A successful retirement isn’t just about your investments. For many retirees, the biggest, most crucial thing is having a comprehensive retirement plan–of which the portfolio is a big piece.
What many people don’t realize is just how much work goes into the plan. Even if you have a financial advisor, you might just be getting the portfolio–not the planning or the strategies to address taxes, legacy, cash flow, and more.
In today’s episode, we’re talking about why a good financial plan matters, why they’re going to remain important for years to come, and potential gaps in your own retirement strategy to fill in as you chart a path, secure your future, and live your dream.
In this podcast discussion, you’ll learn:
- The value of having a team of specialists who can all execute in different areas.
- What’s missing from your retirement plan when all you have is a portfolio.
- Why it’s so easy to accidentally pay egregious and unnecessary fees when working with financial professionals.
- What a deep dive into tax planning looks like–and why it’s a lot more than looking at your taxes in the rearview.
- How a strong financial plan makes it easy for clients to assess their assets, investments, cash flow, legal documents, and net worth in a matter of seconds.
- “The goal is to take each person from confusion to clarity, to be more clear on your plan than you’ve been in the past.” – Derek Gregoire
Read the Transcript
Derek Gregoire: Welcome everyone. We’re here with Matthew Peck. I’m Derek Gregoire. And we’re talking as we’ve kind of that the whole heading of this show, Matt, is Plan vs. Portfolio.
Matthew Peck: Alright, the P’s.
Derek Gregoire: And it sounds so simple, right? It’s like Plan vs. Portfolio, what does that even mean? But I would say that in terms of a value-added when you’re working with a financial planning firm, or more importantly, not even to those terms, when you’re getting ready to plan for your retirement or in retirement, knowing whether you have a plan or just a portfolio might be one of the biggest crucial things you need to know in order to have a successful retirement.
Matthew Peck: Or another way of putting it to is in the sense of years ago when we started to transition more towards planning versus a portfolio, it’s always good to sort of dust that off a little bit and update it and kind of use some language and use some sort of examples of ways of expressing what that means. And kind of what we’re talking a little bit about the pie, and so, we’ll try not to make too many blueberry pie and apple pie references, but it’s very crucial because it gives a very good idea of how big the financial universe is and how much work there is because there are so many different people that would benefit from this type of message because like, for example, you have the do-it-yourselfers, right? And then we talked about in the past how at times we might not be the best fit for do-it-yourselfers, but I think when you kind of listen to what we’ll talk about today, you get an idea of just how much work it is. And yes, you might be doing the portfolio, but are you doing the planning, right? Or if you do have a current advisor, yes, you’re probably just getting the portfolio, but same idea, are you getting the planning? So, it’s just good to really update people on what’s been going on, why it’s important, why it continues to be important, and I think people will get a lot of value out of today.
Derek Gregoire: Well, Matt, just to kind of spearhead this conversation, it’s kind of funny because I won’t give the details, but you’ll know who I’m talking about. There’s a client that we work with that has several million dollars with us. And not everyone does, some people have less, some people have $20 million, but this person has probably $7 or $8 million. And the reason I’m bringing it up is because she had brought her brother into the meeting who’s a doctor, and her brother, she wanted him to kind of see what we’re doing for her and to see if hey, would be a good fit for him? And would we at SHP welcome him as a client? It makes sense for us, right?
And long story short, but he came to the meeting with us. We did a review meeting. We went through the portfolio. We went through the tax strategy, the legacy strategy, the cash flow strategy, all the different things that involve a plan. And long story short, I ran into him this past week. And he’s like, “Derek, I have to ask you something.” He’s like, “Do you guys do that for every client?” He’s like, because no one– I’m not trying to pat ourselves on the back because no one does that. He’s like, I’ve been around the block. This guy has probably $20 million, right? And he’s like, I’ve been around the block for years. I’ve had a lot of financial firms I met with. He goes, no one keep doing what you’re doing because no one does that. He goes, even the person I’ve been using for years, I meet with him or her once a year. And here’s what you made. Here’s what you lost. And that’s really the whole meeting, right?
