Planning for Life, Not Retirement

What comes to mind when you hear the term “financial planning”? Goals and savings are two initial thoughts, but traditional financial planning is mostly about money and math. It’s important to look at how much you earn and determine how much money you think you will need to live as you’d like during your retirement years. I’ve heard several people describe the financial planning process as being as exciting as going to the doctor for your annual check-up and sometimes as emotionally draining as well. Like our annual check-up, many of us unfortunately choose not to deal with it all, electing to put off worrying about the future until it arrives. However, there’s a small minority of financial planners and clients who are exploring a different approach. This approach has a few different names, but life planning is one of the more frequently used.

Life planning is different than traditional financial planning because the focus is more about who you are and who you want to be rather than the money. Unlike people engaged in the traditional planning process, people engaged in the life planning process don’t look ahead in an effort to figure out how to maintain their current way of life in retirement. Instead, they look at how to change their current direction to achieve the lifestyle of their dreams. A recent study by a large financial institution found that 51% of retired affluent Americans said they would have preferred to focus on life goals rather than a retirement number. Among those retirees who wished they had focused more on life goals, 38% said they would like to have spent more time envisioning life in retirement. Another 13% said they would like to have found a way to live an ideal lifestyle, and another 8% would have created a better plan to support philanthropic missions.

Retirement is evolving as economic turmoil and social awareness make us rethink what matters most. This new definition has elements of stewardship, service and family. Winning in retirement is becoming less about the dollars and cents and more about quality of life. There’s no question that money is a major factor in leading the retirement life you desire. However, a large majority of people are shifting their financial goals and instead are choosing to restructure their retirement planning in order to do more, give more, and serve more. Giving up the big house, the new car every two years or the “once in a lifetime” vacation can help decrease expenses and enable people to trade in their day jobs for lower paying, but personally-fulfilling professions and activities.

Perhaps the way we define our “dream life” as a society is gradually changing. The goal of retiring, paying the bills, and traveling is important. But the next step in your “dream life” may be reviewing what makes you truly happy and fulfilled and then incorporating those aspirations into your plan. That’s where true life planning can take place.

Chris Kittrell is co-founder and a Senior Financial Advisor with Rather & Kittrell.  He is available at [email protected]