“Set it and forget it?” That’s not financial planning.
Especially after sharing your life with a global pandemic for a few months.
Authorities and talking heads have been warning us of the irreversible transformations we’ll find when we come out of our cocoons: changes to how we’ll work, learn, consume, communicate and socialize.
But even before coming out, while still sheltered indoors, significant changes have been brewing in how we look at our values and how we want our post-pandemic lives to look.
This review is leading to financial reinvention.
Forced changes “outside” cause subtle changes “inside”
Essential workers may have seen their lives become more harried. But many other people found they had time on their hands for the first time in a long time. You may have been sent home to work and no longer had to commute. Or you already worked from home but were no longer allowed to go out for distractions. Or, the worst case, you lost your job.
And in that absence of “busy-ness,” some of you were given the opportunity – and the motivation – to re-evaluate what your lives had become.
Words like “value” and “purpose” took center stage. And some aspects of life that had been on autopilot went under the microscope.
Five aspects received most of the attention.
How much have I cared for my health?
The Corona crisis has made everyone stop and assess how healthy they are because suddenly, it matters.
If you are younger, you may have accepted for the first time that you are not invincible. Your thoughts go to the health insurance coverage you have and whether you shortchanged yourself. You may have discovered that homecooked meals can be not just good for you, but fun to prepare. (And one of the building blocks of a healthy immune system.)
And your job, how has it affected your health? What about stress? And the impact of poor sleep? Can you continue the present pace long enough to fund your retirement? Or will you burn out?
And if you are older, are you shocked that anyone over 65 is considered elderly? And when did your borderline diabetes become a co-morbidity? You are constantly reminded of your vulnerability in the face of the virus. Yet that vulnerability is highest in assisted-living facilities. Are you having second thoughts about your position on long-term care insurance?
Does my housing reflect my real needs?
Spend 24/7 in your home for week after week, and you’ll have a clear idea of whether you love your home or not. Your needs may have changed over the years while you weren’t watching. Or they may have changed permanently because of the pandemic.
What was once a delightful open plan house may not provide the private carve-outs needed if space is being shared by working adults and online college students. Or you may have too much house, but love it for the memories it holds. Housing is a significant element in your retirement plan. Careful analysis may show that a change in housing changes everything for the better.
Does my spending honor my savings plan?
Online spending is effortless. But spending is much more satisfying when it results from seeing a “must-have” in a store or when you are out and about. Impulse purchases can put a dent in savings goals. So can a regular restaurant or bar tab on the way home from work.
Yet once those triggers are absent – because you are sheltered in place – is consumerism somewhat dulled? Are you happier spending less? Have your priorities shifted after sharing space more intimately with loved ones – to now wanting a larger emergency fund, for example?
Or does simpler living make it possible to work a less-stressed job with shorter hours? And how would that affect your ability to save for retirement?
Do my investments align with my values?
Investment decisions are made over the decades and may never be revisited. Those made years ago for 401(k)s had limited investment options. And target-date retirement funds were easy solutions for IRAs. Even if greater thought went into more recent investment choices, there may be older ones that could be put to more satisfying use.
The pandemic has ignited a greater interest in the role of money. It has reinforced the concern of many for the human condition and environmental sustainability. Have you thought about ESG (Environmental, Social, and Governance) investments? Would you like your portfolio to represent more than just its return and taxable status in retirement?
What legacy would I like to leave?
The Corona crisis made the concept of death feel very real for many people. No longer was the idea of a legacy way off in the future. And the slower pace of being “sheltered in place” offered the time to ask more profound questions: What is your purpose? What mark would you like to leave for your loved ones, your community or a favorite cause?
And how do those thoughts match your pre-Corona savings plan, investment strategy, and estate plan? Would you like your post-Corona ones to be different?
Working with a financial planner to match plans to values
You may be giving serious thought to the concept of planning for the first time. Or you may have created well-thought-out plans, but now realize the pandemic has caused you to rethink them.
Acknowledging your current values is probably where the pandemic – and its side effects – will have had the most significant impact. It doesn’t matter if you just hadn’t paid attention to how your values had changed over time or if they were changed by the Corona experience itself.
Whatever the reason, you are being invited to focus anew on what you value – what you want out of life and what is essential for your happiness. (And for the happiness of your loved ones.) What society dictates has no place in your decisions. Mindful choices do.
The next step is to find a CERTIFIED FINANCIAL PLANNER whom you trust, in case you don’t already have one. And since planning is not a one-time event – not “set it and forget it” – you want to find someone you like. Life throws curveballs, so you want someone who knows you and who can be there to help you fine tune your plan when needed.