Planning

“The best laid plans of mice and men often go awry.”

You may recognize this quote from John Steinbeck’s novel, “Of Mice and Men”. There are many things beyond our control that impact our lives. But that does not minimize the importance of planning for your future and taking deliberate actions to prepare for likely events.

Planning gives us a fighting chance at achieving what is important to us. While having a plan does not ensure success, it helps us think through our situation and make wiser decisions. Plans give us the opportunity to take action before important events occur, instead of reacting when it is too late.

Consider the milestones below. If they are important to you, it makes sense to plan ahead for them.

Move OutGet MarriedBuy HouseRaise KidsEducate KidsChange JobsBuild BusinessAccidents / IllnessesRetireEldercare

Move Out On Your Own

You may be faced with a lot of new financial issues. Seek counsel to develop wise habits.

Debt can creep up on you quickly. It can take a lot longer to shed it.

Now is the time to step up your efforts to save. Saving is most effective when coordinated as part of a budget. Plan for your future spending needs, and save the money you need before you spend it.

You’ve probably started your first full-time job at this point. Now is the time to start investing for retirement. Find an advisor who will teach you about your options.

Get Married

Work together for building prudent saving, spending, and investing habits. Talk about your future and how your financial habits may impact your ability to achieve what is important to you.

Life insurance may be an important consideration. Build your policy based on your specific needs, not some arbitrary rule of thumb.

Buy a House

You’ve just committed to a major financial responsibility – your mortgage. Budgeting and saving become a lot more important now. The closing process thrusts a lot of new responsibilities on your shoulders: a mortgage, property insurance, taxes, maintenance costs, just to name a few.

Take the time to learn about these before you buy the house. The closing process is fast, and you will have to make some big decisions with little time to think about them.

Raise Children

Your decisions no longer just affect you. The habits that you’ve been building become even more important. Now is a good time to meet with a financial advisor to review your plans and the saving, investing, and insurance strategies that you’ve put in place.

Build good habits and teach them to your children.

Educate Your Children

This is a very personal decision. What kind of education do you want your children to have available to them? Do they have special needs? Do you prefer private or public schools? College or trade schools? If you want to help pay for part of their education, it is a lot easier if you save for it over several years. Planning is key. Seek guidance on the costs, and how to save or invest for them.

Change Jobs

Your job could change for any number of reasons. Be sure to consider the impact on your family. Will you see a change in income or expenses? Do you need to relocate? Does it impact your spouse’s job or your family routine? Be sure to review the impact on your budget.

Having built up an emergency fund can make the transition a lot easier to manage. If the job change is unexpected, and forced upon you because of health issues, having put in place the right life and disability insurance could make all the difference for you and your family.

Don’t ignore your retirement plan. If you have a pension, 401(k), 403(b), or other employer-sponsored retirement plan, you will have several options to consider. Your retirement assets are too important to leave to chance. Now is the time to meet with your advisor to learn your options, and make the best of the assets your worked so hard to build.

Build Your Own Business

This requires considerable planning to succeed. Many resources are available to people thinking about starting a new business. Do your research. And then do some more.

Make sure your financial house is in excellent shape. Be careful not to underestimate the financial drain this can create. While you are thinking about your possible new business, be sure to meet with your financial advisor to re-evaluate how your investments are positioned. You may need more liquidity than you thought.

Accidents and Illnesses

Accidents and illnesses can be major disruptions. Complacency and optimistic thinking can lead us down the path of delaying the decision to protect against such events.

We all have insurance to protect our home and car in the event of a catastrophic accident. But when is the last time you talked with your advisor about protecting your income? How prepared is your family for an accident or illness that prevents you from working?

Disability income insurance, long-term care insurance, and life insurance should all be part of your financial planning conversations.

A will, power of attorney, and estate plan are important considerations that can provide the logistics that allow trusted friends or relatives to make decisions on your behalf if you are unable. Talk with your advisor about putting these in place.

Retire with Dignity

You may have developed a solid relationship with an advisor who used on an accumulation strategy to help you grow your assets so that you could retire. One of your biggest challenges lies right in front of you, and you might not be able to recognize it. You need a new strategy so that you can take income for the rest of your life – without having a job.

Before you retire, you should re-evaluate your advisor’s ability to help you map out a distribution strategy. The accumulation strategy that served you until now is probably no longer enough. You will face new risks, and may need new strategies to address them.

When you retire, your focus may shift to providing for the needs of others in a few decades. The wealth transfer process can be full of surprises. Many of these can be avoided through proper planning. Seek the counsel of your advisor for strategies to maximize the impact of your assets.

Eldercare

Healthcare costs are likely to increase substantially in your later years. It is important to plan well ahead for them. Many options exist for covering long-term care expenses. It is important to plan for these well in advance. Be sure to visit with your advisor throughout your retirement and discuss how your health is changing, and any concerns you may have. You may need to change up your investment strategy from time to time.