Financial Planning for Law Students and Lawyers: An Interview with Tracy Shackelford from Northwestern Mutual
By Julie Silverbrook • March 12, 2014•Careers, Other Career Issues
The average law school graduate will begin his or her career with more than $100,000 in debt, and, yet, many of us leave law school without thinking much about short- or long-term financial planning.
Last week, I sat down with Tracy Shackelford from Northwestern Mutual to discuss the importance of financial planning for law students and lawyers.
Tracy, tell me a bit about yourself and your work with Northwestern Mutual.
My name is Tracy Shackelford and I have been associated with Northwestern Mutual, first as a client when I moved back from Europe to the States with my family, and as a financial representative since 2010. The work I do helps my clients develop a comprehensive financial plan that serves as a road map that guides them towards their goals at various phases of their lives. Through a distinct financial planning process, we get to know our clients, and their hopes and dreams, as well as fears, to help them reach their long-term goals.
Let's start with a big picture question: what is financial planning and why is it important, particularly for women?
To me, financial planning is a process which includes addressing the risks that could face us (that of a premature death, losing our most valuable asset due to an illness or disability, or needing long term care), saving for financial goals using a variety of potential “buckets” and living the retirement we choose. At its close, a financial planning process helps us clarify the type of legacy we want to leave, and with whom.
Making a plan and working toward your goals gives you control over your destiny. A woman with a plan and discipline can achieve great things be it planning for a strong financial future or making career moves and other choices for her family.
Many Americans are financially unprepared to live long lives. According to the Centers for Disease Control (CDC), average life expectancy in the U.S. has increased to 78.2 years (75.7 for men and 80.6 for women). That means, on average, an American woman will live almost five years longer than their male counterparts. That means a woman may need her financial plan to last at least five years longer than a man’s. That’s why it’s so important for women to start planning for the long-term as early as possible.
When should a lawyer or law student begin thinking about financial planning and implementing a financial plan?
Law school students should start thinking about financial planning when they begin taking loans to pay for law school. The sooner they realize how the interest on those loans will be calculated, and how they might minimize the loans they take, the better off they will be after graduation. As soon as a young attorney gets their first job, I believe they need to start planning for their future. A financial expert can help them address debt, explain the need for an emergency fund, help them address risks like disability, health care and taxes, and help ensure they are saving for the long-term in vehicles that align best to their goals.
How does a lawyer or law student typically get started with a financial plan?
I encourage lawyers – and all clients – to really think about the various areas of their lives and what they want to achieve – personally, professionally and financially. Reputable individuals in the financial planning business will help their clients dream big about what they want to achieve in the short and long term, and then help them take the steps to reach those goals.
What does a typical financial plan look like?
I don’t know that it is possible to say there is a “typical” financial plan. No two people have the same goals and needs, so no two plans look alike. The plans we develop often have a discovery page listing the client’s goals, a section that focuses on retirement planning and parts that focus on the risk management, if appropriate. Depending on the age of the client, we will “stress test” their retirement plan against a potential future long term care need to see if their retirement can withstand this need. The plan might also include recommendations.
Is it necessary to modify the financial plan as a person progresses in her career?
Absolutely. Everyone’s life changes and it is important that the financial plan adapt as well to accommodate new jobs and salaries, debt reduction, possible marriage, children, home purchases, divorce, aging parents, etc. Life throws us new challenges and opportunities – and the best plan will respond accordingly and help keep the client on track.
Any concluding thoughts?
I work with too many women who leave the planning side of their lives to their husbands. The good news is that I’m also seeing more and more women who are choosing to take control of their financial future. It is crucial that young women find a planner they trust, someone who cares about them and their futures, and that they stay connected to their plan.
Also, I’d like to note the power of compounding interest – it’s huge. Young people who start saving from the first day on the job can benefit enormously from compound interest.
Julie Silverbrook is a member of the Ms.JD Board of Directors and chair of the Ms.JD Academic Committee. She currently serves as Executive Director of The Constitutional Sources Project (www.ConSource.org).