<h1 id=”why-lifestyle-planning-is-the-most-crucial-element-of-financial-planning”>Why Lifestyle Planning is the most Crucial Element of Financial Planning</h1>
Why Lifestyle Planning is the most Crucial Element of Financial Planning
One of the keys to success in financial planning is to be fully aware of what’s going on in your life now and in the future. By deeply understanding yourself and your goals in life, you’ll be in a good position to put a financial plan in place that supports your life plan.
Have you ever noticed that when some people retire, they make a point of doing the daily crossword or even the sudoku? As people, we like to feel that we’ve had some mental challenge. It’s what nature needs…
I say this because when we transition from work to retirement, we can understand the subtle nuances in human psychology and appreciate what working life brings to the table. Then we can plan our lives in such a way as to give us the best chance at leading a fulfilled retirement.
This article is for people who have been in work for a long time and are starting to ask themselves if they need retirement advice.
Here we take a deep dive into some aspects of working life that you’ll need to think about and prepare for if you’re considering retirement.
Are you retiring from something or to something?
It’s easy to assume that you’ve become dissatisfied with your current work and can’t wait to ‘not do this anymore,’ or that you’re looking forward to retiring and spending more time doing what you like.
However, it is not always a binary connection; there are generally components of the work that you love and that you would miss when you quit.
For a significant portion of our lives, we have become used to trading ‘time for money.’ The fact that we’re moving away from a direct interaction that, for better or worse, has kept us on a consistent course is critical when we’re transitioning from our working life into retirement.
Managing your professional identity
Historically, a person’s surname served as a proxy for their occupation. Today, it is not popular to keep someone’s contact information in your phone as their “first name” and some type of memory jogger, such as where you met them or what they do, in addition to their contact information. For example, ‘Bob golf club’ or ‘Diane spin class.’
The argument is that our identities are developed in the context of our activities. We are influenced by what others think of us both internally and externally.
When you’ve been in a career for a substantial amount of time, you’ve developed a strong understanding of your field. Individuals inside the company turn to you for direction, and people outside the organization will be aware of what you do and recognize you as a professional and the value you can provide to their lives via your work.
Some individuals can see retirement as a loss of their social position, an important element of their identity. There will no longer be a “Suzanne the Finance Director” but just “Suzanne.”
It goes without saying that being aware of and comprehending this will help you to ensure that you have the appropriate financial strategy in place.
The impact on your social hub such as work
Throughout your working life, you will meet individuals and form friendships with people who are related to your job function. The practice of socializing with one’s coworkers outside of the job is perfectly acceptable in today’s society.
When you leave your job, it is possible that you will no longer be a member of the ‘work click.’ You don’t have the opportunity to discuss what’s going on at work, and you find yourself falling out of the social patterns that are linked with your employment as a result.
Retirement provides an opportunity to try new activities and meet like-minded individuals, but managing the financial aspects of that transition is just as important as being conscious of the emotional ramifications and how you’re going to feel when you do.
Always remember that it is possible to actually retire and still work.
The perceived link between your purpose/cause and mental health
Sometimes people go to work simply because it is their job and provides a means of paying the bills. Still, other times they go to work because it is their mission or their cause, and it provides them with emotional nourishment and a salary.
When preparing for retirement, it’s critical to evaluate the implications of this move as well as how you’ll deal with the situation moving forward. It is critical to prepare for this shift as part of your overall life strategy.
You may choose to continue giving back in a volunteer capacity, or you may wish to teach to remain intimately involved with the cause that gives you meaning.
What retiring may mean for your physical health
For much of your working life, you’ve been used to a certain amount of physical activity.
Some people’s occupations are quite busy and hands-on, and the concept of retirement scares them. The idea of ‘sitting about’ and doing nothing is completely terrifying to them, so they put off retiring until later. They are the kind of folks that like being physically active.
On the other end of the scale, you may have spent your whole working life confined to a desk and realized that it has taken a toll on your health, making the thought of being able to be more active appealing.
Being conscious of that lifestyle shift and preparing for how you’re going to handle it can go a long way toward assisting you in managing the financial planning portion of your retirement years.
We’re innate problem solvers.
Every day at work, no matter what we do, we are tasked with finding solutions to problems.
Every day brings with it new challenges that we must face and overcome. Beyond mental effort, we are built to compete, and problem-solving is a natural way of competing; we resolve issues and are good at what we do. In exchange for our efforts, we are financially compensated.
It’s critical to consider what you’re going to do in retirement and how that will satisfy your need for mental and physical stimulation.
Triggers that make you stop and think
There are a lot of scenarios that may cause you to stop and take stock of where you are. You may be approaching 50, and it hits you all of a sudden that, ‘you know what, I think its time for a change.
There are lots of other triggers that cause people to consider retirement like:
- The children have left home
- Changes in physical health
- May want to spend a bit more time with children and/or partner
- Come to realize that time is limited
- May be facing redundancy
- There may be changes in the workplace, and the company is heading in a different direction
- With covid, a lot of people took the time they never had before to reconsider their lives
- Many, many more.
The point is you may never of considered retirement before, or you could have been thinking about it for a long time.
Whatever’s caused you to stop and take stock, the technical questions surrounding finance in your retirement can only be answered when you’ve answered the bigger questions. That matters to you.
To answer those big questions properly, what do I want to do in retirement? It’s important to understand the impact your working life has had on you.
By understanding and planning your life, the questions you have surrounding finance and how you’ll achieve that lifestyle will become a technicality that can be resolved with relative ease.
If you are looking to access your pension take a look at some of the following articles….
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Over £190 million
We're trusted to manage over £190 million of our clients funds
We're authorised and regulated by the Financial Conduct Authority
The unique PlanHappy Lifestyle Financial Planning process has been specifically designed to help you get what you want
"I cannot find fault with the service we received. From the warm yet professional welcome to the finanical adive we were given. Yo as a company should be proud of the service you are providing" Mr. W
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