Get Your Stuff Together (Before You Need To)

In our line of work, we speak with people going through all sorts of changes in their lives—some exciting, some challenging. A lot of our work revolves around one transition in particular: going from working your entire adult life to a new life with more freedom and choice.

Now, I could wax poetic about how the only constant in life is change, but I’m not going to do that. We all know it, and we’ve all heard it over and over.

Some changes are planned—retirement, changing jobs, sending kids to college. Others aren't—the death of a loved one, an unexpected job loss, an illness or some other event that suddenly changes the direction of your life.

In my experience, the people who handle change the best are the ones who are prepared for it. That applies even when the change itself is a surprise.

But what does being prepared actually look like?

I think it starts with picturing what life is going to look like on the other side of a major change. What's going to be different? What will stay the same? What decisions will need to be made? And, most importantly, what can you do today to make that transition easier?

Take retirement, for example.

It's probably not a good idea to simply wake up one morning and say, "I'm retired now." Retirement takes some planning, and that planning shouldn't start with your investment accounts.

It should start with your life.

What are you going to do with your time? Travel? Volunteer? Spend more time with family? Tinker in the garage? Work in the garden? Whatever makes you tick, you first need some idea of what you want retirement to look like.

From there, you can estimate what that lifestyle will require in terms of income. Once you know that, you can look at Social Security, pensions and other income sources and determine how much your savings will need to provide.

Step by step, a plan starts to come together.

I recently went through a major transition myself when I started my own business. That required a different kind of planning, but the process wasn't all that different.

I had to think through the business plan, finances and location. How would I attract new clients? What roles would I need to fill? What needed to be in place to create a great experience for clients?

I couldn't know exactly how everything would turn out, but I could think through the possibilities and prepare for as many of them as possible.

Unexpected changes are different because we don't get to choose when they happen. But that doesn't mean we can't prepare for them.

What happens if you unexpectedly lose your job? An emergency fund can give you some breathing room while you figure out what's next.

What happens when you die? That's obviously not something you can plan around a specific date, but you can make life much easier for the people you leave behind by having an estate plan, keeping beneficiaries current and making sure your spouse or family knows where everything is.

None of these plans have to be elaborate. But, in my opinion, they do need to be written down.

A basic retirement plan might answer three questions:

• What am I going to do with my time?

• How much income will I need?

• Where will that income come from?

  
  

A basic "what happens when I die?" plan might include:

• A current will and other appropriate estate documents

• Up-to-date beneficiaries

• A simple list of financial accounts, insurance policies and important contacts so your spouse or family knows where to start

  
  

These are simple plans, but they are plans nonetheless. And having a simple plan is a whole lot better than having no plan at all.

We've all heard the phrase "get your stuff together." I don't usually say "stuff" when I use that phrase, but it applies here.

Having your "stuff" together doesn't mean knowing exactly what's going to happen. None of us can do that. It means thinking ahead, making some decisions before they have to be made and putting yourself—and the people who depend on you—in a better position to handle whatever comes next.

Because change is coming, whether we plan for it or not. We just have a much better chance of handling it well when we're prepared for what's on the other side.

Investment advice offered through 55 Wealth, LLC, an Indiana-registered investment advisor. See our full disclosure at www.go55wealth.com/disclosure.