Ep #158 - The Cost of Waiting: Why Doing Nothing Is Still a Decision

Most financial plans don’t fall apart because of bad advice. They fall apart because good advice never gets acted on. In this episode, Adam and Ben explore why even the most successful people struggle to follow through on financial decisions from time to time. From cash sitting on the sidelines to delayed Roth conversions, outdated estate plans, and missed opportunities, they unpack how inaction quietly becomes one of the biggest risks in a plan. They also talk about the real reasons behind procrastination; feeling overwhelmed, being fearful of outcomes, and the desire to avoid regret are just a few. Listen in as they share how thoughtful planning can help break the cycle of inaction.

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[00:00:00] Ben Haas: Hi everyone, and welcome to AB Conversations, where we will help you CFP your way out of it. A podcast where you get into the minds of a couple certified financial planners on how we think and feel about everyday financial planning questions, and what should really matter most to you. A healthier financial life starts now.

[00:00:27] Ben Haas: So Adam, different kind of topic today. Not gonna be too, well, I shouldn't promise that we're not gonna be too into the weeds on planning like things, but we're gonna lean back into some of the behavioral things that we recognize in planning. Mm-hmm. Most plans don't fail because of bad advice. We don't get the outcomes we want sometimes because we just didn't implement the plan, right? And we've gone through coursework. We know that research shows that clients really only enact statistically a portion of the advice that we give them. And there's gonna be many reasons we can talk about that behaviorally, emotionally, or we could just say life gets busy. But we really want to talk today in this episode about that inaction as actually its own, like planning risk and the problems that can come from that. So long enough intro but setting the stage here, inaction can be a problem, so let's talk about it. 

[00:01:19] Adam Werner: For sure. Yeah, and even getting into some of these specific reasons, I think these are gonna be fairly obvious to people, but that doesn't make the hurdle any easier to get over sometimes, right? Yeah. It's just us as humans, but one of them that we often see is just the feeling that there are either too many decisions that need to be made, all at once.

And it's just that decision fatigue. Three or four are just really big decisions to be made, but there's maybe some micro decisions along the way. By the time I get to the second or third thing that needs to be decided, I may but just mentally be done. Yeah. Like I don't wanna make another decision.

This has been taxing enough, like I'm just, I'm not gonna do anything inactivity is also a decision kind of along the way too, and just sometimes it's, again, just maybe too many decisions to make and I'm just overwhelmed. Or sometimes they're just very complex and they require a lot more brain power and you just, again, you just kind of fatigue yourself very quickly.

[00:02:17] Ben Haas: Yeah. We've seen this because we know that most people reach out to us because they have a big fire to put out, and that's kind of the point that now we're trying to work through these things and they can feel big or overwhelming. They are also emotional or things that we may be suggesting they are resisting in a certain way.

We're in tax season, taxes can be painful. Selling something, reallocating things, it can feel like, "Hey I'm cutting my losses." There are just parts of this process, of course, that carry more weight than just I financially understand it, and I guess financially we should do it. But they're still a human element to getting those things done and it not feeling okay at sometimes.

[00:02:58] Adam Werner: Yeah, for sure. And I think there's a word here where it's a couple different things that get, get smashed together. It's the fear of being wrong or the fear of regret, right? If I make this decision, there is some finality to that, and now I have to deal with whatever the outcome is, right?

[00:03:16] Ben Haas: Change is hard.

[00:03:17] Adam Werner: Yeah. So, so it's, you know, what if I do this and I'm wrong? That's of reason to avoid it. But then on the other side, there's that false sense of security that, but if I don't make this decision now, then number one, I can't be wrong, right? If I'm not making a decision and I can just kick that can down the road, and that's a problem for future me to have to deal with.

[00:03:38] Ben Haas: Yeah. And so much of planning is based on assumptions on the future.

We, especially when we're talking about retirement or longevity planning even the estate planning where we're talking about, you know, really big things about multi-generational wealth. You know, trust us, you've got enough, you can do this.

There is that. Yeah. But today feels real and that feels like, we're making too many assumptions and I just, I can't know. I'm not confident enough to do that. Yeah. And then here we are with inaction. 

[00:04:06] Adam Werner: Yeah. And that's, I think that's, if we needed to put like planning in a nutshell, that is kind of it, right?

