Financial Planning Is More Than Numbers

Portrait of a happy family indoors

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When we think about money, we’re constantly adding, subtracting, multiplying and dividing—which leads to a common misperception that financial planning is all about the numbers. Yes, making sure the math works is very important, but I’ve come to realize that planning your investments and financial goals is about a lot more than just numbers. It’s also about your choices and your options, about identifying what you want out of life and how you’ll make it happen.

The numbers should be working for you, to help you achieve those goals. You shouldn’t be working on your financial plan just to achieve the numbers.

When I talk with clients about all of this, I try to steer the conversation to my clients’ long-term plans. Most people would like to have a financial plan that will eventually allow them to cut back their workload and do more of the things that bring them real joy and fulfillment—a concept also known as retirement. All goals involve numbers as well as emotional choices, but I see retirement as one of the best examples of what financial planning is all about because so many life choices go into it, along with making sure the money is going to be there.

Just a few weeks ago, I met with a young couple who are just starting out, with children who are only six and two years old. The couple were kind of surprised when I told them it isn’t too early to start planning for their retirement—not just by saving money, but even more, by starting to consider what they care about, what they want to be doing with their lives four or five decades from now, and what might interfere with their plans and force them to change direction. The younger you start, the more time you have to make sure the numbers are working for you

Here are some very important things to think about beyond the numbers when you’re planning this major life goal:

  1. Who are you without your career? What will make you relevant in your own eyes if you relinquish command of your career? Invest time in exploring who you are and what you care about. Do you like learning? Teaching? Doing things with your hands? What lights you up?
  2. Do you have a target date for retirement? Some companies or occupations have a mandatory exit date.
  3. What could go wrong? Everyone needs a “Plan B” that addresses what they’ll do if Plan A doesn’t work. I don’t mean just running out of money or unexpectedly coming down with health problems; what if you find that you’re bored spending every day of your life on the golf course? How will you and your partner cope with disappointment and find a lifestyle that makes you both happy?
  4. Are you willing to fail? Be willing to try things that are totally new to you, and risk being totally inept. New experiences are what makes this new stage of life worthwhile. For example, if you’ve always wanted to play an instrument, try it. I guarantee that you won’t be ready for Carnegie Hall a week in, but who cares? Have fun.
  5. Are you approaching retirement with positive expectations? Attitude is powerful. If you insist that because neither your grandparents nor your parents lived beyond age 67 retirement planning is irrelevant, think again. What’s the ramification if you’re wrong? Positive feelings are really important to your mental and physical health—and you certainly don’t want to spend all of your hard-earned cash at the doctor’s office.

There are other factors to consider, such as how much money you’ll need and where you’ll want to live, of course, but start working on these five points first. Begin with your values and what’s really important to you. Recognize that your comfort zone will need to be disturbed as you transition, but hey, you’ve gone through worse, right?

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