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The clients of our firm worked for their money. I cannot think of a single client who inherited a meaningful chunk of their net worth. There are things we do for all of them to protect what they have built — if that’s the intent.
The list that follows is somewhat anecdotal, but it is my attempt to capture the significant, but addressable, risks to wealth that I have seen thousands of very successful retirees ignore time and time again.
1. Estate planning
There is a rule of thumb that says that you should review and possibly update your estate plan every five years. I have seen very few folks do it with this frequency, but even if you do check that box, that’s only part of what I’m describing here.
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Ask yourself this question: “Are my documents, the ownership of my assets and my beneficiaries saying the same thing? Is that aligned with my wishes?”
Let’s say you had your documents updated a couple years back. As part of that, you added a revocable trust to the will, medical and financial documents. You left the attorney’s office feeling very responsible, but that 5-inch binder is gathering dust on your bookshelf.
The revocable trust left money to your two kids in two different ways based on their lives and their financial habits. The home, bank accounts and taxable investment accounts were meant to be trust-owned. You did the house because the attorney drafted the deed transfer, but the others are on an ever-growing to-do list.
The beneficiaries of your retirement accounts are probably the same as they were before the update. Were you supposed to change those? This is not meant as a criticism. This is proof that you are normal.
I put this work on the adviser or financial planner. Not because they are the attorney and not because they’re going to change the beneficiaries on your bank account, but because they/we are typically the only ones with a broad enough view to recognize whether things are aligned.
If this sounds like you, the risk is that the kid who’s not so good with money gets a check for a few million when you die. In the worst case I have seen, the ex-spouse gets the life insurance. If this sounds like you, I encourage you to have your adviser or someone do a review.
2. Insurance
If the first one sounded brutally boring and somewhat depressing, buckle up! I recently got kicked off my auto insurance because of a fender bender (maybe one too many). My home, auto and liability insurance were all with the same company, which meant a completely new property and casualty plan.
Property and casualty insurance is something your adviser typically doesn’t handle. If they are a CFP professional, they have some training on the topic but probably not enough to pore over your policies and make specific recommendations. Guilty.
For this reason, we lean on partners whose clients are just like our clients and who can look at these policies and say, yes or no, they have the right coverage, and they cost the right amount.
Whether that’s the right amount depends on your net worth as well as the risk your day-to-day life exposes you to. Someone with $5 million with a pool in their backyard and several rental properties requires a different amount of coverage than someone who doesn’t drive and lives in a condo but also has $5 million.
You should have these policies reviewed every couple of years, or sooner, if your circumstances change.
Pretty much everyone you know can tell you a horror story of a loved one who suffered physically, mentally and financially at the end of their life. Long-term-care insurance is meant to alleviate some of that financial suffering.
Probably because there are so many horror stories, I find this to be the least ignored of the three types of insurance I’ll talk about here. The issue I often see is that people talk to an insurance agent and either get the coverage, or they are so put off by the cost that they decide to roll the dice.
Insurance, at its core, is a transference of risk, and a large percentage of our clients have chosen to retain the long-term-care risk. However, I don’t think this is a binary decision.
That large group of people who were so put off by the cost may still benefit from a smaller policy with a smaller premium. Let’s say you do some research, and the average monthly cost of care in your area is $10,000 per month.
That doesn’t mean you need a policy with a $10,000 per month benefit. You need the gap between what you have from income streams and investments and what the cost would be. If your financial plan says you can spend $8,000 per month, you’d probably sleep better at night knowing you had that $2,000 gap covered by insurance.
Life insurance is the one where, more often than not, we recommend reducing coverage. (Hate mail from life agents incoming.) The exception to this are those who have a legitimate insurance need, definitive legacy goal or a taxable estate.
Regardless, our approach always starts with a needs analysis, which we do within our financial planning software so that we can factor in things like legacy goals and possible tax liabilities. There is a free version of that software you can use. From there, we either add or drop insurance.
3. Tax projections
As I write this, we are just wrapping up the 2025 filing season. At this stage, looking back at 2025, there is very little anyone can do to meaningfully change the outcome of their tax liability.
This is just about as efficient and as dangerous as running backward instead of forward. The things in front of you are much more important to keep an eye on than the things you’ve already run by.
The same is true when it comes to tax planning. Of the three issues on this list, this is the one that prospective clients have never tried to address before coming into the firm.
Perhaps it’s because it requires tech tools beyond Excel (the same software I linked above can also do this for you). Perhaps it’s because paying a larger lifetime tax bill than you have to stinks.
Still, failing to consider tax planning probably isn’t as bad as dying without an estate plan or having a lawsuit wipe out your assets.
For retirees, tax projections tell us which accounts to pull from and when. In a high tax year, we are doing everything we can to defer taxes. Income is coming from cash, taxable accounts and Roth accounts.
We are accelerating deductions. In low tax years, the opposite is true. If we don’t have a sense of what this year looks like compared with the future, we are left to guess. This is not a good strategy.
There is a ceiling of complexity in all aspects of our life. I am willing to replace a fill valve in my toilet. The stakes are low. I am not willing to replace the pipe that runs to the toilet. The subsequent flood would cost more than the cost of the plumber.
The same often happens with your wealth. The bigger the balance sheet, the bigger the decision and the bigger the cost of getting it wrong.
If you feel like you’ve hit that complexity ceiling, it’s worth getting a second set of eyes on the problem.