And so, I think it’s important, and you know what I’m talking about, but having a plan versus just a portfolio is something you really need to think about. And hopefully, as you’re listening in all the things we’re going to talk about today, hopefully, at the end of this year, like, you know what? I have most of that covered, but if not, you might realize, this might be a wakeup call to say, there are so many things that are missing, and my plan is incomplete where I thought I had a plan, but hopefully, after listening today, we can open your eyes to some things that you might be missing.
Matthew Peck: Absolutely, and not to digress too much because we have talked about this in other podcasts and other radio shows and whatnot, another example of how we’re different is the different structure between a firm that will just be doing portfolio versus a structure that will be doing a portfolio and a plan is the amount of people that we have and the teammates that support. So, as you tell that story, it’s like, okay, yeah, we’re doing that because we have the ability, because we have all of these people that are all kind of rowing the boat in the same direction. And so, as I said, we’ll get into the difference between planning and portfolio and sort of how that that world works. But it’s just as I said about how during different sessions, people like, wow, you have that many people, it’s like, we need this many people in order to do what we say we’re going to do.
Derek Gregoire: Exactly. You have to execute on a full plan. You need good people that specialize in different areas that can execute on it.
Matthew Peck: Yeah, and not another firm locally in the South Shore, I remember I met one of their sort of chief investment officers. So, very often, just so people know kind of a little background of our world because put it this way Derek, you’ve talked about that client, they’re our client, right? But then you have the Fidelities of the world or the…
Derek Gregoire: Competitors.
Matthew Peck: Yeah, or I wouldn’t say that necessarily, but more like where SHP is the client. And what I mean by that is wholesalers, like people, firms like Invesco and PowerShares and VanEck, Black Rock, JPMorgan.
Derek Gregoire: We’re clients of theirs, if we’re using their funds in our portfolio.
Matthew Peck: Exactly. Just so everyone knows a little bit about sort of how our industry works is, normally, we’re talking to you like, we would like you to be our client, and so, we prefer to focus on you. But every once in a while, SHP is a client when, as I said, JPMorgan and all these groups will reach out to us. And as you were saying, rightly so, they try to pitch us on using their funds in our portfolios. Long story short, it was one of those events, and so, is another firm here in the South Shore, and it was a father and a son, like a couple of the ad men in, and then that was it. And so I’m like, how much are you managing? They were managing a good amount of money under their book. And I was like, but it’s just you guys. And they’re like, yeah, just us. I’m like, but I mean, okay, yeah, so…
Derek Gregoire: They do everything.
Matthew Peck: Yeah, right, exactly. How do you possibly do everything that the client needs when there’s only three or four of you? So, it’s a perfect example of that firm was very, very good at doing portfolios.
Derek Gregoire: Sure.
Matthew Peck: But that’s it.
Derek Gregoire: Exactly.
Matthew Peck: So, yeah, let’s talk about that difference.
Derek Gregoire: So, the title of this entire show is Plan vs. Portfolio. And when I say plan, I’ll call it, just because this is what we do, we have the SHP Retirement Road Map, that’s our planning process. We’ve trademarked the news for years. So, when we say plan, that’s what we’re referring to, so Plan vs. Portfolio. So, just to make sure everyone’s on the same page now, when someone say, what’s a portfolio? If we say, someone comes in, that’s all they had is a portfolio, what does that mean?
Matthew Peck: So, to kind of walk through that entire process, I think when people just have portfolios, they come into a meeting, let’s say, for the first time, and the meeting itself is focused on two aspects. One is, so the advisor, whoever that may be, will talk to the client, and they’ll talk a lot about risk tolerance. They’ll talk about like, okay, are you moderate? Are you conservative? Do you get stressed out if the market goes down, and things along those lines? So, they’ll take down some basic financial information, but a majority of what they’re looking for is what’s the client’s risk tolerance? Like how much are they willing to lose, right?
And then the second half or the solution to whatever the client needs or the client sort of expresses, so they’re moderate, whatever is, then a complete focus on just the portfolio. So, it’s like, okay, we use these stocks or we use these mutual funds or we use these ETFs or we use these combinations of them. And then they talk about their investment committee where, generally speaking, their portfolio in their investment committee, sometimes it’s in-house. Other times, it’s levels, levels of way where it’s being managed down in New York or it’s being managed in Boston or Philadelphia or Florida, where generally speaking, when the consumer is talking to the advisor, the advisor really is just sort of parroting whatever investment committee is saying to them. And that’s it. I mean, it’s just like, okay, I mean, you kind of know what your money’s moving and how it’s working, but it’s focused just really on the product, it’s focused, as I said, on the ETF, the mutual fund of the stock, and some far-off investment committee. But that’s it.
