Just like an annual checkup is important for maintaining good health, performing regular financial checkups is an essential part of planning for a healthy and successful retirement. By regularly assessing your budget, goals, and progress, you can make informed decisions to keep your finances on track. Although financial wellness is going to look different for everyone, we’ll share some areas you should be paying attention to in today’s episode

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Episode Transcript

Note: This transcript was produced using AI, so please excuse any typos and inaccuracies…

Marc Killian  00:01

Just like an annual checkup is important for maintaining good health performing regular financial checkups is an essential part of planning for a healthy and successful retirement. This week on Plan wise retire free, Jude and I are going to discuss a financial wellness checkup right here on the podcast

Announcer 2  00:23

any successful plan requires wisdom and preparation. And retirement is no different. It’s time for the plan wise retire free podcast.

Marc Killian  00:32

Hey, everybody, welcome into the show Jude and I here to talk with besting financial retirement. And we’re gonna let doc Jude play a doctor on the podcast here. He’s not a doctor, but we’re gonna let him play one do some financial checkup conversation with what’s going on my friend? How are you? Hey, I’m

Jude Wilson  00:47

doing well. How are you? My

Marc Killian  00:48

friend? Got a little allergy cold something they’re like going to hear a little something. Yeah, well, you know, it’s, you know, was like 58 degrees the other day after being at something for two weeks. So it was very strange. Yeah,

Jude Wilson  01:01

I hate to say here in Florida that you know, it’s it’s down to the 60s is about as cold as it gets. But yeah,

Marc Killian  01:08

well, it’s just one of the things and I think it’s just pollen or whatnot just gets it’s that time of the year is still still April at the time, we’re taping this. So it is what it is. But you and I are going to talk well, you know what, since I’m a little under the weather, it works well for me, right? Yeah. All right. So we’ll treat this kind of like a little fun Dr. analogy, you know, the financial doctor, if you will. And let’s just kind of start with the basic thing, you know, checking your vitals, right? So when you go in, like you see the nurse, right they that gets you on the scale, they put a little thing on your finger, and they did a little, you know, blood pressure cuff. Right? So they’re kind of getting your, you know, kind of getting your vital information. So what’s our financial vital information during what would be the kind of the breakdown here?

Jude Wilson  01:48

Well, what I love about this particular topic is that we’re using the doctor or medical analogy, but it fits the principles of good financial planning. And so when you talk about reviewing your goals, it’s everything from whether or not you’re saving to go on a major vacation, or you’re saving for that to make work optional, right really should have a list of the goals that are most important to you, and the timeframe in which you achieve it. That’s why one of the things that we do at the firm, that’s one of the first actions we do is we sit down, we ask the client, what is it that you’re trying to accomplish? What would make your life happy financially? And then, and then we make a list of all those goals, because you got to benchmark it,

Marc Killian  02:35

right? And if you’re thinking about your vital signs, if you will, that’s probably for your financial health is going to be like your budget, right? I know the B word. But it’s you’re in and out, right? What’s coming in what’s going out.

Jude Wilson  02:46

It is so important to be tracking that in early in my career. I used to give clients a Excel spreadsheet budget spreadsheet, come to find out people hate doing those. Oh, yeah. So now what we do with our financial planning software that our clients have access to, is that they can see something called their burn rate. And that’s basically how much money is going out the door. And we try. And with each client, we come up with a specific goal for their burn rate. You know, some clients come in, they could be burning 80%. And we really want to get them down to a 50 or 60%. Right. But you just don’t know unless you track and that’s why I started with tracking is so important. Yeah,

Marc Killian  03:30

yeah, that’s a great point. That’s a great way to break it. I like the burn rate, too. That’s a good way of thinking about a little bit different, different use of the B word. There you go. Alright, so let’s go to number two here, financial doc building some financial immunity, right. So if you think about, you know, discussing things with your doctor, you’re going to try to work on your overall you know, just how your immune system responds to stuff. Well, same thing financially speaking. So what’s what’s our financial immunity? Here? We probably liquid assets, something some sort of cash, that kind of thing? Absolutely.