It's being able to separate the present versions of ourself and see the future version of ourself, I'm saying version too many times, but as a version, the future version is still a version of us, but that is behaviorally a very difficult thing to conceptualize and treat your future you as the you today, because again, that's just not the way that we're kinda wired to think and feel about things. And because money is so emotional and visceral, I think that just adds to the difficulty. 

[00:04:47] Ben Haas: So I think those are a lot of the big ones. I'm just gonna quickly rattle off here. Yeah. I think that what we're also gonna talk about today is kind of just time is passing us by. Like that inaction is maybe just because we are too busy. Maybe I needed an accountability partner. Maybe I didn't think it was really that important to get it done, but now too much time has gone by. There is that part of the planning relationship that we have with people that maybe is where we can focus some of the conversation today too.

Your inaction is not neutral, right? That in itself is a decision. It can have consequences and that can compound over time. So maybe let's just go through some of those planning examples now that we've set the stage on sometimes why it doesn't happen. 

[00:05:28] Adam Werner: Yeah. Well one that I think is kind of evergreen, it's just having, I was gonna say too much cash, but that's all relative, but it's having cash that's not filling a specific purpose, right? We are strong proponents of having enough cash, right? It's the whole three bucket theory idea. That cash, hopefully allows you to compartmentalize some of the other risk within your investment life. 

[00:05:53] Ben Haas: Right?

[00:05:53] Adam Werner: But if it's not, if that cash is not really there to do a specific job and it's more just there for, I see this dollar amount and I feel comfortable with that and the peace of mind and the safety that comes along with that. That's a powerful tool. 

[00:06:07] Ben Haas: Yeah. 

[00:06:07] Adam Werner: But if there is a, a gap between, putting that cash to work and reaching maybe some of my bigger picture goals, whether that's retirement or a kids' education, or it's just the estate and legacy side of things, that it goes beyond me. And that could help kind of further those longer term ideas. Yeah having cash sit idle for extended periods of time is usually one that, it's a difficult hurdle for people because there is so much comfort in having that accessibility to something that is, is there, it's not gonna fluctuate. I know it's gonna be there, but if it can be leveraged, certainly that's something we want to address. 

[00:06:47] Ben Haas: Inaction can mean I just feel like there'll be a better time to invest or inaction could mean I got a raise at work and I didn't really think about what else could be going and deferred into retirement accounts.

Like there are those little fundamental things you said it to kind of kick things off. These sound obvious. But it's part of the reason why we want to kind of just bring attention back to a simple checklist every year. Make sure that things are getting done and holding people accountable so we could like in thinking cash and thinking timing with investments.

That other one, I think is just the Roth conversion idea, you know? Mm-hmm. We are big proponents of trying to get money into that bucket, and there are reasons why people may not think about it. Again, it can be the timing of things, it can be the taxes that may be owed now, but there certainly are times throughout the year where the market is down and it would be a great time to do that conversion at that time.

So future recoveries are happening in a tax-free spot. But that is definitely one of those, ah, well, if I put it off, it's still long-term growth. You want it to be tax free. 

[00:07:53] Adam Werner: Yeah, for sure. Another one is we'll say avoiding insurance decisions, but I think that's more through the lens of like that whole legacy and estate side of things when it comes to like life insurance as a planning tool.

And thinking for our older clients, again, just maybe leveraging this and maybe it's not necessarily just life insurance, it's the long-term care, side of, the insurance world, right? It's where we've seen those are typically the areas that don't get implemented first because they're dealing with mortality, either death on the life side or the long-term care side of things, which again, it's just not, it's not the fun planning, you know, conversations and strategies that go around with that, but point being, those are the areas where it's very easy to say, I'll worry about that, later, or that's a next year problem, or I'm gonna hit this hurdle and then I'll think about it and then I'll make a decision. But what we've seen unfortunately in kind of real world experiences, we don't know what today brings. We don't know if our health is gonna be the same six months from now as it is today.

And when it comes to life insurance, long-term care insurance, your health plays a big role in number one, are you eligible, but then what does it end up ultimately costing from a premium standpoint? So sometimes it is often better to at least start that process sooner, even if it's just to explore what's possible.

But that's certainly an area where the periods of time if you don't make a decision as you get older, that cost is going to increase no matter what. But the wild card of, are you still healthy when maybe you get to the point that is, okay, now I'm ready. But if physically you're not eligible now you're in a really tough spot where some of those options may now have been removed.

