Smart, well-intentioned investors may harm their financial futures when they delay money matters. Tomorrow seems like a great day for difficult things. If it’s not fun, if we lack the proper skills or if the task takes us back to previous painful mistakes, tomorrow usually seems best.
When outsourcing professional services, procrastination can be especially costly. For many of us, it is painful to pay someone for a service that we believe we can do ourselves. It just seems like a matter of finding the time to brush up on the subject and then get it done.
For example, a retired investor once determined that he was an excellent candidate for a Roth IRA conversion. If he converted after his high-tax-bracket years, but before age 70 ½, he could save many thousands of dollars in income taxes. He just needed to figure out the nuts and bolts of the process and then do it. The tax code was confusing. The articles he read were vague. He hated the idea of paying to have a professional take the job off his hands. Springtime and the joys of life beckoned and he put it off. The years passed. It just didn’t happen. To this day, the word Roth conjures up regrets for him.
Roth conversions are just one example of the downside of procrastination. Portfolio re-balancing, harvesting capital losses, shopping for better mutual funds, maximizing employer matches, choosing pre-tax healthcare plans, life insurance reviews, college savings programs and dealing with low-rate-of-return savings accounts are also examples. Most powerful, however, is the time value of money. When money goes to work for you now, versus later, there can be a dramatic increase in total return. A finely-tuned financial fitness program can make a significant difference in your financial health. Every day that the tune-up gets put off translates into lost dollar opportunities that can never be recaptured.
Are you deferring important financial actions? That’s exactly where Guidepost Financial Planning can help. Please visit our website or give us a call at 970.419.8212 so that we can discuss your financial goals in a no-charge, no-obligation initial meeting.
This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products. Please consult your tax or investment advisor for specific advice.