And then it’s okay. And then, they’ll get them into a whatever portfolio it is and then every other meeting from that point forward is okay, here is how your moderate portfolio has performed and moved up or moved down. And here is why, because the interest rates did this, and the oil markets did that, and then, alright, have a nice day.
Derek Gregoire: Yeah. So, if you’re listening, I want that to be clear because sit back for a second and think about like, is that your plan? Because if your plan is all based on here’s how you did, here’s your portfolio, and you’re relying on your retirement plan just on that one key feature, or even if you manage it yourself and you say, I’m going to do it myself or I can handle this, but it’s all you have is a portfolio, here’s you want to consider. So, I’m not sure if there’s probably a better illustration, but picture us drawing on a board, and actually, we have a vision…
Matthew Peck: How much you have. If our producer, Evan, are we going to be able to…
Derek Gregoire: Probably not. But we’ll picture…
Matthew Peck: You smiling and nodding nicely. Like, yes, your buddy will…
Derek Gregoire: But let’s say you have a pie chart, picture a big circle with five pieces of pie, right? And each piece of pie actually has more subs, all the bites that come with it, right? So, picture five pieces of a big pie. And having an investment plan is something that we do for our clients. Obviously, we manage portfolios in-house. We have five or six people in our team on our investment committee that just handle our portfolio management. That’s all they do day in and day out. They’re not meeting with clients, they’re just doing that. That’s their one thing. And that’s huge. That’s important.
But if you just have one piece of that pie, you’re missing the other four areas. So, when we say having a plan versus having a portfolio, the retirement roadmap that we build for our clients consists of five key areas. Again, think of that pie chart and think of five pieces of pie, one piece is investments, right? Everyone should have an investment plan. It should be based on risk tolerance. In life, it should be rebalanced, it should be looked at, it should be managed well.
Matthew Peck: Absolutely right.
Derek Gregoire: That’s important. But then you have to go to income planning, right? And then in income planning, that’s another world that involves Social Security planning, pension decisions, cash flow, calculating expenses, making sure what’s the impact of inflation.
Matthew Peck: And just to pause, because we use the term like cash flow a lot, I mean, just so everyone knows, cash flow is just like, okay, really a breakdown in the budget, how much is coming in and how much is going back out. What’s the flow of the cash? And are we in the positive? Like, are we actually saving more money? Or is the money going down, etc.? So, just want to let you know because we use that term cash flow a lot, and everyone’s around like, I want to make sure people understand exactly what that means.
Derek Gregoire: Good point.
Matthew Peck: So, keep on going.
Derek Gregoire: And we’re going to break each one down a little bit further. But that’s another world, that’s world number 2.
Matthew Peck: Right, absolutely.
Derek Gregoire: Income planning. It’s when you retire, you need a paycheck. World number 3 is tax planning. And we’re not talking about just looking in the rearview mirror of, hey, it’s tax time, let’s file our taxes. No, we’re talking about tax planning, looking through the windshield and saying, what’s coming ahead? What does the economy look like? What does the world look like? What should we do now to help ourselves down the road so taxes aren’t a big issue? So, tax planning is it, I’m almost afraid to move on so quickly. I know we’re going to get back to it, but it’s such a big, important part of retirement planning. It’s almost as crucial. Or maybe, I don’t want to say more important, but when you look at investments, taxes is right up there because look at what taxes are, and if your biggest investment is your IRA, 401(k), or 403(b), that’s all money that’s owned by you and Uncle Sam. So, tax planning is world number 3.
World number 4 is health care planning. We had a whole podcast on health care, long-term care planning, Medicare planning, Medicare supplement, how to build all that out prescription drug plans. When you hit 65 or even pre-65, everyone needs health insurance. And then the final area, world number 5 is legacy or estate planning. That’s coordinating trust planning. That’s coordinating how to make sure all the money you’ve worked so hard is passed on to the people that you care most about. Like, for example, you might be listening and say, I’m not concerned about legacy planning. Well, you still want it to go to your children or a charity or someone you care about more than the government, I’m guessing. So, you still want to make sure it’s planned for, but there’s a lot of you listening might say, hey, I already have health care covered, but I’m really lacking in taxes.