[00:09:40] Ben Haas: Yeah. And we could tie that right into estate planning, right? I was actually having this conversation, the sidebar with somebody very recently like, Hey, if you could know the day that you would pass away, would you rather that than being able to map it out. But really when it comes to estate planning, like whatever you have done today is what's gonna stick, you know?

'cause you never know when that time's gonna come. So not updating estate plan or not getting it done, this is a huge risk to everybody. Um, mm-hmm. Updated beneficiaries happen, family conflicts in the future happen. So that is definitely one of those things. I forget what the stat is and I don't wanna get it wrong, but if I asked you, you know, what percentage of people have just a simple will, it's a very, it's a very low number.

[00:10:21] Adam Werner: Yeah. Yeah. It's, it kind of crazy when you about that. Maybe this is more on the fun side, but it's delaying maybe some of those decisions around retirement or around spending, right? It's maybe somebody working longer than they may have needed to. Just again, with that maybe you know, scarcity mindset that, I don't know what my own enough is, so I know if I just continue to work, I'm going to be okay.

But meanwhile, I'll draw the example. We had a client, my gosh, more than a decade ago at this point, which is kind of crazy to think about. Who worked his entire life retired, and it was like three or four months later he passed away. Yeah. 

[00:11:02] Ben Haas: Oh man. 

[00:11:03] Adam Werner: Yeah, and like those things just stick with us because yeah, he didn't have the opportunity or the time to actually enjoy retirement when he got to that point.

So some of those ideas just around the timing of retirement and hopefully being able to do a lot of these things while you're still young and healthy enough to do them. And we hear that from clients now all the time too. But it is a balance, right? It is trying to walk that line between living for today, making sure I'm still going to be taken care of in the future.

[00:11:35] Ben Haas: Right. 

[00:11:35] Adam Werner: But again, we don't wanna put we wouldn't wanna see that situation where everyone's putting their eggs in either basket. Right? Right. I'm gonna, I'm not gonna live today because I'm worried about the future or vice versa. 

[00:11:46] Ben Haas: Yeah. And this whole idea of inaction, like now let's shift it. This is not to sound judgmental, right?

This is very normal behavior. I am very guilty of this myself, and we really could wrap it all up in life can get busy. And the reality is not all waiting's bad, right? Sometimes it is appropriate, especially around investments. When emotions are running high, we want people to not take action.

But if there's situations where we're in partnership with somebody and information's not clear, right? They're not confident. That's great. Let's take a step back and let's slow down through it. When there are major life things that are gonna be happening or kind of pending, or there's a lot of uncertainty, that's a great time to kind of just pause and not have an action.

But that's different from like intentionally delaying things or unintentionally avoiding things. And that's where like we gotta be a partner in that process. We're not just here to build plans. 

[00:12:37] Adam Werner: Yeah. And sometimes it is, we take our role and responsibility, obviously very seriously.

But sometimes it's just being that conversation facilitator. Mm-hmm. Right. We're not necessarily, we don't necessarily have the answer in every single circumstance, but we know enough and have seen enough to be able to help people, you know, talk through whatever that decision may be and prioritize 'cause sometimes that can lead to a decision or a confident, you know, outcome that is again, just kind of prioritizing. If there's these three different variables, this is the one that is the most flexible to me, and these other two are non-negotiables. These need to happen. And again, that may change what that ultimate decision kind of may be.

Just kind of taking that one step further, if it does feel like, and maybe I said this earlier, if it does feel like it's just a big, kind of daunting decision, breaking it into smaller pieces is so helpful to just, again, be able to digest it.

And I think just remove yourself from this situation where you, what's the saying? You can't see the forest from the trees. Right? Yeah. Just being able to kind of zoom out a little bit. And see more of those little things that can lead to a bigger decision. 

[00:13:52] Ben Haas: Yeah, we can pepper this podcast with cheesy statements like how do you eat an elephant? It's one bite at a time.

But we've seen that and there is psychology and study behind this. If I tell told Adam like, go get your estate plan done, that feels daunting when the micro action could be, let's schedule an appointment with estate attorney. Yeah. Let's use this cheat sheet to just think about who are the people in places that matter most.

Take that big project and just what's one micro action at a time. One micro action at a time and create some accountability around it.

[00:14:23] Adam Werner: So the accountability there, I'm glad you said that, I think the key here because as in your example that is, Hey Adam, go get an estate plan.

