Planning For Retirement? Understanding Your Perspective On Life Can Help


When most people think about investing for retirement, they think about a financial investment: How much am I saving? Where is it being invested? What kind of return can I expect?

Planning your financial investment before you retire is not bad, obviously. But this perspective by itself misses the whole picture. You also want to consider where you’re investing two other precious resources: your time and your energy. Are there areas where you don’t feel satisfied, such as your health or relationships? You want to bring awareness to these areas well before you retire because retired life tends to reflect our pre-retirement priorities.

To help my clients through this process, I use a Money Quotient tool called the Wheel of Life. This exercise entails filling out a circle with several different spokes that represent areas in your life: family, finances, health, leisure, learning, inner growth, home, community and work. It can help you pinpoint areas in your life where you are dissatisfied or where you could benefit from some action. In this article, I’ll share how doing this type of exercise changes your perspective on life (not just retirement) and how sharing your results can be beneficial.

Where are you dissatisfied with life?

The last time I did this exercise, I realized my biggest drop-off was the leisure section. Right now, I’m focused on work and my family responsibilities. Being a single mom, it’s up to me to pick up my daughter from volleyball practice.

Doing this exercise highlighted dissatisfaction in an area of my life that I didn’t realize was there. It forced me to start considering small shifts I could make to improve my life in that area, such as soaking in the tub with a book once a week or taking up a new hobby.

That’s the beauty of taking a look at your current perspective: It brings clarity to your life and offers you a chance to consider short-term goals that could make a long-term difference. Its value is ongoing, as well. You should consider completing an exercise like this at least once a year, as your results will inevitably change. As you work on improving one area of your life, other areas of improvement will likely pop up.

Mapping out your current life satisfaction is a precursor to a discussion of financial goals. It’ll help you articulate what’s important to you and begin to translate those important items to both financial and nonfinancial goals. In other words, it can help you better choose how to invest both your time and money.

What should you do with your results?

Let’s say your results show you’re dissatisfied in the areas of family and leisure, and to address these areas, you decide to plan a family vacation to Europe.

If you have a financial advisor, you should explain your new goal of a family vacation. They can help you examine your financial plan to see what trade-offs you can make to afford that trip. If you aren’t working with an advisor, you could open a savings account and adjust your spending habits to start putting money toward that trip.

Let’s say you’re approaching retirement and the area of dissatisfaction is your home. An advisor can help you determine if downsizing would be the right choice. Many people want to downsize to simplify their life in retirement, but since you’re no longer earning an income, you have to be careful with a move of that size. Downsizing doesn’t always mean less expensive.

You must take small steps to address the areas of your life that need investments of your time, energy and finances. Otherwise, things won’t change. The results from a life perspective exercise are only helpful if they lead to action. Then again, you have to be smart about the choices you make so you don’t compromise your retirement planning or spending.

Share your perspective. 

Sharing your results with your significant other can help strengthen your relationship, even if family isn’t an area where you feel dissatisfied. Returning to the example above, if your dream is to go on a family vacation and your partner never realized you had that dream, it can become a point of connection as you brainstorm ways to save money for the trip.

An exercise like this can also help couples get on the same page with their finances and plans for the future. Often, the couples I work with have different views on what they want life to look like in the future. Or, one person thinks everything is fine, and the other is terrified that they may not be in good financial shape at all. Understanding life perspectives brings a newfound level of clarity to situations like this and can help facilitate a discussion focused on life, not just money.

Sharing is also a great way to create accountability. Analyzing your life perspective should be the beginning of a brainstorming session where each area of your life is further explored. What would make some areas better for that person, and what are specific actions that can be taken to bring that improvement about? Once actions are identified, they can be fed into financial plans.

Find clarity and purpose in your planning.

When I first talk to clients about retirement, I often get a “deer in the headlights” look. People know they want to retire, but many don’t know what they want retired life to look like. Or they find the process so overwhelming, they just blindly put money into their 401(k).

If you’re unsure what you want retirement to look like, an exercise like the Wheel of Life can help you find clarity and purpose in your planning. If you’re overwhelmed by the whole process, this gives you a starting point that’s more manageable than starting with various investment options. Examine your life, and look for areas where you want to invest more time and energy. Then you can design a plan to support those choices now and into retirement.

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