Each time I write a financial plan for a new client they are given a "Data Gathering" packet requesting a host of information. It's dreaded, I know. Just to name a few items, the list of documents requested includes credit card statements, tax returns, pay stubs, insurance declarations pages, estate planning documents, employee benefits handbooks and on and on and on. Believe it or not, I'm not requesting these documents as a form of "financial data gathering torture." It's because my goal is to write the most comprehensive financial plan possible. It's also because even the smallest detail missed can have big long-term implications.
Over the years, while reviewing these documents, I've found my share of omissions, missed opportunities, and mistakes including:
A rental car reimbursement rider on a car insurance policy for a client who already owned more cars then they drove. When I inquired why they had the rental rider, the client remembered he had added it years ago for a cross country trip and then forgotten to remove it afterwards.
An ex-boyfriend from years ago named as the beneficiary on an account. The client had since married and had children with another partner.
Membership to an athletic gym that was hundreds of miles away from where the client now lived.
Monthly subscription to a resume writing service from when the client was unemployed years prior.
Children on an auto insurance policy who had since graduated college, gotten a job, and were paying on their own auto insurance policy.
But last month I had, perhaps, my biggest "Aha!" moment since I've been writing financial plans. A client had secured a new job and so I requested to see their new paystub. In reviewing their pay stub I found a line item deduction I didn't understand; it didn't meld with what they had previously told me their retirement benefit was. After some research, we discovered the deduction wasn't related to their defined contribution (i.e. a 401(k), 403(b), Simple IRA, etc.) plan, but rather that they had a defined benefit (i.e. pension) IN ADDITION to a defined contribution plan. For this client, it would mean a pension of ~$12,000/yr. Factored in over a 30 year retirement, it would mean ~$360,000! But we weren't done. The spouse had also recently transitioned to working for this same employer and their pension (based on a higher salary), unbeknownst to them, was $22,000/yr, or $660,000 over a lifetime! That means we effectively "found" A MILLION DOLLARS!!! Suffice it to say, this was pretty life-changing. While they not only now have hundreds of "extra" dollars per month to spend as they please (since they don't need to contribute as much to retirement), they're also enjoying a life more free from the constant stress of wondering if they'll be able to save enough for a secure retirement.
Hopefully, this "success story" helps you understand now why I ask for all that I do. And if we haven't reviewed your benefits since getting a new job, let's get in touch. Don't have a financial plan? Maybe you can see now why my job can be so much more than just "buy this stock, sell that one."