. In recent years, our industry has undergone major technological innovations, and we jumped at the chance to put them to use. Pathways enables us to provide fundamental services for a very competitive fee to clients that are tech-friendly and planning-focused.
  • Over the past three years, we have hired and promoted multiple Millennial advisors.  All of our advisors work closely together, so you still receive the collective experience and knowledge of our team regardless of your specific advisor.  But some younger clients might find that they mesh better with a younger advisor with whom they can establish a relationship that has the potential to span several decades.

At the end of the day, financial planning comes down to economics as well as the management of emotions. Your  financial plan should be adjusted over the course of your lifetime to reflect changes in your personal circumstances as well as the broader legal and economic environment.

 

 

Wealthspire Advisors LLC is a registered investment adviser and subsidiary company of NFP Corp.
Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP®, Certified Financial Planner™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
This information should not be construed as a recommendation, offer to sell, or solicitation of an offer to buy a particular security or investment strategy. The commentary provided is for informational purposes only and should not be relied upon for accounting, legal, or tax advice. While the information is deemed reliable, Wealthspire Advisors, LP cannot guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with regard to the results to be obtained from its use. © 2019 Wealthspire Advisors

Kevin Couper, CFP®

Kevin is an advisor based in the Los Angeles, CA area.