Making Things Too Simple??
Albert Einstein is noted for many things including the quote, “Everything should be made as simple as possible, but not simpler.” Financial planning is no different, but it appears that many people have unrealistic expectations relative to the possibility of reduced complexity. A recent survey from Charles Schwab found that 56% of Americans stated: “they’d like creating a financial plan to be at least as easy as booking a hotel room.”
Software developments over the past decades have surely made it easier to complete both tasks. However, it’s a bit of a stretch to think that the work involved in making provisions for having a roof over your head for perhaps five days, could be compared to visualizing and developing a plan to fund all aspects of your life for a period that could exceed thirty years. When one considers that multiple types of insurance, investments, federal and state income taxes, Medicare planning, Social Security, long term care and estate planning form just the core of a good financial plan, the very fact that a majority of survey respondents even believe this to be possible is incredible! It’s been noted that the average American invests far more time in planning their two-week vacations than their thirty-year retirements and now it’s easy to see why.
Now, if only Uncle Sam would take heed of this cry for simplicity as it relates to the byzantine U.S. Federal Income Tax Code………