Seven Life Events That Will Impact Your Financial Plan

One of the benefits of having a couple of days off a week is that it affords me the opportunity to read more. I came across an article in the Journal of Financial Planning August 2021 issue entitled “How Life Changes Affect Client Behavior,” that confirmed my belief that our clients are increasingly relying on us not just to help keep their financial house in order, but to help them weather some of life’s most significant transitions.

While some clients may believe that we spend most of our time finding ways to either make them more money or to implement strategies that will save them taxes, “Dubofsky and Sussman (2009) found that planners spend on average 25 percent of their time on nonfinancial issues, and that 74 percent of planners estimated they are spending more time addressing nonfinancial issues.”

Amy Florian, CEO of Corgenius, a company that according to their web page trains “financial service professionals how to support their clients in times of grief, loss and transition” notes that a change in a client’s role “can cause clients to feel grief as they grapple with what their new role means for their identity.” She identifies seven life events that can lead to a role loss:

1. Graduation– School is no longer part of a student’s structured environment. The world of work can be radically different.
2. Starting a Family– Disconnecting from the “single’s scene” is merely a tune up for what life is like when you have kids. Your prior role typically becomes subservient to the kiddos.
3. Job Changes– Leaving behind colleagues as well as an identity tied to your job and starting all over in a new job can produce role loss induced grief.
4. Marital Status– The death of a spouse or divorce can be some of the most wrenching experiences in your life. The complexity of relationships that can change with that can make finding your bearings intensely difficult.
5. Loss of Income– Losing the role of provider or productive member of society can be difficult enough. When combined with a possible role change at home and the attendant financial difficulties, loss of income can be a real game changer for singles and couples alike.
6. Retirement– The loss of identity and the search for continued relevance, coupled with a loss of self-reliance in terms of funding your lifestyle can be a cause of depression and a sense of being untethered from life.
7. Caregiving– According to Florian, “caregivers can get so wrapped up in caring for another person that it becomes part of their identity…When that person dies, they don’t know who they are anymore,” she said. “They don’t know what to do with themselves. They feel they have all this love and care to give, but there’s no one there to give it to.”

We are all going to experience most of these transitions at some point in our lives. As a planner, one of the most important benefits we can provide to you during the inevitable times of transition, is offering perspective on your past, and to serve as a trusted advisor as you explore where life next takes you.