“When I changed careers to become a financial planner, I didn’t know what it would look like and what my day-to-day activities would be. I just knew it was something I was drawn to – a gut feeling. So, after considering the possibility and doing a lot of research, I decided to move forward. It has been a fantastic learning, teaching, and helping journey.”
– Sheila McGinn, CFP®
Think of your life as a journey. It’s a long trip with many decisions and unexpected detours. And right now, everyone is at a different point on their journey. The path isn’t the same for everyone, and neither is the destination. Your unique circumstances and experiences drive what you do, meaning your path will go in a different direction and take more or less time to traverse than those around you.
Everyone has their values and goals. These are a significant part of your life journey and influence your steps to get where you want to be.
Connecting Your Milestones with Financial Goals
Most of your life milestones will have some sort of financial component connected to them. It may be helpful to think of financial planning as planning the trip and ensuring you have enough financial resources to get you where you’re going. And the great news is, this isn’t something you have to tackle alone. A financial planner can serve as your ally, guide, and help you through these exciting life events.
As you consider your specific milestones, you must begin by creating a solid financial plan. To do so, work with a financial planner to establish short- and long-term goals. Make sure they align with your values and bring fulfillment to your life. Once you have some goals laid out, you can also use them to create corresponding financial goals.
For example, if you’d like to achieve a work-optional lifestyle and retire early, you’ll need to determine how much money is necessary. If you’d like to move to another part of the country, how much will it take to maintain your current quality of life? If you’re moving to an expensive metropolitan area like New York City or Los Angeles, you may need to prepare to spend more on your housing, transportation, entertainment, etc.
Build a Foundation With Your Financial Plan
Now that you have some goals and milestones established, you can start to put those goals together to build a financial plan. You and your financial planner will use this plan to help you transform your wealth into personal fulfillment. By aligning your resources with your short- and long-term goals, you can make positive, forward-focused decisions that will make you happy and satisfied with your life journey.
Some of these questions could include:
How do we pay for a college education?
Federal student loan debt sits at around $1.6 trillion, with borrowers carrying, on average, $35,210 in debt per person.1 That being said, it’s no secret the cost of college is continually rising. Whether your child is still in diapers or approaching graduation, setting them up for a healthy financial future is likely top of mind.
Your financial planner can work with you to discuss savings and investment vehicles specifically designed to cover education costs, such as a 529 plan.
Why is my tax bill so high?
Taxes will likely be one of your most significant lifetime financial obligations, but that doesn’t mean you should pay a penny more than you’re legally obligated to. There are many ways to keep more money in your pocket and work toward your long-term goals, from tax-advantaged retirement savings vehicles to tax planning for vested stocks from your employer.
If I retire early, how will I cover my medical expenses?
Say you’d like to achieve a work-optional lifestyle and retire before you become eligible for Medicare. If you can no longer use your employer’s health insurance plan, you’ll need to determine a way to obtain coverage without blowing your budget off course. Your financial planner can discuss your options, such as joining a spouse’s workplace plan or perusing your state-sponsored marketplace.
Can I take time off of work to travel?
Whether it’s for travel, pursuing a passion project, raising kids, or renovating your home — there are plenty of reasons why you may want to take some time off in your career to do something other than work. But putting a pause on steady pay takes careful planning and consideration.
Aside from your salary, other factors are at play, including insurance, employer-sponsored retirement plans, employee stock options, and more. Considering how much you’ll need to cover expenses while away from work and what money you might be leaving on the table by exiting the workforce for some time is essential.
Am I saving enough for retirement?
Our client’s most significant question is, “Will I have enough?” The earlier you envision leaving your job for good, the more money you’ll need to maintain your quality of life through retirement. Nobody wants to have to reenter the workforce halfway through retirement because they didn’t go into it with a proper plan in place. Your financial planner will work closely with you to put a price tag on achieving a work-optional lifestyle and establish the strategies needed to achieve it in the desired timeframe.
If something happens to me, will my family be okay?
Your wealth is only as substantial as your plan to protect it. Uncovering the “what ifs” and building a safety net should be a cornerstone of your financial plan. Your financial planner can help you proactively protect your family from the unimaginable by implementing custom safeguards and contingency plans to meet your needs.
Of course, these questions open the door to even more questions — am I saving enough? Are my goals attainable? What am I forgetting? Have I invested the right way? Like most things, there is no single correct answer (and no guarantees). Your life journey will be full of twists and turns, but the more planning you put in now, the more control you have over your future.
We encourage you to reach out and schedule some time to talk to learn more about the role financial planning can play in helping you answer life’s biggest questions.
Sources:
12023 Student Loan Debt Statistics: Average Student Loan Debt