We recently spoke with some investors who were living well within their means, saving every bit they could for retirement—to the point of living frugally because of a well-founded fear of outliving their assets. Conservative by nature, they looked at some online calculators and committed to saving everything for some distant future. The reason we talked with them was because one spouse felt that they weren’t really living.
As a society, we have been trained to focus on achieving our retirement goals because so much emphasis is placed on the golden years of retirement. Many times, that is how financial plans start. We look at what you’re able to save to fund the retirement lifestyle you desire. However, the financial plan created at 39 is not the same plan that you’ll have at 49 or even 59.
While the financial plans we create look at least 10 years out, it’s not the same plan you will have 10 years from now. Goals change as life happens. When developing a plan, we look at an investor’s current lifestyle, spending, and saving patterns and begin basing a financial plan off that, generally allowing the investor to maintain their current lifestyle. Sometimes an adviser must have the difficult conversation of, “If you keep spending like this, you won’t be able to retire.” But more often, there is the conversation of, “What does your dream life look like? What steps can we take to get there?”
The future is not guaranteed. You may have plans for travel, hobbies, or a fantasy home in retirement but are unable to do the things you anticipated in retirement because you lack the physical ability, health, or a partner may not be around to share the dreams. Instead of delaying life’s most enjoyable experiences, you can develop your financial plan to allow you to lead enriching, enjoyable lives. Making memories now shouldn’t be to the detriment of your retirement plan; however, there is a certain amount of living you’re allowed to do.
Most financial advisers look at investors’ situations from a retirement perspective; however, it is also important to invest in memories when you are younger with family and friends, doing what you want to do, such as hobbies, travel, etc. A financial adviser’s goal is to help you make your money support how you want to live.
Ultimately the financial plan needs to match the person. A financial adviser can provide the best advice based on what they know, but if it makes the client uncomfortable, the relationship will break down and the plan won’t be successful. As an investor, your relationship with your financial adviser is often a close, intimate friendship where you communicate goals, dreams, interests, and wants.
A retirement plan focuses on managing your expenses after the paycheck stops whereas a financial plan focuses on creating memories and living comfortably while ensuring that you’re saving and investing enough to support your lifestyle once you do retire.
If you have questions on how to begin shifting your asset allocation for retirement, the experts at Henssler Financial will be glad to help:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Listen to the January 28, 2023 “Henssler Money Talks” episode.
This article is for demonstrative and academic purposes and is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