And so, the long story short, when we build a roadmap, the SHP Retirement Road Map for our clients, we look at income, investments, taxes, health care, and legacy in one plan, in one portfolio as opposed to just having a portfolio. So, as you listen, and we go into each area map, I think everyone should be thinking, do I have that? Am I that person that Matt mentioned earlier that just meets with my advisor once a year? It might be a small firm, which is okay, nothing wrong with it, and just saying, in today’s day and age, if you’re paying a fee to have someone manage your portfolio, in my opinion, you deserve a lot more, right? A lot more. And I think a true color of an advisor is, yes, they’re getting paid to manage your portfolio, but how many other things are they doing that they don’t necessarily get paid for? Does that make sense?
Matthew Peck: Absolutely. And that’s what I kind of wanted. Even before we started to talk about those different worlds, I kind of want to take the time to expand on this a little bit. I mean, here’s my point is that I’m kind of talking to the people, as you were saying, the people that have advisors right now and/or the do-it-yourselfers because for the people that have advisors, there’s nothing wrong with, as you were saying, having an investment committee or paying the fees to have high-quality portfolio construction with an investment committee that’s monitoring the markets 24/7 is extremely valuable and worth the fee. I mean, some fees are way too high, but worth a fee to pay because we are professionals that are doing this and you need professional help, right?
That being said, as we’re saying, it’s like, that’s the portfolio that’s just one small slice of the pie. And if you are paying a fee, then it’s sort of doing a disservice because let’s just say, personally speaking, Derek, it’s like the client comes in. If I don’t know their cash flow and their income planning or whatever that may be, how am I supposed to give them good advice on their portfolio, right? If I don’t know their health care situation, same idea, if I don’t know their tax situation of whether it’s IRA money, not IRA money, are we doing Roth conversions, so forth and so on? And same idea, legacy planning, because let’s just say a client comes in, and legacy isn’t important, then I may be more conservative with that client so they can spend all their money, or vice versa, let’s say they really want to leave as much behind, well, in that situation, I might end up being more aggressive because they want to grow the nest egg, not just dwindle it down.
So, you could just see even in that one area, you need to know how the entire picture of the entire plan looks to get good advice. And now, let me just speak a little bit to the do-it-yourselfers because some of them, and I think everyone in this room, I can’t speak for Evan, we’re cheap bastards, pardon my French, I’m not sure if I can get that, I know that we’ll be bleeped in certain areas, but I say that because we wouldn’t be where we are if we didn’t pay attention to make sure that we’re not paying fees that are sort of egregious and unnecessary.
Derek Gregoire: Correct.
Matthew Peck: And if we could do it, we’re starting our own business because we thought we could do it better. And so far, so good, right? So, I don’t blame when people just say, well, hey, I like the market and I want to follow it and I’m going to save myself that fee because I enjoy doing this. But yes, you might have just saved yourself a fee in that one little area, but who’s doing the income planning? Who’s doing the tax planning for you? Who’s doing the health care planning? Who’s doing the legacy planning? So, it’s like in that situation, you’re being penny-wise and pound-foolish.
Derek Gregoire: Well, I think we’ve been doing this for almost 20– we started the firm in ‘03.
Matthew Peck: Yeah.
Derek Gregoire: Right. And I couldn’t do everything we do by myself, right? Like, I’m…
Matthew Peck: For everyone, he did have difficulty giving some stuff up, just for the record, but keep on going.
Derek Gregoire: But honestly, like we have a great portfolio team. I’m not a portfolio manager. I know enough, I know everything about it, but when I’m building plans and meeting with my clients, I’m relying on our portfolio team because they’re doing all the research. If I was doing the portfolios and then going to meet with a client and then back to managing portfolio, like how do you do all that? And so, I think, and again, you know us, this is not like, hey, look how good we are. It’s not about that at all. But we’ve gone and helped other firms, like try to grow their business. And we’re going through all the stuff we do because we like to have a ripple effect only on our clients, but we feel like if we can share with other advisors across the country how to build a full practice financial planning firm, it’s only going to help that many more people because now, we know the people that they’re working with are getting this full holistic advice.
