The Why Behind Data Gathering
Data Gathering is an essential part of financial planning. We believe data gathering is the starting point for financial planning.
“Winging it” is not productive. A firm grasp of your numbers is essential, prior to retirement.
The Why Behind Data Gathering – Links
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Transcript for The Why Behind Data Gathering
When we get started with a new client, we spend a lot of time in data gathering.
That’s getting to know you and your situation.
It’s what we call data gathering.
So we want to see the tax returns.
We want to see your pay stubs.
We want the Social Security statement from Social Security.
We want to see 401k statements, bank balances, investment accounts.
It’s personal!
Then we start to dig into what your monthly expenses look like.
We really want to understand all the math behind your situation.
So we really do get to know you.
We’ve had some people over the years who have balked at the process, saying, “Hey, my current investment guy never asked for this stuff.”
At Mullooly Asset, that’s not how we do it.
The planning work we do drives how your assets get invested.
So when people balk at the data that we’re asking for, we just tell them straight up, “We’re not going to be able to work together.”
We do this data gathering because we want to understand where you’re coming from….. and where you’re headed to.
Then we share what we’ve learned and ask you to approve the math….. before we even sit down and talk about any of this stuff.
You know, for example, do the fixed expenses look right?
Do the discretionary expenses look right?
We do all of this math during data gathering — because one of our main roles is to figure out how we’re going to replace your paycheck when you retire.
So we need to determine where the money’s coming from and where it’s going.
And then how to invest the assets properly moving forward.
Because what got you here….. may not get you there.
The reason why we talk about data gathering so much, there was an excellent piece, research piece, put out by Vanguard in June 2026, “How to Turn Retirement Savings Into Reliable Income.”
This was based on a much longer report that Vanguard also put out at the same time.
We’ll link to both of these reports in the show notes.
It’s worth going through them.
In our business, the name of the game is generating income in retirement.
Unfortunately, people get scared into thinking that they might run out of money in retirement.
And a lot of times they wind up getting sold an annuity.
Now look, an annuity may be right for some people.
But it’s an insurance product.
It’s not an investment.
When you’re measuring annuities against investments, just understand….. that there’s far more efficient ways to invest than going through an annuity.
But this notion, generating income in retirement, is the SEED behind why so many annuities are getting sold, year after year.
The challenge isn’t simply saving enough money for retirement.
It’s whether that savings can provide a reliable income tailored for you….. and for your situation.
We’ve been at this now for decades, and we can clearly state no two retirements look the same.
Everyone’s got a different set of circumstances.
So despite what you might read online, there is no “cookie-cutter” approach to planning your retirement.
One of the authors of the Vanguard piece, Joel Dickson, summarized this pretty well.
He said, “This is about helping people understand the decisions that matter most and giving them a clearer way to think about the trade-offs behind those decisions……”
We spend a lot of time talking about portfolio withdrawal rates.
We talk about tax planning.
Should you be considering a Roth conversion?
What does the math look like that?
What’s the investment strategy?
How are we going to align the assets – to manage a few things like the cash withdrawals that are going to be needed over the next few years, and also managing the investments to keep ahead of inflation as well?
When we talk about portfolio withdrawal rates, it seems to be a concept that some people tend to overlook.
So they’ve got all of their expenses, and then they’ve got income, like say Social Security, maybe something else, that they’ve got….. another source of income.
But the difference between those two numbers is really what’s going to need to come out of your investments.
That’s the portfolio withdrawal rate.
Now, we work with some clients where their portfolio withdrawal rate is 1%, 2%…..
Really good numbers.
They don’t have much risk of running out of (money during) retirement.
We’ve also met some people who have portfolio withdrawal rates of 11%.
Some people get hung up, they come in to see us and they say,
“I’ve read that I need $2.6 million to retire…..”
Or, “I need $3.4 million to retire…….”
We try to change that conversation and not focus so much on the asset values.
But focus on the income that can be generated for your retirement.
Because what happens is, without understanding your numbers….. without going through data gathering….. without understanding the math….. without a defined plan……
People tend to either do one of two things:
They either spend too little – and they live like paupers.
Or, they spend MORE than they should.
With at least a plan….. and understanding your expenses, you’ll gain a better view of how much you need to withdraw over time, how long your assets may need to last, and how different risks might affect different outcomes.
It’s important.
Now, markets have been pretty good for the last few years.
What happens if someone is withdrawing 10% or 11% a year….. and then we run into a year where we lose 20% in the market?
It’s scary.
One of the additional steps that we take, as we begin working with a new client, is to “stress test” their plan.
Does the projected withdrawal rate MATCH what the expenses are going to look like in the future?
To learn more about stress testing your plan, watch this video next…..
(thank you for watching “The WHY Behind Data Gathering”)
