From a financial point of view, an adult life has two phases: pre- and post-retirement, or saving and spending. During the saving phase it’s possible to make some course corrections. However, mistakes in the spending phase can do permanent damage to your finances.
If you’ve got a decade or more of work left, it’s possible to make up for low savings by saving more and reducing your investing costs. But if you spend too much in your first decade of retirement, you’re likely to end up with a much lower standard of living permanently.
While working, if you don’t like the plan your financial advisor has for you, you can find a new advisor and make up for past mistakes. But if your advisor puts you on a bad retirement spending plan, by the time you figure out there is a problem, there’s little you can do other than cut spending.
Imagine your 70-year old self finding the advisor you starting working with when you were 35. You say “the retirement spending plan you put me on is no good.” And he replies “get off my lawn,” because he’s retired too. For the most part, he doesn’t have to answer for the outcomes of the retirement spending plans he prepares for his clients.
Now most advisors are decent people who genuinely want to do well for their clients, but all the incentives push in the wrong direction. Retirement spending is a difficult topic and it’s hard to know what the right plan is. Often, advisors will be long gone before it becomes apparent whether their plans are any good. The pressure to earn a living drives advisors to find more clients instead of working hard on spending plans. And finally, clients themselves prefer advisors who tell them they can safely spend more money. This is not a formula for good outcomes.