Berno Financial Management

Procter & Gamble Specialization

I accepted a P&G Retirement Package. Now what do I do?

How a Cash Flow based Personal Financial Plan can provide Financial Peace of Mind.

Start with a personal financial plan for your life. What should it include? Should you do it yourself or hire a professional advisor? Unlike corporate life, your personal life plan should include lifestyle and financial components. The first will affect the second and vice versa. Lifestyle components could be the subject of their own paper, so we will focus on them briefly in order to focus on the financial components.

Everyday is Saturday

The biggest lifestyle component is your time. What do you want to do now that "every day is a Saturday"? Many of these personal lifestyle issues were addressed in the P&G Recess Program. Make a list of the hobbies and interests you want to purse. Think about any volunteer work that would be rewarding. Or is part-time work in the picture, either related to your professional skills or other interests? Lifestyle plans may be influenced by family and friends, geography and climate. Were do you want to live? Is it time to downsize your home? Is a second home or resort property on the horizon?

What is a financial plan and why do I need one?

Why do you need a financial plan? Isn't the big question how to manage your investments, including how to determine an appropriate asset allocation, how to determine your risk tolerance, how to estimate an expected rate of return and how to do it, yourself or hire an investment manager. We will answer that with an infamous quote, "My portfolio beat the S&P 500, but I ran out of money."

Let's examine this issue further by asking the question, "What is the purpose of an investment portfolio?" Fundamentally, our belief is that the purpose of an investment portfolio is to ultimately generate cash and convert it to cash for spending and, hopefully or ideally, to leave an inheritance. So in order to design an investment portfolio, we have to know what the personal goals are and what the cash flows associated with those goals are. Then we decide how to generate the cash in a reasonable manner and with a high probability of not outliving your money. 

I don't want to outlive my money

A good financial plan is more than just investments and is the management process for answering your questions. Together, we will answer many questions. What are your base living expenses? How will your daily living expenses change in retirement? Have you identified periodic, extraordinary expenses like car replacements, home maintenance or improvements, weddings or extra travel? Should you have long-term care insurance to protect against the cost of professional home care, assisted living care or nursing home care later in life? Is your P&G retirement plan beneficiary consistent with your estate plan? Do you have a primary and secondary beneficiary? Do you need a trust?

How do you diversify your investments? How much P&G stock do you want to continue to own? What is your strategy for exercising P&G stock options? Will the Retirement Plus investment options suit your needs? Do you want to reduce your P&G to less than the 40% minimum required with the Retirement Plus options?

As you can see, there are many questions to answer; not just today, but as you continue to live your retirement dream the world continues to change, meaning both the questions and your answers will change over time. Who is going to help with these questions?

Let's learn how to answer these questions in the format of a case study. We will highlight how Berno Financial Management, Inc. can help a P&G retiree identify their goals and concerns and implement a sound long-term financial plan.

How and When Do I Get Help

One important question to ask is do you do it yourself or hire a financial planner? Most people only retire once and they have never faced these issues before. Therefore, they don't have the education or experience to make major financial decisions. While they may have the time in retirement, they prefer to spend it on rewarding personal activities and not on managing their investments and monitoring their financial plan.

All of us have to make decisions about what types of services we do ourselves and what we hire professionals to do. Sometimes these decisions are simple. Do you change your own oil or go to a quick lube shop? Do you mow your own grass or hire a lawn service? Sometimes these decisions are more complicated. Do you prepare your own income tax return or use a professional tax preparer? Do you design your own house using floor plans off of a web site and contract out the work or hire an architect and general contractor? Do you diagnose your own medical ailments or see a doctor? Ultimately, the question is do you have the time, experience, expertise and resources to do the job successfully? Planning for Financial Peace of Mind involves many variables and can become both confusing and time consuming. Berno Financial Management creates a customized financial plan for your future.

How will you best achieve financial peace of mind?

To learn more about how Berno Financial Management can help you achieve financial peace of mind, contact us for a free, no obligation copy of our Personal Financial Assessment for Procter & Gamble Employees and Retirees.