I remember one time we were doing that, and someone looked at me and said, that is way too much work. Like how? And I’m like, dude, for my friend, I’m like, that’s your job is to maximize your time. And so, I think people think of it as that’s way too much work. And honestly, 15 years ago, we didn’t have the capability of doing either. But think about like, we’re going to get into a little bit more of like as how could you and I met, just you and I be able to do all the stuff? How can we coordinate Medicare, Medicare supplements, long-term care, estate planning, trust if we need that, irrevocable life insurance trust, irrevocable trust, when to do Roth conversions? When to not? What tax brackets are we in? Looking at marginal tax rates versus, there’s like 4,000 things when building a plan, and we can’t do it all.
So, if someone’s on their own trying to do everything, that’s a big, big, big ask. And I think when people say, well, how have you grown so much over the years? What’s your key to success? Obviously, hard work, right? Doing, trying to give more value than we think can be the most value we can give among all areas of retirement, and then mainly having what I think is the most amazing team behind us to help us do what we say we’re going to do, and that’s executing on all these areas, not only in the beginning but think of like all the planning that goes on throughout the year, right? And as tax codes change, our planning team is like, you know what, folks? You know what, to our advisors, hey, here’s an opportunity we think we can utilize for our clients. And now, as we’re doing our reviews, hey, Mr., Mrs. Jones, here’s what we should be thinking about for this year based on the laws and so forth. So, it’s an ongoing planning process.
Matthew Peck: Well, and let me also kind of give an example as we sort of dive into that about initially, our discovery meetings, whatever you want to call them, with someone that comes in, how it’s different from sort of just a portfolio-style firm, where our portfolio-style firm, as I mentioned, they’re asking about risk tolerance and then they get into this ETF of that, ETF and whatnot, right? And certainly, we do that, but at the same time, when someone comes into our office, whether it’s in Plymouth or Woburn or Braintree, Hyannis, wherever that may be, we certainly ask again those portfolio questions, but we spend a lot of time on spending.
Let’s dive into that piece of the pie. So, it’s like, okay, show us your Social Security statements, your pension amount. Do you have survivorship on your pension? What’s your spending? What’s your debt? How much is your mortgage worth right now? What’s the interest rate that you’re paying on your mortgage? Do we have any type of credit card debt, student loan debt, all of those different aspects of your income? And what’s the cost of your lifestyle now versus the future and things along those lines? And so, it’s a deep dive into just that one slice of the pie, which is as you start to generate an income plan, the exploratory of that discovery meeting, those are the types of questions we’re asking. Same idea on the tax planning, we’re asking things, like okay, as an IRA or 401(k), are there any Roth IRAs within their after-tax dollars? What’s the cost basis or if there are any future capital gains that are going to be paid there? Rental properties, is there depreciation that have gone there? So, I mean, again, all this deep, deep dive. And now, I’m just on the tax planning session, right?
And then into the health care, asking about their current coverage versus future coverage. Do they have coverage through work? How is their health? How is their longevity? Like we talk about their parents, and did their parents ever need any type of long-term care? And how familiar are they with the Medicaid and the MassHealth, here in Massachusetts, the MassHealth system and look back periods and everything else along those lines? And then, we’re asking about their legacy planning. Do they have an estate plan? Do they have a trust? Is the trust funded? We run into that a lot where it’s like, yeah, I have a trust, but there’s nothing in it. And Attorney McManus and Carville say it’s like, having a trust with nothing in, it’s like having a car with no gas in it.
Derek Gregoire: Yeah.
Matthew Peck: And we see that all the time, right? So, as I said, I really want to kind of compare and contrast because if you go with a portfolio-style firm, they’ll just ask all about stocks, bonds, mutual funds, and risk tolerance as compared to us, where we’re asking deep and good questions about all the five areas so that when we start to develop a plan, we’re addressing all of those areas so you have an overarching plan, not just one highly focused, but just one little area.
