Beyond Retirement: Building your financial life around life’s milestones
By Retirement often takes center stage as the ultimate financial goal in this industry. And rightfully so — investing today helps to ensure a stable tomorrow when paychecks ultimately stop arriving in our checking accounts. As financial professionals, guiding our clients towards this pivotal moment is a significant aspect of our work.
Early in my career, when I would ask young people about retirement goals, their faces clearly showed that it wasn’t even on their radar. Understandably, their thoughts revolved around career advancement and family, not distant retirement plans. There are so many life events happening between your 20s or 30s that I learned we need to be having an entirely different conversation with young professionals — one that revolves around fundamental questions like:
- What significant life events should you prepare for?
- How do you envision your lifestyle?
- Where should you allocate your financial resources?
Responses vary widely. Some express desires to purchase a home, start a family, enjoy regular vacations, or pursue career growth, while others prioritize early retirement due to demanding yet lucrative jobs. Most of the time, whatever they say to me can be achievable with strategic financial planning.
Breaking them into manageable chunks over 5-10 years, I help clients identify adjustments to help them achieve their objectives while working towards their long-term financial security. This often involves automating savings, getting your entire 401(k) match, starting a Roth IRA, and having an emergency fund. The biggest thing is to make sure your money is working toward your goals and not against them. Making slight adjustments with your hard-earned dollars can go a long way with time on your side.
The ultimate tradeoff for young people throughout their careers is trading their time for money, meaning the definition of retirement is you can now reverse this tradeoff in your favor. Building the proper foundation early in your financial journey puts time on your side and helps you prepare for your next big life event. In working with my client families, I have found that making intelligent financial decisions around significant life changes is what allows us to reach our ultimate retirement goals, whatever those might be. Maybe 10 years down the road, you start thinking about how you might retire at 55. Maybe you love your career and want to push retirement back a bit. What matters is that we’re creating and following a plan that will help lead toward whatever success looks like to you.
So, put money aside for a second, and ask yourself, “What is my ideal lifestyle?”. Then follow up with, “Is my hard-earned money planning for this lifestyle?” If not, please feel free to reach out to us anytime.
Article by Dillon Harper, Wealth Advisor at Family Financial Partners — a financial services firm in Lexington, Kentucky.