Wealth Balance Update August 2026

Wealth and Balance

It is extremely common for people to leave significant sums of money on the table in the end. For a lot of people, this is intentional to some degree. Many with kids will express a desire to leave something to them. Almost everyone has some fear that their money won’t last; whether that fear is warranted or not. And I’ve known plenty of people that simply cannot bring themselves to spend the money they worked so hard to save.

We are trained from the first moment of our first job to save. We spend our working years earning income, saving what we can, and spending the rest to build our lives. Savings become consecrated ground. At some point they can move beyond being a source of security and become a source of pride; a measuring stick of how good of a job we have done.

When the time comes that we no longer need to work, or no longer can work, the process changes overnight. 40+ years of habit are thrown out of the window and we are now faced with spending these savings. This comes with a psychological toll.

The “Balance” in Wealth Balance is intended to highlight this, to bring it into the open, and to drive our conversations about it.

I’ve recently rebuilt the Retirement Ratio, the planning tool I use to help us plan for your retirement, from the ground up. One of my favorite new items is a small simple line that shows you if you have excess savings; savings that won’t be needed to meet your retirement expenses. Excess will mean something different to everyone that sees it. For some, I hope it will be inspiration to spend more of their money improving the quality of their retirement. For others, it will be an opportunity to talk about taking more risks to try and grow their assets for whomever will inherit the funds. And there will also be those for whom it won’t change a thing about how they look at their savings!

For everyone, I want these decisions to be 100% intentional.

That is the key word: intentional. This requires taking the time to seriously consider what you want for yourself and what you want your money to do for those that you want to have it when you are gone.

Earlier this summer I had a fascinating conversation with a humble, low-profile man that has built an enormous wealth. Once we separated the funds that he needs to sustain his retirement from the excess, the conversation focused on what to do with the notable excess. His plan has been to leave it all to his numerous nieces and nephews. Leaving a strong legacy to them has been one of his lifelong goals (and the story behind why was an amazing story), but he was very concerned that the money would have a negative impact on their lives. Throughout the conversation, he kept mentioning his charitable works. To me, those were as important to him as the inheritance goal, but that had not translated into his estate plan. I ended up suggesting that he consider leaving specific amounts to specific individuals, making that number intentional, and leaving the remainder to build a family foundation. These same nieces and nephews would become the trustees of the foundation, and would be empowered to do charitable works, but they wouldn’t be sitting on inheritances significant enough to negatively impact their own personal growth.

Separating what is needed for retirement security from the excess opens the door for some great conversations.

I am ready to have these conversations when you are.

Planning Topic of the Month: The Policies You Haven’t Read Since you Bought Them

Homeowner’s Insurance, Auto Insurance, and Umbrella policies need regular reviews.

If you are like me, you set up your homeowner’s, auto, and umbrella coverages years ago and have never look at it again. The premiums come out automatically, the declarations page gathers dust, and the assumption settles in that everything is handled.

The problem is that your life keeps changing while your policies stay frozen. The home you insured for $500,000 to rebuild may cost $650,000 to reconstruct. The teenager who wasn’t driving five years ago is now on your auto policy. The investment accounts you’ve spent decades building are now the exact assets a lawsuit could reach. A policy review isn’t busywork. It’s how you find the gap before the gap finds you.

Here’s what a review covers:

Homeowner’s: Are You Actually Covered to Rebuild?

The most common problem is underinsurance on the dwelling itself. Construction and labor costs have risen sharply, and a policy written years ago may not carry enough coverage to rebuild your home at today’s prices. Two features worth checking: replacement cost coverage (rather than actual cash value, which subtracts depreciation) and an extended or guaranteed replacement cost endorsement that provides a cushion above your stated limit if rebuilding runs over.

Beyond the coverage on the house itself, a few gaps show up again and again:

• Special limits on valuables. Standard policies cap coverage on jewelry, firearms, art, and collectibles, often at a few thousand dollars total. Meaningful items usually need to be scheduled on a separate rider.

• Water and sewer backup. Damage from a backed-up drain or sump pump failure is frequently excluded unless you’ve specifically added an endorsement.

• Flood and earthquake. Neither is covered by a standard homeowner’s policy. Flood requires a separate policy; earthquake requires an endorsement or standalone coverage.