Jude Wilson  03:58

And you you brought it up without even knowing what I was gonna say, but you hit it on the head there liquid assets. Okay. So in our process with our clients, we put them on our system called elements. And each element is kind of it looks like the periodic table of elements when you were in high school. Right? Yeah. So each element has a specific purpose and a benchmark, and one of them is liquid term. And that basically is how much emergency fund do you have to cover your bills? Is it Yeah, one month, two months, three months. So when we bring a client onto the system, we’d like to see what their liquid term is, and set a benchmark for how many months they should have emergency savings.

Marc Killian  04:42

Gotcha. You know, and I think the liquid conversation has changed a lot through the years dude, because it’s like, alright, what is truly liquid nowadays? Is that walking into the bank and grabbing some cash and walking right back out, or is it something you can access in three to five days because a lot of accounts can be accessed like that now too. So absolutely,

Jude Wilson  04:58

actually. wouldn’t be so quick to turn around, you could sell a mutual fund portfolio and have the money in your account in about three days. You’re absolutely right.

Marc Killian  05:07

Right. So is that liquid enough? Possibly, right? So I think maybe the days of saying I gotta I gotta have it in the mattress, or I can pull it right out. Maybe not quite, quite there now, although then again, you might want to do that because the world weird. All right, let’s go to our debt diagnosis. The next piece on this would be look at talking about just kind of the importance of reducing it down, right. I mean, there’s lots of schools of thought on it. But I think we can all agree that if we can get it lower, especially the closer we get to retirement, then that’s just a win anyway, you’re

Jude Wilson  05:36

so right about there being so many schools, there’s people like Dave Ramsey, that hate debt, and you should be at zero, right. And there’s all people to Robert Kiyosaki that says good debt that you can leverage is not a bad thing. And so each client has to have a custom financial plan. Yeah. And that’s where we really dig and find out what is it that is your mental mentality toward money? And what are the goals because if you’re trying to create a real estate empire, you might have some really good debt, if that’s true of your goals, that’s true. But if you want to be completely debt free, by the time you retire, we need to be able to put you on a path to get there. And that’s why I love this system that we’ve created this elements, because one of the elements is debt ratio, and the kinds that yeah, kind

Marc Killian  06:27

of having that structure so that you can manage whatever you’re trying to get to. And obviously, the sooner we can get on, you know, some sort of a strategy system and plan in place, the more it’s going to help us to try to eliminate that stuff as we’re working our way through it, versus trying to get it all paid off at one time or, you know, whatever the case might be. Alright, so usually, when he goes to the doctor, you go through these various different pieces, when you’re done, they say, All right, well, let’s look at some proactive steps for you to them was always say lose weight, I don’t care if you’re gonna get, it’s always been there, everybody’s like, lose weight, you know, you can probably weigh like, you know, 12 pounds, and they’d say, lose weight. But some proactive measures, some preventative measures on the financial side, you

Jude Wilson  07:05

Yeah, I think one of the areas that I see most common for people that they just, they just miss it. And that’s really looking at all the different insurance coverages that you have. Typically, when we think insurance, we think of our car insurance, we think of our health insurance, right? Some people might think of like life insurance. And all of those are important. And all of those do need to be checked, because they should have certain levels. But there’s also other insurance policies, one of the biggest ones that I see is umbrella liability. Most people don’t know what umbrella liability that they have, or whether they even have it or not, if you have a home you probably have it is through your homeowners insurance. But if you have a healthy net worth, you’ve got to protect yourself and the umbrella liability policy is part of that of that tool to protect yourself. Yeah,

Marc Killian  07:55

that’s a good point. And I think if you’re thinking about being proactive, and preventative insurance is one, taxation would be the other, right? And how to kind of be let’s be proactive here. Because, you know, we’re about to get kicked in the you know, what coming, you know, in 2026, when the current tax code sets, if nothing, I mean, we’re gonna have to see what happens with this crazy goofy election. And then after that, we may or may not get a tax cut change immediately. Within 2025, that could happen. But realistically, no one does anything. And they either continue on the the policies, or they make a whole new one starting in 26. Either way, that tax train is changing soon. Yeah,

Jude Wilson  08:33

I feel like Paul Revere, but instead of setting the British are coming, I keep on telling clients that taxes are COVID. And this is something that we have to be proactive about. Because let me tell you, 99.999% sure that in 2026, when the taxpayer and Jobs Act expires, taxes will go up. Yeah, it’s almost inevitable.

