October 7, 2020. By Courtney Summa:
One of the most powerful planning tools we have as individuals is the power of visualization. Visualization can help us define goals and stay motivated as we work toward them. Visualizations, however, are to be treated delicately as they are ultimately perceptions that we can twist and alter to suit our desires. Many couples and individuals, for example, can see themselves working well through their retirement, siting this as a significant source of income during their later years. The fact is, however, that very few retirees with this goal note that it is achievable in reality. Even with less physical jobs, the mental toll that work takes can seem rigorous in later years when motivation dwindles.
When constructing a retirement plan, several scenarios should be used to help visualize how the future may play out. These should include multiple income stream scenarios to account for any possible shortfalls. A common misperception of seeking the help of a financial planner or advisor is that they will try to restrict your personal plans or spending desires when their goal is quite the contrary. Their role is to help you visualize, build, and implement a retirement plan that supports your desires, values, and vision.
Budgeting is only one contributor to values-based financial planning:
Visualization: What does your ideal retirement look like? Pick an ordinary day in that future, and imagine what your schedule looks like from the time you wake to the time you return to sleep. Do you have new hobbies? Where are you living? Do you see your health and personal care activities changing?
Communication: Are the desires of your spouse or partner in line with what you have visualized for the future? Have you been completely open with your finance and estate professionals? Being open and honest with these key people in your life makes a big impact on the final outcome of your retirement. Once you let your guard down and open up, you will have the advantage of multiple points of view, strategic recommendations, and support from those who care about you the most.
Organization: Here is where the budgeting and spending plan comes in. Getting organized financially can be a daunting task, however doing so with values-based goals in mind can be rewarding, and even exciting. Working with a CERTIFIED FINANCIAL PLANNER TM professional can ease the process. A CFP® professional will make information gathering easy, and will organize, model, and interpret all of the data for you, with your goals in mind.
Implementation: What needs to be done to make sure that your plan moves into action? Who should be held accountable? Discuss the best ways to implement your plan with your advisor or planner to break down the data into reasonable, digestible steps that will adjust as you move through your timeline.
Adaptation: A good financial plan is a living, breathing thing. Just as your dreams may change over time, so will your financial plan – and that is ok! If you have a change of heart, envision a new goal, or even indulge in an impulsive purchase, there is no need to scrap the plan, but instead incorporate the changes and set a new path forward. Otherwise, you will be sticking your head in the sand, setting yourself up for an anxiety in the future.
Use the above graphic as a guide if you are yet to work with a financial professional, or don’t know where to begin in your family discussions surrounding retirement. There is no need to be formal. Use the terms loosely and as they apply to you. When you are ready, seek the help of a CFP® professional to dive into the details and set the plan in motion. It all begins with the power of visualization.