Yeah. That if we said that to a client, I think we'd be met with, what the hell are you talking about, Ben? What does that mean? 

But you're right. Like, what are those steps? And sometimes that accountability just needs to be, I'm not doing this on my own, right?

I have somebody to lean on, whether that's us to help facilitate the conversation, and in this example of, you know, updating estate documents, having an attorney to just help navigate that process and hopefully outsource at least part of that stress and anxiety that goes along with that. That is, I'm fine to just reach out to this attorney. They will help drive the process.

There's a lot of comfort and peace of mind that comes along with that, that again, I don't have to be the one solely responsible for every single step of this process. If I can lean on an expert, that's great.

[00:15:15] Ben Haas: Yeah, or just bring it down to we, we try to end all our meetings with the next steps table.

Who's gonna do what? By when. That's accountability. Can we break that down into micro actions? And then if things are kind of stagnating, like we want to create touch points, but at some point, let's just do these things together. If it's a task that really you could be doing, but either because of you're uncomfortable, you don't know how to do it, it's not clear then we'll often call for a working meeting, bring the laptop in and let's just do it together. Because that is kind of, I'm not trying to rush to the end here, but we do need to kind of just break that cycle of inaction.

And some of that can just be, yeah, we've talked through what needs to get done, we kind of agreed to what needs to get done, then let's find a way to do it together. 

[00:15:59] Adam Werner: Yeah, in thinking of that, you know, that just idea of, again, just breaking things down, I struggle with this with my kids too.

Momentum is a real thing, right? So if I'm staring at all of these different decisions, or I'm just, all of these things are kind of floating in my head, that can very easily lead to just that feeling of just being overwhelmed. And you know what? It's too much and I'm worried about making a wrong decision. I'm just gonna avoid it.

But to your point, right? If we're able to start to build on, here's our next micro step. Mm-hmm. We check that box, we cross it off there. There is that real behavioral kind of, it scratches that itch of I can see some progress. I'm building this momentum and in our experience that usually continues hopefully till you get to the end of the process.

But yeah, I think that's a big piece. And sometimes it's as simple as, you know what, just, I'm not in the right mindset right now. Let's revisit this in X months. Like sure, yeah but actually putting a time to it and not just the general, well, we'll talk about that later.

Just giving a deadline. But we often like to do that in meetings. If it isn't something that needs a decision today, but we don't wanna lose track of it in the future, we will put a reminder in our system just to touch base. This was what we said we wanted to come back to, have your feelings changed? Again, just that accountability that it's not gonna slip through the cracks. 

[00:17:20] Ben Haas: Yeah, and here's how I'll bring this all the way back around to the big picture of planning here. We want to do the best we can to tie all of these next steps back to what people say matters to them, what they value.

So using that random example of estate planning. We don't have clients that say, yeah, I wanna leave a mess behind my wife and kids. Let them figure it out. I won't be here. No they care about these people. So we need to take these next steps because that's aligned to what you value.

So all of this, like, talk of inaction, it is normal. But we really want to normalize it in a way that we can now say, all right, how can we help? What do we as advisors need to do? And we take the implementation side of planning that we need to own a role in that. 

[00:18:05] Adam Werner: Yeah, and I guess maybe one last thing to kind of note is, there are certainly planning decisions that are irrevocable, right? You get one chance to make the decision and those certainly carry a lot of weight, but there's a lot of things that aren't irrevocable, right? Like that, right, that we can just pick the next best step. Doesn't need to be the perfect solution here, but if it's moving me in the right direction, sometimes that's good enough in the short term, right? And I'm certainly guilty of this, that, if you're gonna do something, you do it right. But sometimes what's the, I feel like you have said this for forever progress, not perfection. 

[00:18:42] Ben Haas: Yeah. 

[00:18:42] Adam Werner: Right. Is still, it sometimes is a good outcome. 

[00:18:46] Ben Haas: Yeah. That's a great way to wrap it up.

So yeah, if there's anything on the plan that people have been putting off, like a little boost, a little push, no time like the present. 

[00:18:55] Adam Werner: Yeah. Happy to help. 

[00:18:57] Ben Haas: All right. Till next time.

 Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only, and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you, consult with your attorney, your accountant, and financial advisor, or tax advisor prior to making any decisions or investing. Thanks for listening.