7 Questions For Millennial Financial Success


Investing, planning for retirement, and generally ‘getting your financial house in order’ can be confusing and even intimidating for young families and individuals— in truth, it can be confusing and intimidating for all families and individuals regardless of age. There are seven key questions you can ask yourself today to assess your current financial house. Hopefully, by spending a few minutes reading this article you will feel armed with the tools and confidence to lay the foundation for your financial house and get started on any areas that are lacking. Every great house starts with a strong foundation – worry about the details of each room later.

What does my company match in my retirement plan?

Ideally, all of us are taking full advantage of any company match offered. Most companies, but not all, provide some sort of match. Unfortunately, there are probably some people reading this right now that aren’t maxing out the match. If that’s you, take a moment to ask yourself why?

The company match varies with each company, but for the purpose of this article let’s assume your company matches dollar for dollar on the first 3% that you contribute and 50 cents on the dollar for the next 2% that you contribute – this equates to contributing 5% to get a 4% match. Many plans use this formula. It’s basically going to an ATM, asking for $100 and the ATM gives you an additional $80 without it coming out of your bank account. Unless there are other very pressing financial needs, everyone should absolutely take full advantage of the company match, in this case contributing the 5% to get the 4% match.

Don’t leave money on the table – free money! In reality, the match comes out of your employer’s pocket, so it’s not entirely free.

However, for you, the employee, it’s probably the closest thing to free money that you’ll find, and it’s also a raise. So, max the match, take your raise, and tell your employer you appreciate their generosity.

Will maxing the match successfully fund my retirement dreams?

Realize that contributing the minimum amount to max the match might not fully fund your retirement dreams, in fact it probably will not. A study done by the Center for Retirement Research at Boston College calculated that an average saving rate of 15% of income throughout one’s career would be sufficient to achieve retirement income targets. It’s likely that by merely contributing enough to max the match that you are not hitting that 15% target. (Disclaimer: 15% may not apply to everyone, but for the purposes of a big audience it’s an acceptable assumption).

Your retirement years should be the longest and best vacation of your life. Spend a little time each year to think about it and plan. The National Retirement Risk Index predicts that roughly half of today’s working families are “at risk” of not being able to maintain their standard of living in retirement – don’t let this be you. If you’re not ready to make a big jump, here’s a way to ease into it: increase your contribution by 1% each year – I doubt you’ll miss that 1%, and it will make a big difference in the long run.

Retirement may seem like it’s light years away, but the future has a tendency to sneak up on us. Although we haven’t touched on taxes at all here, keep in mind that there are tax benefits for contributing to a company retirement plan.

How are my investments allocated?

Generally speaking, when conversation turns to investments people get excited talking about things like high-upside mutual funds, a new Exchanged Traded Fund (ETF), an individual stock that’s about to break through, getting in or out of the market at the right time, etc. But what is most important and what really drives your investment returns is something far less sexy: it’s your asset allocation. Let’s slow down a second and think about the basics, the foundation.

Say that your investment foundation is your asset allocation, meaning the mix of different asset classes in your portfolio (domestic stocks, international stocks, energy, real estate, fixed income, etc.). A recent study by the CFA Institute found that 91.5% of a portfolio’s return is attributable to its mix of asset classes. This same study revealed that individual stock selection and market timing accounted for less than 7% of a diversified portfolio’s return. This is why I encourage you to start with and focus on asset allocation, the foundation, and pick an allocation that you feel comfortable with, knowing that the greater equity exposure you have, the greater amount of risk you’re taking on, and stick with it.

Too many people focus on the individual investments within an allocation – i.e. picking Coke or Pepsi stock – rather than putting together a well-diversified portfolio. Additionally, picking individual stocks and attempting to time the markets naturally pushes us towards making an emotional decision because we want to be right – it’s human nature. Emotional decisions (selling at a market low, or buying at a market high) can negatively impact a portfolio’s return far greater than picking Coke when you should’ve picked Pepsi. Through a systematic asset allocation approach you will remove a portion of the human element and decrease the likelihood of a costly emotional decision.

How much life insurance do I need?

First, a few statistics that may jump out at you from Life Health Pro:

  • 40% of Americans who have life insurance coverage don’t think they have enough.
  • 40% of U.S. households with children under age 18 say they would immediately have trouble meeting everyday living expenses if a primary wage-earner were to die today.
  • 83% of consumers say they don’t purchase more life insurance because it’s too expensive, but consumers believe life insurance costs nearly three times the actual price.

