The 4 Levers of Financial Planning 

I like to say that financial planning is more of an art than a science. In my opinion, someone who thinks financial planning is just math hasn’t experienced enough financial planning with real people.   

To create a financial plan, a financial advisor and their client need to understand the client’s values, their financial situation, and their ambitions.  

When it comes down to it, there are 4 main levers to pull when it comes to financial planning. Clients decide which ones they want to pull, and I inform them how hard they need to pull. 


The 4 financial planning levers you can pull are:


1. How long you work. 

2. How much you save before retirement.  

3. How much you spend in retirement.  

4. How aggressive your asset allocation is.  


Lever #4? Yeah – I don’t’ really like pulling that one very much. I assume a reasonable rate of return based upon the recommended stock/bond ratio and then move on. Why do I not focus on it? Because NO ONE KNOWS what real returns will be, and I don’t want to count on a higher rate of return and then not be able to achieve it (leaving someone’s retirement plan in shatters).  

So then, it really comes down to retirement age, savings, and spending. 

I might complete a financial projection that is “ambitious”, meaning that the clients’ goals and dreams lie beyond what is feasible.  

I am NOT out to tell people they can’t accomplish their dreams. I may, however, need to inform them that something needs to change to make their dreams a reality. 


Someone might come to me at 40 years old and say they want to retire at 50, want a lifestyle that I know with cost $120,000 per year in retirement, and only have enough cash in their budget today to save 10% into their 401(k).  

This is where I provide unbiased AND unjudgmental direction. If they were to only pull one lever, they would need to choose between: 

  • Working until 60 (lever 1) 
  • Maintaining a $80,000/yr lifestyle in retirement (lever 2) 
  • Cutting their current expenses, so they can save 20% to their 401(k) (lever 3) 

They now need to order their values. Do they want to sacrifice current comfort for future security? Do they want to stretch their working years in order to pay for their kids’ private school? What is most important to them? 

More than likely, we will end up pulling a combination of levers. Perhaps they will end up working until 55, spend $100,000 in retirement, and increase their 401(k) contributions to 15%.  

I give my  clients realistic choices and together we decide what choices are in line with their values.  

This is why I say that financial planning is an art. You can identity mathematical solutions, but the only way a client will be successful is if those solutions are aligned with what they value most.  


Need someone to identify what lever need pulled in your own financial life? Talk to an advisor!

But first, do some self-reflection in your own life to better understand your goals and prioritize them. 


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