Financial advisors are always preaching the importance of a financial plan, and I believe they are important too. Mitlin Financial’s belief is that a financial plan is paramount to reaching and exceeding your financial goals. Most people spend more time planning their family vacations than they do their financial lives. Having a life plan is an important factor when designing and developing your financial plan, and it is frequently overlooked by financial professionals.
What is a life plan? How does this integrate and/or affect my financial plan? Essentially, a life plan is having a plan for what you are going to do with all the free time you will have when retired.
As a firm, we spend a considerable amount of time having these types of discussions with clients when we begin the planning process. This conversation continues as they approach their retirement date. We all have different ideas as to what our ideal retirement is going to look like, or what it means to us. In some cases, retirement may mean never working another day in their life, while others may look at retirement as the day they wake up in the morning and know they do not “have” to go to work, but may continue anyway. Some may simply slow down and maintain a part-time job.
The fact is that most people are preparing themselves financially for retirement, but not thinking about the emotional and life fulfillment aspects of retirement. Many of us will spend upwards of forty-plus years working, and raising a family, and we do not have time to develop hobbies and outside interests to keep us busy during retirement. In most cases, people do not view their ideal retirement as not going to work and sitting home all day to watch television and old movies; there has to be something more meaningful than that.
When thinking of retirement, most people still want to be productive members of society. It is for this reason that you must begin to think about a life plan as part of your financial plan. It is imperative to think about how you will spend all of this free time that you will now have since you will no longer be going to work. You may decide that golf, fishing, travelling, watching after your grandchildren, consulting or having part-time employment may be your life plan, and these are all great things. It is important that you know what your plan is and refine it as time goes on.
Thinking about your life in retirement is the equivalent of using a telescope to look out and see how you would ideally like to be spending your time in retirement, and what you will need financially to support that. Then, it is important to dial the telescope back and use a microscope to see what you can do today to help you get there. This may mean adjusting your priorities to begin getting involved in some of those activities you plan on taking part in now so you have the knowledge, the ability, and the social circles to support your involvement. You will also need to make sure that you are in the right financial circumstance to support it as well. As an example, if you plan on retiring and travelling around the world sailing for a few years, you need to make sure that you have the skills and the desire to embark on that type of trip. In addition, you need to make sure that you have the financial wherewithal to support it.
We find that those that have their life plan and retirement plan in place are the most successful at having an enjoyable retirement. People who have addressed a retirement plan from a financial aspect- which is a minority- typically have not explored their life plan, and this is a recipe for disaster. Imagine retiring and having the financial ability to sustain yourself for the rest of your life, but you have no idea what you are going to do with that time. This is a major contributor to why we are seeing people working longer and later in life. Although some of these individuals have no other choice than to work, for financial reasons, many of them continue to work because they failed to design their life plan for after work. Not having a life plan for retirement has caused them to continue working so they can still be a productive member of society, and not someone that is sitting home doing nothing.
Mitlin Financial assists our clients in addressing both the financial and life planning they need to be successful in retirement. We are here to help you instill these concepts within your own family. Feel free to contact us, Mitlin Financial, at (844) 4-MITLIN x12 if you or someone in your family needs assistance in getting started on their plan today.
This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.