How Financial Planning Helps You Navigate Lifestages

What value does financial planning brings to your life? Ultimately, it helps you plan for the unexpected in life so you remain financially sound.

This article explores the different life stages, highlighting how planning can benefit you financially along the way.

How Financial Planning Helps You Navigate Lifestages

The Game of Life and Financial Planning at Every Age

Are you familiar with the Game of Life board game? The modern (1960) version colorfully compresses the various stages of life interspersing all kinds of life moments such as new babies, financial challenges, insurance payouts, and other unexpected forks in the road.

In the real-world game of life, much is the same, but with sound financial planning throughout the different stages of life, you can have much more control over how much you retire with (as opposed to those random tiles you collect throughout the board game).

And, along the way, you might consider having a trusted financial advisor to help give advice and direction on important investments and other monetary decisions.

Lifestages and Financial Challenges

Here are a few of the primary segments of an adult’s life and the financial decisions associated with that general age.

Your First Real Job: Credit Cards, Loan Payment Plan, Retirement

The first “real” job after college or other educational training is a big deal. That starting salary seems enormous but is quickly levied by the realization of the mountain of student loan debt, apartment rent, credit card debt for all the things your student loans wouldn’t cover, car payments to get to the job, and other costs not to mention attempting to build good credit.

Financial planners play an important role in this step as they can help set up a responsible credit card and loan payment plan in accordance with your budget.

This is also the optimal time to begin investing in retirement. Yes, it sounds crazy when cash flow is limited, but it’s also best to start early by participating in a 401(k) plan. A financial planner can help best determine if a nonliquid tax-deferred IRA is appropriate or, rather, a Roth IRA.

>> See Why Staying Invested Is So Important For the Long Run

Getting Married and Jointly Managing Finances

Marriage is a big deal emotionally. It’s also a contract that more or less ties two individuals’ financial assets together.

Newlyweds may have managed their money differently from one another in the past, but marriage requires joint financial decisions. It’s important when getting married to work through a collective budget, set financial goals, and set some general guidelines on how payments will be made.

Affording and Educating Bundles of Joy

Kids don’t always follow the new job or marriage, but often they do. And when they do, they don’t come cheap.

According to the Washington Post in What does it cost to raise a child?,

“Raising a child is expensive. From the day your baby is born until the day they turn 18, your family will spend about $310,605 — or about $17,000 a year, according to a new Brookings Institution analysis of data from the U.S. Agriculture Department.”

That $17,000 a year doesn’t include the cost of secondary education or pregnancy and giving birth.

Just as your early career is the best time to start saving for retirement, when a child is born is the best time to start saving for college.

Look into 529 education plans that offer the chance to grow funds over time; so long as those funds are utilized for education expenses they’re tax-free.

Plan Your Retirement in Your 40s and 50s

Retirement sounds like a golden opportunity for many. Perhaps, you think it’s a chance to reap the fruits of your labors and enjoy the finer side of life.

This is an unlikely scenario if retirement isn’t properly prepared for. In your 40s and 50s, you should honestly assess your readiness for retirement and define the major goals ahead.

You’ll want to mitigate as much risk as possible; at this stage in the “game,” there’s not a lot of room for big asset missteps. It’s important to have a clear strategy about how to reach your financial goals and a knowledgeable financial planner to help you get there.

Retirement May Start in Your 60s

By age 63, half of the U.S. working population is retired; nationally 62 is the general youngest average retirement age and 65 is the oldest average. A low six percent of Americans work up into their 80s.

While the average retirement age is shifting to later in life, even slightly, the average life expectancy of the average man who reaches 65 is expected to live until age 84.3; for women, it’s 86.6.

With close to 20 years in retirement, you’ll discover different chapters of retirement.

  • The first part of retirement may be very active filled with travel, volunteering, and even working part-time. At this early retirement stage, you want to ensure your estate plan is up-to-date and understand how to convert pensions and retirement savings into income.
  • The latter retirement years usually mean a set of different goals, such as making savings last and considering options to deal with disabilities or assisted living.

Throughout the different stages of life, your financial goals will shift as major life events occur. When changes occur, review your financial plan with a financial planner to ensure your assets and investment vehicles are still working for your plan.

Financial Planning References & Resources

Here are a few additional resources about the value of financial planning and navigating life stages:




How Financial Planning Helps You Navigate Lifestages

What’s your reaction to navigating life stages? Do you see financial planning benefitting your life?

Don’t hesitate to reach out with any questions.

Thanks for reading.

Image credit: The Game of Bowls, 1790s, by Giovanni Domenico Tiepolo (Italian, 1727–1804), Cleveland Art Museum

Note: This blog article is intended for general informational purposes only. Nothing in it should be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. Investing involves risk.

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.