Importance of Planning

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Presentation transcript:

Importance of Planning

Importance of Planning Components of Planning Stages of Planning Navigating Your Plan For those of you who are some of GuideStone’s most recent hires, let me explain what Healthy Monday is. We take one chapel service out of each quarter and focus on one of the four areas of total body wellness. Nutritional, Physical, Financial and Spiritual/Mental. The nutritional aspect of our wellness was the focus for the first quarter of 2015.

Importance of Planning Why Plan? Having a plan is critical to achieving retirement goals Taking advantage of financial education opportunities, online budgeting and planning tools can help with creating your plan Following the plan and navigating the plan for changing conditions will increase the likelihood of success “Without counsel plans fail, but with many advisers they succeed.” – Proverbs 15:22

Components of Planning

Components of Planning Establishing goals Budgeting and Spending Wisely Saving Investing Implementing and Monitoring Budget & Spend Wisely Invest Save Implement & Monitor Financial wellness is having an understanding of your financial situation and taking care of it in such a way that you are prepared for financial changes. Maintaining that balance consists of being knowledgeable and comfortable with where your money comes from and where it is going. What does financial wellness look like? Having a written financial plan to help achieve your goals Living within your means and having debts and obligations you can meet Feeling stress-free about money

Budgeting and Spending Wisely Budget & Spend Wisely Invest Save Implement & Monitor Have an emergency savings account Develop and follow a budget Minimize debt A plan for your money (usually done monthly) Helps you achieve your goals Should reflect your priorities Food, shelter, clothing are first – Pizza, movies, toys are last Can be on paper or the computer Not a one-time thing! Must be tracked If you keep the score, the score tends to improve Must be revisited Expenses Change Spend less than you earn and measure your progress

Waiting costs more than saving Start early and pay yourself first Never leave a match on the table Avoid taking loans or pre-retirement withdrawals Be a consistent saver and work toward saving 15% Invest Implement & Monitor Save Budget & Spend Wisely GS MATCH - explain Pay yourself first Automate it Direct deposit to a savings account Auto-transfer to savings account “Keep the change” programs Think about spending in terms of hours If I make $10 an hour and buy something that costs $100, is it really worth the 10 hours I worked? Think about your priorities If you’re about to make a purchase, ask yourself if this money could be used for a higher priority Waiting costs more than saving

The High Cost of Waiting Growth if saved $100/month at 6% earnings until age 65 Total Savings Forfeited Savings While it may be true that, with career changes or raises, you could have more money to invest when you are older, it is also true that the shortened time that your investments will have to grow will mean that it will actually cost you more to get the same result than if you had started earlier. The biggest mistake you can make is assuming you don't have any money to save. If you earn an income, it's simply a matter of how you're spending it. You probably can put some money aside each month — if you make saving for your future a priority. The longer you wait the more money you will need to save each month to make up for lost time. Began Saving at Age This hypothetical illustration is intended to demonstrate compounding and is not intended to illustrate the performance of any actual program. The hypothetical illustration shows a constant rate of return, whereas actual rates of return may fluctuate. Account values were obtained by using a nominal rate of return compounded monthly. Contributions are made at the beginning of the period.

Investing Importance of being in the market Importance of diversification GuideStone options One fund solution: MyDestination Funds® Asset Allocation Funds GuideStone Select Funds Budget & Spend Wisely Save Invest Implement & Monitor Find an allocation you are comfortable with and stick with it Don’t make any movements based on short-term or current events Difference between losing value and “losing money” Stay invested

Importance of Being in the Market Stay Invested By trying to time the market, if you miss even just a few of the best days, your long-term results are negatively and meaningfully impacted.