Derek Gregoire: And I hope that makes sense too of like why some people will call, well, how come I don’t qualify? Or how come you guys have minimums? Like meaning, minimum asset, right? And as you can see, like it’s a lot of work to do. And our fees range, once you have $500,000 or more, our fees are 1% and they go all the way down to like 0.3% or 0.4% as you have more money. So, we’re not charging, and we’re not subbing it out, we’re doing everything internally. So, the fees are very reasonable, if not probably too cheap, what we’ve been told. But for that fee, there’s so much work to be done. Yeah, if we were just managing a portfolio and didn’t do anything else, yeah, if you had a certain amount of assets, it’s fine. But that’s why we have certain minimums, that’s why certain advisors don’t take on certain clients because what we specialize in is trying to provide maximum value beyond just a portfolio. And I think if we just did that, let’s say we take on everyone, right? And we charge 1% or less and we lose money on some clients because of just the amount of work that goes in. So, the last thing we want to do is we want to help as many people as we can, but you made a good point, Matt, we’re not all things to all people, but we’re, what’s the word? It’s like…
Matthew Peck: We’re all things to some people.
Derek Gregoire: There we go, all things to some people. I knew I was going to mess it up. So, if certain folks, they’re like, I think if the way I look at it, Matt, is that when I think of someone listening to this show, if it’s like me, and the way I think, not everyone thinks like me, thankfully, not everyone thinks like me, but I’m like a type A, like OCD personality where it’s hard for me to enjoy something until I know my work is done. Meaning like, let’s say, my family is going away or something, well, I can’t leave a bunch of things on my to-do list at home, I have to make sure it’s all done, then I can enjoy it.
And so, I think of myself like a million years down the road, retired. I can’t imagine, like if I was on vacation, and I’m thinking, like, money is, by all means, nothing in terms of the overall picture of life. But it helps in terms of traveling and all the things you want to do. And so, if I’m sitting there on a beach somewhere and I’m like, my portfolio is doing good, but it would bother me to know that I did not plan for everything, like, wait, is anyone looking at my tax bracket? Is anyone advising me based on where my taxes are? Am I missing opportunities? I can’t enjoy this trip. I have to go fix this, right? So, I think that leads to how we all kind of think alike, and that’s when we’re working with our clients. And we’ve been doing this for almost 20 years. It’s like, we want to make sure there’s no stone left uncovered if we can find an opportunity to improve that situation, right? Maybe it’s a tweak in the portfolio. Maybe it’s a tweak in the cash flow. Maybe it’s a tweak in tax strategy or a new strategy around estate planning or how to get a cheaper prescription. Any detail we can find is what we’re trying to do. So, I think that’s what our clients, what they use this for, not use this for, but why they work with our families, why the families who work with us is like they know that we don’t have to worry about this stuff. Everything from income, investments, taxes, health care, estate planning is being monitored so they can go enjoy their retirement.
Matthew Peck: Well, and let me sort of continue the thread of like, alright, so that’s the first meeting I was talking about. And okay, how does a plan then continue to get developed, and then what’s the result, right? Well, the second and the third meeting are really diving into, okay, now that you told us, here’s your cash flow, and here’s the money coming in and coming out, right? Okay, now that you told us what your risk tolerance was and you only want to lose 10%, but we do a risk analysis and it shows that you have a risk of up to 20% loss, whatever that may be. So, it’s almost like the second or third meeting is (A) showing people where they are based on where they thought they were. As I always love it, it’s like, oh, I’m conservative, and it’s like, oh, that’s funny, your investments are exactly…
Derek Gregoire: You’re telling us something different.
Matthew Peck: Yeah, right, exactly. So, it’s letting you know that, and then beginning to put together a combination of a portfolio or in a tax plan and kind of working with the CPAs and attorneys that we work with to begin to circle the wagons so that now, and then make recommendations to the investment mix to then meet those particular goals, whether they’re the income goals or the tax planning goals like, for example, and this isn’t across the board, but generally speaking, when we do a Roth conversion, we like to have the Roth funds a lot more aggressive than the income funds, right? And I share that one example too, Derek, because what I love about when people are done with that process because it does take three, four, or even sometimes five meetings that they know why they’re invested the way they are, not just what they’re invested.
