What do you want your money to accomplish?
It sounds like a simple question, but it can be difficult to answer. Many people spend decades saving for retirement without spending much time thinking about what they want retirement to look like.
In this episode of Kitchen Table Finance, Nick Nauta is joined by Cole Williams for a listener Q&A about financial life planning.
They discuss how the life planning process can help people identify what matters most before making decisions about investments, taxes, retirement spending, and other parts of their financial lives.
What Do You Want Your Money to Accomplish?
Retirement planning often begins with numbers. How much have you saved? When can you retire? How much can you spend?
Nick and Cole explain why SRB likes to begin with another question: What do you want your life to look like?
Nick compares financial planning to putting together a jigsaw puzzle. Before you start arranging the pieces, you need to know what picture you are building. Your vision for retirement is that picture. Once you understand what matters most, the financial pieces can begin supporting that vision.
Enjoying Today While Planning for Tomorrow
Saving for the future matters, but so does using your resources during the years when you can enjoy them.
Cole discusses treating retirement saving as one part of a larger life strategy. Some goals may be easier to pursue today than decades from now.
Nick explains how this thinking can affect retirement decisions. A strategy that produces a larger future account balance may not always support someone’s personal goals.
For one person, leaving more to the next generation may be a priority. Someone else may want to spend more during the earlier years of retirement while they are active and traveling.
The right plan depends on the person.
Financial Independence Does Not Mean You Have to Retire
What happens when you have enough money to stop working, but you are not sure you want to?
Nick suggests thinking about financial independence as making work optional.
Some people enjoy their careers and want to continue working. Others may prefer fewer hours, a mentoring role, volunteer work, or a completely different type of work.
Retirement does not have to follow a standard formula.
The question is how you want to spend your time when money no longer requires you to work.
Can Life Planning Change Financial Decisions?
Nick and Cole believe it can. When you know what matters to you, financial choices have a clearer purpose.
Nick shares a personal example. When his children were younger, he took Fridays off during the summer so they could spend time together. He called them “FriDads.” That choice may have meant working less and earning less. It also gave him something he valued more: time with his children while they were still young. That is the type of decision financial life planning can bring into focus.
Are You Saving Too Much?
Some people reach the years before retirement and discover they may have saved more than they expected to need.
Cole explains how he approaches saving by setting a target, putting part of the process on autopilot, and allowing room to enjoy the remaining resources. Nick adds that some people approaching retirement may be able to reduce contributions and use more of their income today. For others, maintaining a larger financial cushion provides the confidence they need to enjoy their money.
There is no single savings number that works for everyone. A financial plan can help you understand what your goals may require.
The Misconception About Financial Life Planning
Most people do not walk into a financial planner’s office asking for a life plan. They usually arrive with a practical question: Can I retire?
Nick explains why answering that question is only part of the conversation. Retirement is a major life transition. Thinking about how you will spend your time, what gives you purpose, and what you want to experience can be just as meaningful as reviewing the financial numbers.
Cole also shares how these conversations can help couples discover goals they may never have discussed together. Sometimes one conversation around the table can uncover something that has been sitting in the background for years.
Contact us today!
If you are approaching retirement and wondering whether you have enough, when you can retire, or what your next chapter could look like, you do not have to sort through those questions alone. The team at Shotwell Rutter Baer can help you connect your finances with the life you want to build and create a retirement plan designed around what matters to you.
Contact SRB today at 517-321-4832 or email us at info@srbadvisors.com.
Don’t forget to subscribe to our channel for more bite-sized financial and retirement tips. https://www.youtube.com/@shotwellrutterbaer.
Resources
Specialized financial planning for State of Michigan employees who want to make the most of their benefits and retire with confidence. https://srbadvisors.com/state-of-michigan-employees/
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