Life insurance typically isn’t high on the priority list, and I understand why – it deals with death and it doesn’t benefit you. I’m not here to convince everyone to run out and get life insurance, but if you have people that depend on you it’s important, for them, that you get life insurance.

There are plenty of ‘rules of thumb’ out there, for example have 10-times your salary, have enough to cover your debt, etc. Those are starting points, but an easy solution is to take twenty minutes and actually think through what you would want your loved ones to receive if something happened to you (would you want to pay off your house, your children’s college education, student loans, provide an income to your spouse). The key here is to know that term life insurance is relatively inexpensive for younger people and is becoming easier to acquire.


Do I have legal documents in place? If so, what do they say?

Whether you have a family or not, getting legal documents (Will, Trust, Health Care Surrogate, etc.) in place as your personal wealth grows is a good idea. However, if you have a family, it’s a must. There will be an investment of time and money on your part, but it will be time and money well spent for the peace of mind that you’re appropriately looking after your loved ones. Think through who you would want to raise your children, watch over their assets, and consult with an estate planning attorney to put the required documents into place.

If you already have legal documents in place, then it may be time to review them. Life changes, and it is important that your legal documents and beneficiary designations stay current.

How will my children pay for college?

You may want to cover some, none, or all of your children’s college education. The earlier you start, the easier it will be. Here is a quick breakdown of a few options:

  • 529 Plan
    Pros: tax benefits, transferrable to siblings or cousins, investment upside, accepted by all colleges
    Cons: tax penalties if not used for college, may not cover all expenses, investment downside


  • Florida Prepaid
    Pros: guaranteed to cover all costs for purchased plan at eligible schools, several different plans offered, transferrable to siblings or cousins
    Cons: may not cover all costs at out of state schools, opportunity cost if child doesn’t attend college (only get your money back)


  • UTMA/UGMA Account
    Pros: investment upside, minor tax benefits, can be used for items other than college
    Cons: it legally becomes the child’s possession when they reach the age of majority (18 in FL), may not cover all expenses, investment downside


  • Investment Account Earmarked for Child
    Pros: no strings attached, flexibility, investment upside
    Cons: you might spend it on something else, no tax benefits, investment downside

What do I do with all this debt?

Unfortunately, debt is a very real part of life. Hopefully, those of us that have debt are using it as a tool to invest in ourselves (education) or to help establish our lives (home, car, etc.), and not as a toy (consumer debt). Regardless of how large a factor debt is in your life, it’s good to have a strategy for eliminating debt. Here’s a basic checklist:

  • Rank the debt from highest interest rate to lowest interest rate and eliminate the highest interest rate debt first, then continue down the list.
  • It’s not always advantageous to pay off debt ahead of time. Example: tax-deductiblemortgage interest at 4% vs. putting money into your 401(k) and effectively earning an 80% rate of return (5% contribution = 4% matching contribution) + investment returns that hopefully earn more than 4% on average.
  • Create a budget. This should help you eliminate debt, stay out of debt, achieve future financial goals and monitor where your dollars are going to ensure nothing is way out of whack.

Life is busy, and it is easy to let important financial matters slip. However, it is so important to prioritize the areas of your financial life that need extra work. Use these seven questions to assess where you find yourself currently. Then, set aside some time to sit down with an advisor or speak to the professionals who can help you with your needs. The feeling of checking items off of your list and knowing that the future of both you and your family are protected will help you feel confident that your financial house will be able to weather any storm that life sends your way.

Tim offers securities through Valmark Securities, Inc. (Member of FINRA/SIPC). He also offers advisory Services through Koss Olinger Consulting, LLC, an SEC Registered Investment Advisor. Valmark Securities, Inc. is separate from Koss Olinger Consulting. Contact:, 352.373.3337. Koss Olinger is located at 2700-A NW 43rd Street, Gainesville, FL 32606. The material contained in the herein is for informational purposes only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial situation or needs of individual investors. The information provided has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and does not purport to be a complete analysis of the material discussed, nor does it constitute an offer or a solicitation of an offer to buy any securities, products or services mentioned. The opinions expressed do not necessarily reflect those of author and are subject to change without notice.