“Rick, I want my last check to bounce.”
I hear this sometimes from clients who hope to calculate their investments so precisely. They say, “I’m 85, I don’t have a long-term.”
But, as I told more than 150 attendees during Parsec’s Longevity Forum recently, I respond to these clients that even if they don’t have a long-term, their money does, thus the importance of holistic financial planning.
Parsec’s financial advice has evolved over the years with clients where we are increasingly focused on working with them on the aspects of making decisions, in particular when emotions are high. This is called behavioral finance.
There is a certainty for uncertainty, thus it is critical to have a very good plan in the face of adversity. The brain is emotionally reactive and moves more quickly than logic when the fight/flight/freeze instincts take over.
Thus, instead of focusing on the negativity and ongoing news cycle loop I encourage clients to focus more on positive feedback loops.
As I joked to the attendees, how often do you come to a financial event where the focus is on happiness?
The upside, especially for those nearing or in retirement, is that based on the “U curve” shown here, their happiness is at an all-time high. Personally, I’m turning 50 this year so at least I have something to look forward to!
Following are my seven tips to help ensure financial happiness in retirement:
- Having the correct amount in cash: You want to have enough cash, but not too much!
- Having the correct asset allocation
- Feeling free from being debt-free. As Parsec founder Bart Boyer says, becoming debt-free is like being a kid again with that sparkle in your eye!
- Monitoring spending and establishing control
- Having clear communication with spouse or partner: I suggest switching roles with your partners. For example, if one spouse always handles the bills, switch it up.
- Investing in an active social life and hobbies
- Engaging in social spending versus consumer/materialistic spending
Get started by aligning your values and goals with behaviors:
Aligning values to goals and then to behaviors helps you create the best backdrop for finding financial meaning. It is an intentional process of doing things on purpose, with purpose. I suggest making some goals based on aspirational life. They are the enduring priorities that can help set the stage for a purposeful life by recognizing what’s most important to you and establishing a goal that’s in alignment with those values. Download Parsec’s worksheet to start aligning your values and goals with behaviors.
For those who couldn’t make it to our event, feel free to download my full keynote, “Longevity and Happiness.”