At times it seems like the main focus of retirement planning is on numbers. Consider the frequent surveys that evaluate retirees’ or near-retirees’ readiness—the results usually evaluate how much money the survey’s participants have saved versus their expenses.
Sock away enough dough or cut your expenses sufficiently and you’re in good shape to pursue your retirement dreams; fail to save enough and you better brush up your barista or shelf-stocking skills.
The numbers are important, of course. But what if you reverse the process: Identify the clients’ goals first and then configure the financial resources needed to support those goals? That’s the basic premise of life planning, a financial counseling approach developed by George Kinder, CFP. Life planning has gained acceptance largely through Kinder’s books, seminars and certification training for financial advisors.
At its core, the process is based on three questions that he developed to gain insight into what really matters to clients. For retirement advisors, asking these questions and working with clients’ responses can complement financial analytic skills and strengthen the advisor-client relationship:
- Imagine you are financially secure with enough money to take care of your needs, now and in the future. How would you live your life?
- Your doctor tells you that you have only five to 10 years to live and you’ll die unexpectedly. What will you do with your remaining time?
- Your doctor tells you that you have only have 24 hours to live. What did you miss and not get to do? Who did you not get to be?
Lisa A.K. Kirchenbauer, CFP, RLP (Registered Life Planner) with Omega Wealth Management LLC in Arlington, Virginia, describes life planning as a more holistic look at financial planning. The goal is to “dive a little bit deeper and understand what is truly most important to the client through a series of exercises and questions and deep listening,” she explains.