“The art of simplicity is a puzzle of complexity.”
— Douglas Horton, American clergyman, 1891-1968

 Wealth management is a lot like a Rubik’s Cube — multifaceted and multidimensional.

Try getting the yellows lined up on one side — and the other sides are a mix of red, green, blue, and white.

We all know the simple result we want, but getting the desired outcome is a puzzle of complexity.

The same is true of wealth management where we are trying to accomplish multiple goals that may include a good lifestyle today, college for kids/grandkids, a secure/comfortable retirement, and leaving a meaningful legacy — each with different time horizons, all competing for the same resources, and each involving potentially different strategies.

But unlike the Rubik’s Cube, where the puzzle itself remains constant, real life is ever-changing, making wealth management even more complex.

Just consider some of the many variables that go into comprehensive financial plans:

• Health — including factors you control (diet/exercise/habits) and those you do not (genetics/environment/accidents/sickness) 
• Job — income, opportunity, benefits, security and downsizing
• Markets — returns are unpredictable, and markets can be both rewarding and punishing
• Economy — expansion, recession, unemployment, inflation and interest rates
• Political — changes in government policies and even governments themselves around the globe
• Taxes — income, capital gain, property, sales, estate/gift and value-added

There is an old Yiddish saying that “man plans, and God laughs,” which highlights the challenges of planning for the future.

Yet despite these unknowns and challenges, plan we must.

This means having serious conversations about your current financial situation, setting real goals, and then creating plans to meet these goals.

Plans should serve as a roadmap that must be reviewed regularly to meet the ever-changing nature of life, which has an amazing way of giving us surprises (both good and bad), and “recalibrated” to help you stay on-track.

This planning is a PROCESS — not an EVENT — that requires vision, time, commitment and patience.

Starting as early as possible is important. Slight changes made over very long time periods can have a dramatic impact, while dramatic changes may have to be made if you wait too long.

Research clearly shows that Americans have a tough time dealing with all of this. Gallup recently reported that 45% of Americans say their current financial situation is excellent/good, with 55% saying it was fair/poor.

Besides worrying about meeting current living costs, 66% in Gallup’s poll said not having enough money for retirement was their top concern, with worries about being able to pay medical bills, and not having enough money for children’s college also top of mind.

And Gallup reported that only 46% of U.S. adults have a will that describes how they would like their money and estate handled after their death.

So, it seems there is much to do.

Let’s focus on planning for a secure and comfortable retirement for a moment. For most folks, the goal is to closely maintain their current standard of living.

Should be simple, right? You set a monthly spending target and start crunching the numbers. But now imagine trying to integrate Social Security, retirement savings accounts (IRA, Roth IRA, 401k, 403b, profit sharing, etc.), pension plans, real estate, a business and personal savings/investments in meeting spending needs years ahead and possibly lasting decades.

What about the impact of taxes and inflation? How long will you live? And what kind of returns will financial markets provide over such a long time? Things get complicated quickly.

And what about investing? Investments should be prudently aligned with your financial goals, time horizons and need/ability to take risk.

In most cases, holding a well-diversified portfolio built around long-term goals can make sense.

Trying to determine your “risk tolerance” — your ability to stick with your plan through market ups and downs — can be essential to long-term success.

An aggressive portfolio may sound great, but won’t be a wise choice if you can’t stomach the volatility and wind up selling when markets experience sharp declines. Play it too safe, and the portfolio may not generate the returns needed to fund your retirement.

I’ll dive deeper into investment planning in future columns but, for now, just think about trying to identify the right kind of portfolio.

Then there’s estate planning. Do you have an up-to-date plan in place if you are unable to manage your own financial affairs, or make your own medical decisions? Do you have a will or trust and, if so, is it updated to reflect your wishes and name the right people to carry them out?

Have you considered the impact of income, capital gains and estate/gift taxes? Should you consider gifting strategies to family and charity?

Does your family have a general understanding of your finances, wishes and a list of professional advisers they would need to contact if/when something happens to you?

And what about long-term care? Will you need help with the activities of daily living as you get older? What kind of help might you need?

Who will deliver the care and where will it be provided? How much will the care cost and where will the money come from? These are serious issues that confront our aging population.

All of this (and many other aspects of truly comprehensive planning) paints a picture of great complexity — like that Rubik’s Cube. In trying to simplify things, I am reminded of the joke “how to eat an elephant,” the answer being “one bite at a time.”

The first step is admitting you need to do some planning and are committed to making it happen. My next columns will talk about next steps, so stay tuned.