When most people think about financial planning, they think about implementation tactics. Should I be in a Roth or a traditional IRA? Should I use a bond ladder or stick with a total return portfolio? How should I time Social Security? These are good questions, but they’re not the first questions you should be asking. You can’t determine which strategy or tool might be appropriate based on a list of your assets without additional context.
Imagine walking into a doctor’s office and saying, “I’m 62, I weigh 180 pounds, and my blood pressure is 130/80. What’s wrong with me?” The doctor would likely raise an eyebrow and ask questions instead of offering a diagnosis: “What symptoms are you experiencing? What are your goals for your health?”
The same goes for financial planning. If you’re not clear about what you’re trying to achieve, how you want to live in retirement, what legacy you want to leave, and how much freedom you want to build into your lifestyle, then even the best tactical advice will fall short.
One of the most common oversights in DIY financial plans is neglecting the human element. This refers to your lifestyle and how you will spend your time once retired. Before crunching numbers or selecting investment strategies, it’s essential to understand what you’re planning for. Do you envision frequent travel, time with family, starting a second act career, or simply having the freedom to slow down? These aspirations form the foundation of your retirement “why,” offering clarity and context for everything else, from your spending targets to your risk tolerance. Defining your goals and retirement style helps identify appropriate strategies for income generation, longevity planning, and risk management. Without this vision, you risk building a plan that’s financially sound, but misaligned with the life you actually want to live.
It’s tempting to jump straight into the spreadsheets, but this personal inventory is what gives your plan direction. Tactics are simply tools. Strategy is the blueprint. Without the blueprint, the tools may not build what you actually want. A strategy-first approach helps ensure your tactics align with your long-term vision. Whether you work with an advisor or prefer to DIY your plan, taking the time to define your goals, preferences, and values will lead to better outcomes and fewer surprises down the road.
Not sure how to turn your retirement vision into a strategy? Start by discovering your retirement income style with the RISA® (Retirement Income Style Awareness) Profile. This short assessment helps you understand whether you prefer predictable income, investment flexibility, or something in between – giving you a clearer path forward. Take the RISA® today and make sure your plan reflects not just your finances, but your preferences and peace of mind.
Want to learn more? Listen to Ep. 183 of the Retire With Style Podcast