Because of course, we could talk about annuities and stocks and bonds and mutual funds and ETFs, and now they know what they’re invested in as everyone should, hopefully, but now they know why they’re invested, they know why that, oh, this account is super conservative because that’s my income account. Oh, and this account is a lot more aggressive because that’s my long-term or my growth account, or anywhere in between so that when the markets drop or go up, you say, oh, Derek, why did this account only go up 3%? And I go, well, that was your conservative account for income. Oh, right. Oh, why does account just drop so much? Like, oh, that’s your kid’s account. Yes, it’s yours, but remember, that’s more of your legacy account. So, now people know that okay, as the markets move, they say, oh, okay, that’s why that moved a lot or a little because now there’s a goal attached to that and…
Derek Gregoire: There’s a purpose.
Matthew Peck: Exactly. So, it goes back to the P’s we have at the beginning. It’s like, honestly. I think that’s the biggest difference between a portfolio and a plan is that you know the why to your portfolio. When you just have a portfolio, that’s all you have, there’s no why. You have the what, but not the why. And so, that’s what I love about the planning process is that once you’re done with the initial one, and it’s a constant one, as you were saying, we still go back to it and everything else. Again, knowing what the why you’re invested that way, that’s when you know you have a plan.
Derek Gregoire: And that’s good, excellent points here, and I think it’s good to let people know what we’re known for, and we’re known for looking at all areas of retirement. We’re known for building a full plan that’s analyzed ongoing. And I don’t know, I promise you, we did not have this like 20 P’s conversation before, but honestly, as I’m thinking about it, we have Plan vs. Portfolio. That’s the type of show. The process that we have is what I think makes us different. And one of the other things that I wanted to use is the portal.
Matthew Peck: Yeah, absolutely.
Derek Gregoire: And again, I promise that was not set up beforehand.
Matthew Peck: Yeah, honestly, we don’t really script that this much,
Derek Gregoire: But the portal is another P that’s important because the client portal, clients go to our website, they go to our portal, and it sounds pretty simple, but to me, it’s like clients love it and it’s one spot where it tracks all their accounts. It’s a picture of one spot where all your accounts are tracked every day. So, whether you have it’s Fidelity, whether it’s in the bank, wherever it is, you have a list you can go on every day.
It’s updated through technology, it’s secure, and every day you can go on and see your living, breathing, all your assets, your investable assets, your net worth. If you have mortgages, you can print a net worth statement in two seconds. So, every client has that, all their accounts tied together. Then inside the portal, all the things that anything they want to see, like if they want to see where their income is coming from, how are they doing? How is their plan progressing? And so, they can go on and see their cash flow. They can see, “All right. Well, here’s my Social Security coming in every year. Here’s my pension. Here’s my rental income. Oh, my expenses are 30,000 more. Oh, wait. That’s where I’m pulling from out of the portfolio to cover the expenses.” And it projects, my gosh, where you’re going to be year by year. We show conservative projections so that they can see, “Okay. How am I going to be in 10 years, 15 years, 20 years?” And by the way, if I want to buy a house, if I want to do this, how does that change things? So, it’s all ongoing advising and everything in this portal has all their documents.
So, when we’re doing your review, all the performance statements, anything around that we’re doing is saved there. Their legal docs, their trust documents are all saved there. So, everything within their plan is they have one place they can go to, to track all this information. And it sounds like a lot but when you have that and you can go on any day, any time and just say, “Okay. Where am I at? How’s my plan look?” I think the key thing, I don’t care. If it’s not with us, again, we’re selective on who we work with. We just want to make, and you should be as well, we just want to make sure this whole show, podcast, whatever you want to call it is dedicated to making sure that as you sit and listen right now, do you have a plan or do you have a portfolio? Are you just looking at a bunch of numbers and you have a 401(k) or something? Or do you have a great portfolio but also income plan, tax plan, health care plan, estate plan, all combined under one roof, if that makes sense? So, Matt, anything I left? I think we can kind of get into some other details. I know we’ve been going on for quite a bit here but I don’t want to hit people over the head with plan versus portfolio, but I think that’s – and I can give you a kind of final.
Matthew Peck: Well, the only thing to offer and sorry that just mixed in a little bit. I just wanted to give one example only because it does kind of tie together the portal and it ties together the fact of like health care taxes and portfolio.
Derek Gregoire: Yes.