Marc Killian  08:59

I mean, yeah, you look at all the stuff out there and almost has to be I mean, I would love to be wrong, and they keep it exactly the same. But who knows, right? It’s all going to depend on who winds up in the White House at the end of this year. So that can have a huge swing on things there. So when you’re getting that wellness check, you’re going through everything you’ve got stuff done, dude, the final pieces in it just kind of following up, right? You go back and see your if you have a test, you know, if you have a little EKG or you have a little ultrasound or something like that, you go back for the follow up. So same thing with what you guys do to help keep you people on track. You build plans, and then you follow up, then you work those plans. Yeah,

Jude Wilson  09:33

one of the biggest mistakes that I see financial other financial advisors do in their clients, not really paying attention to this. They build a great financial plan when they walk in the door. And then they never update the plan or they look at the plan once a year. And maybe that might not be enough time to make changes so true. In the way that we do it with our system. We choose the three most important bits Just marks in elements, whether it’s debt ratio or burn ratio, and quarter, your client gets a quarterly update and shows where they’re at. And we also talked to them annually, because we’ve got to make progress. It’s all about making progress doesn’t have to be perfect. It’s progress, not perfection.

Marc Killian  10:16

That’s a great point. I really liked that. Right? So it’s a matter of making that progress getting some of these things moving and going forward. And I like that it’s progress, not perfection, because I mean, for humans, perfection is not obtainable. So there’s no point in trying to chase that dog. Right? Absolutely.

Jude Wilson  10:31

Absolutely. So we got it. We give some clients grace, sometimes when we set a benchmark, you know, like debt ratio, if you’re already at 80%, maybe going down to 50% in one year is too is aggressive. Okay. Oh, you know, if you’re if you bring it down from 80 to 75, we will give you a little grace. It’s all about the progress. There you go. I

Marc Killian  10:51

like that, folks. Well, there you go. That’s a little Doctor checkup this week, your financial checkup on the podcast don’t forget to subscribe to us on Apple Spotify YouTube, you can find all the information at centrist fs.com That’s centrist. fs.com We’ll have links in the show notes for all this stuff. And keep your eyes out. We’re gonna be making some changes to the podcast. Yes, sir. In the next few weeks, coming in June, you will a little change for June in June. Perfect going on. So we’ll we’ll keep you posted on that as we go. But for now, thank you for hanging out with us. We always appreciate your time. Dude, my friend I will see you next time here on the podcast. Always a pleasure.

Announcer 1  11:35

The preceding program is sponsored by Jude Wilson, who is solely responsible for its content. Financial Planning and advisory services are offered through prosperity Capital Advisors PCA an SEC registered investment advisor, with its principal place of business in the state of Ohio centers financial strategies in PCA are separate non affiliated entities. PCA does not provide tax or legal advice, insurance and tax services offered through centrist financial strategies are not affiliated with PCA. information received from this podcast should not be viewed as individual investment advice. Product discussions and illustrations are hypothetical in nature and will vary based on many factors including but not limited to age, health, product, insurance, carrier and product design, you should consult the insurance carrier website and policy for detailed information. For information pertaining to the registration status of PCA, please contact the firm or refer to the Investment Advisor public disclosure website WWW dot advisor info.sec.gov. For additional information about PCA including fees and services sent for our disclosure statement as set forth on Form ADV from PCA using the contact information here in please read the disclosure statement carefully before you invest or send money