Importance of Diversification

Implementing and Monitoring Execute plan Review annually, especially after 50 and anytime goals, risk tolerance or personal situation changes Adjust savings and spending plan to close any gaps Invest Save Implement & Monitor Budget & Spend Wisely

Stages of Planning

Starting Retirement Building Retirement Living in Retirement Stages of Planning Starting Retirement Building Retirement Navigating Pre-Retirement Living in Retirement

Stages of Planning Starting Retirement: 20s and 30s Have a written plan Create a budget Spend less than you earn Open and fund your retirement account Build an emergency fund Pay off student loans or credit card debt Begin a discipline of saving with your first job

Stages of Planning Building Retirement: 40s and 50s Minimize debt Balance your long term savings goals Invest for a long life and for the long-term Catch up when and where you can Don’t lose sight of your retirement savings goals Stay focused on the long-term goal

Stages of Planning Navigating Pre-Retirement Refine what you want your retirement to look like Play catch-up if you are behind Watch your spending and consider lifestyle changes Create a realistic budget for retirement Assess Social Security benefits Rebalance your portfolio Eliminate debt before retirement Organize your assets Refine what you want your retirement to look like Plan for longevity Don’t count on working forever Play catch up if you are behind Watch your spending and consider lifestyle changes Assess social security benefits Rebalance your portfolio Create a realistic budget for retirement Consider long-term care or create a plan for health care costs Eliminate debt before retirement Organize your assets Create a realistic budget for retirement

Stages of Planning Living in Retirement Enjoy your retirement and make room in your budget for fun Maintain six months of cash Follow a wise drawdown strategy Follow your budget closely, making changes as needed Stay invested Make sure your asset allocation is still appropriate Re-evaluate annually or rebalance as needed Review asset allocation, budget and withdrawal strategy annually

Navigating Your Plan

Manage your portfolio assets according to risk and time to retirement Navigating Your Plan Expect Changing Conditions: What You Can Control Budget and spending rate Savings rate Diversified asset allocation Manage your portfolio assets according to risk and time to retirement

Focus on what you can control Navigating Your Plan Expect Changing Conditions: What You Can’t Control Market conditions Health and longevity Other outside factors Focus on what you can control

Navigating Your Plan MyGuideStone™ Customer Relations Center On-site visits by relationship managers or advisors Webinars Advice (GPS*) Online self-service tool Appointment with Personal Financial Services advisor * GPS:Guided Planning Services is our personalized advisory services offered by GuideStone Advisors

Disclosures You should carefully consider the investment objectives, risks, charges and expenses of the GuideStone Funds before investing. A prospectus with this and other information about the Funds may be obtained by calling 1-888- GS-FUNDS (1-888-473-8637) or downloading one at GuideStoneInvestments.com/funds. It should be read carefully before investing. Retail products are made available through GuideStone Financial Services, member FINRA. GuideStone Funds shares are distributed by Foreside Funds Distributors LLC, not an advisor affiliate.

Disclosures The MyDestination Funds® (“Funds”) attempt to achieve their objectives by investing in the GuideStone Select Funds and other investments. The Funds are managed to a retirement date (“target date”) by adjusting the percentage of fixed income securities and equity securities to become more conservative each year until reaching the retirement year and then approximately 12 years thereafter. The target date in the name of the Funds is the approximate date when an investor plans to start withdrawing money. The expense ratio for the Funds includes the expenses of the underlying Select Funds. The principal risks of the Funds will change depending on the asset mix of the Select Funds in which they invest. You may directly invest in the Select Funds and other investments. The Funds’ value will go up and down in response to changes in the share prices of the investments that they own. The amount invested in the Funds is not guaranteed to increase, is not guaranteed against loss, nor is the amount of the original investment guaranteed at the target date. It is possible to lose money by investing in the Funds.

Disclosures The Asset Allocation Funds (“Funds”) attempt to achieve their objectives by investing in the GuideStone Select Funds. The expense ratio for the Funds includes the expenses of the underlying Select Funds.  The principal risks of the Funds will change depending on the asset mix of the Select Funds in which they invest. You may directly invest in the Select Funds. The Funds’ value will go up and down in response to changes in the share prices of the investments that they own. It is possible to lose money by investing in the Funds.