• Liability limits. The liability portion of your homeowner’s policy is often set low. This is the foundation your umbrella policy (if you have one) sits on top of, so it needs to meet the minimum your umbrella policy requires.

Auto: The Limits That Protect Everything Else

Many auto policies are quietly running at or near state-minimum liability limits, which in most states are far too low to cover the damage from a serious accident. If your liability limit is exhausted, an injured party can potentially come after your personal assets for the rest.

Two items are especially easy to overlook. First, uninsured and underinsured motorist coverage. This protects you when the at-fault driver has little or no insurance, which is more common than most people expect. Second, your auto liability limits need to meet the underlying requirements of your umbrella policy; if they’ve slipped below that threshold, your umbrella may not respond the way you think it will.

Umbrella: The Coverage Retirees Most Often Skip

An umbrella policy extends your liability protection above the limits on your home and auto policies, typically in million-dollar increments, and it’s inexpensive relative to what it covers. For anyone who has accumulated real assets, it’s often the most cost-effective protection available.

This matters more, not less, as you approach and enter retirement. You’ve spent a career building the assets that now fund your lifestyle, and unlike your working years, you no longer have decades of earning power to rebuild them if a judgment wipes out a portion. An umbrella policy is designed to keep a single accident or lawsuit from reaching the nest egg you’re relying on.

A review confirms two things: that you carry an umbrella at all, and that the required underlying limits on your home and auto policies are actually in place so the umbrella will pay out when called upon.

What Else a Review Brings to the Surface

Some of the most valuable findings come from changes you may not have thought to report:

• New risks on the property: a pool, trampoline, or dog can create liability exposure (and some are considered “attractive nuisances”).

• A home-based business or short-term rental (think Airbnb), both of which are typically excluded from standard homeowner’s coverage.

• Serving on a nonprofit or association board, which can carry personal liability that a separate policy may be needed to address.

• Property held in a trust or LLC that isn’t listed as an additional insured, leaving a gap in who’s actually covered.

• Coverage seams between insurers, where each policy assumes the other is responsible and neither fully pays.

Insurance is one of the few areas of a financial plan where the cost of getting it wrong can undo years of disciplined saving in a single afternoon. A review every year or two, and after any major life change, is a small effort that keeps your coverage aligned with the life and assets you’re actually protecting.

If it’s been a while since you’ve looked at these three policies together, that’s usually a sign it’s time. I’ve got a new review tool at my disposal and will be taking my existing clients through this exercise.

If you are interested in a review, just let me know!

Portfolio & Market Updates

The Big Picture: July included two straight weeks of negative returns for both the S&P 500 and the Nasdaq 100 and a runup in bond yields that pushed bond values down. Volatility was high, with several major stock names making significant moves both up and down. The S&P 500 ended the month slightly down, the Nasdaq down several percentage points, and the DOW ending up slightly.

None of this was driven by anything new.

The market this year has grown in spite of the war with Iran, high inflation, and unprecedented spending on AI infrastructure. July was a month of coming to terms with these concerns. The broadening of the war with Iran, which appeared to be coming to a close in June, drove oil to over $100 a barrel at one point and added fuel to concerns about long-term inflation. Add to that the continued announcements by major tech companies about major AI spending, and the market had to take a breather. The end of the month featured a Federal Reserve report that created additional concerns that interest rates will have to go up to tackle persistently high inflation.

Key Takeaways for Your Portfolio:

• Asset Allocation: Where do you hide when everything seems to go down together? Bonds can play many roles in a portfolio, but there is a misconception that the “safety net” role they play means they won’t lose value when stocks are going down. They certainly can, and often do, go down with stocks. The difference is a matter of magnitude. With few notable exceptions (like 2022), downturns in bond values are typically much more muted than downturns in stocks. Typically low single-digit drops in value for bonds compared to double digit losses in stocks.

• Fixed Income & Equities: Stocks and bonds declined in July, with the S&P 500 still showing double-digit returns so far this year, while the bond market is slightly down for the year.

• Our Focus: We continue to manage portfolios with a strict adherence to risk targets and retirement income needs built directly around our clients’ “Retirement Ratio”. Do you know yours?