Matthew Peck: So, I got just one example for you only because I met them the other day.
Derek Gregoire: Personal. Good idea.
Matthew Peck: Yeah. So, this is Bob and Linda, and they live in Massachusetts but they have a home in Florida. So, here they are. They’re doing the snowbird thing where they’re up here for six months out of the year, down in Florida for another six months out of the year. So, now we have the importance of the portal, which is, okay, whether they’re in Florida or Massachusetts, they can go online and they can see everything at their fingertips. Now, let me talk about how their health care plan is impacting their tax plan. So, Bob right now is taking a certain medication that costs a lot of money but he is qualifying for a sort of a discount based on his income. Unfortunately, he’s reaching a level, he’s going to be turning 72 next year, and Linda’s younger but Bob’s turning 72 next year. And so, now he’s like, “Okay, Matt, I’m getting my RMDs. What should I do about my required minimum distributions? Because now they’re going to push me over a level where now I’m no longer going to be impacted by – I might be paying full price now for this prescription drug.”
And so, what we do within our planning process is that we’re looking at a couple of different what-if scenarios like, okay, what if he has to take his RMD? And, okay, what’s the impact now on his health care budget and on the overall plan itself? Or, okay, what if we look into things like qualified charitable contributions where you can actually take your IRA RMD and just push it straight to a charity thereby erasing or eliminating the RMD? So, good for charity, good for health care, but they have kids so not exactly good for legacy, right? So, our entire conversation was not about, “Oh, what stock or bond to buy in?” It was like, “Okay. Let me look at how the increase in your income affects your taxes, which affects your health care costs, which might be coming back to affect your budget, and so forth and so on.”
Derek Gregoire: There’s so much detail into planning.
Matthew Peck: And right there that’s when, as I’m working with Bob and Linda, that’s an example of looking at all five areas of the plan, not just if I’m just looking at the portfolio, I’d be looking at them like a deer in headlights, like, “Well, that’s a good question.” It’s like no. Because they’d gone through the process, we were able to really help give them not say solutions but just options as to what’s the best way forward.
Derek Gregoire: Now, Bob and Linda, when they make the decision, they’re not going to guess, “Was that the best decision?” They’re going to know, “Hey, we looked at all the options. We looked at this, that, and we saw the impact of each decision. Now, we have all the information to make the best decision for us,” and that’s what’s most important. That’s all part of planning. And so, I think I’ll close this. We’re just talking about I wrote a few things down around the SHP Retirement Road Map process and what kind of we’re known for. It sounds a little cliche but it’s important. There’s kind of three steps, charting your path, securing your future, and living your dream for retirement. So, we’re charting your path. That’s really just looking at all the pieces in the financial world discovering what it is you truly want. What are your goals in life beyond just, “Hey, I want to have enough to survive?” That’s not enough. I mean, what are your overall goals? And then building the retirement roadmap to get you there through income, investments, taxes, health care legacy, ongoing, right? And the goal is to take each person from confusion to clarity to be more clear on your plan than you’ve been in the past.
Then we secure your future, which is the second step which allows access to our specialized team, building the holistic approach on your behalf. And we talked about earlier with my OCD, a high-quality, holistic financial plan that leaves no stone left unturned, right? And that’s going from worrying like, remember, I talked about being on that beach worrying, “Hey, am I missing anything?” to being confident to know that we want our clients to know that no stone is left unturned. We have a plan we’re taking care of. And the third part is living your dream and that’s committing to – we always tell our clients and, again, whether it’s us or any other firm, we’re always going to show up for you. We want to help you live the life you deserve and that you’ve worked so hard for. And then finally, we want to amplify your impact on your family and the causes you care most about. So, it’s like, we don’t want you just to live. We want you just to survive. We want you to be creating. And what is it you want to do? What’s the impact you want to leave and challenge you to do that. So, to me, hopefully, that just shows you the main difference between an overall plan and portfolio. So, Matt, thanks for your help on that. Really appreciate it.
Matthew Peck: Absolutely.
No statements made during the Retirement Road Map® podcast shall constitute tax, legal, or accounting advice. You should consult your own legal or tax professional on any such matters. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk, and unless otherwise stated are not guaranteed. Our Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. Our advisors and insurance reps may offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.