So you did a financial or retirement plan. Congratulations – right??!! That is a good thing (unless you ended up buying or investing in crappy products because of it – ooops!). I am happy for you. I am even happier if you paid me to help you do it!! It is a great way to provide a more solid foundation for your life today and a sense of where you are headed. It can also help clarify steps you can take now to reach your goals and establish personal and financial priorities.
However, don’t freak out if the plan starts to go off track. If you are a normal person, it is likely that is going to happen. Life comes up. Completely unexpected things happen – or you do things that you couldn’t have anticipated. Maybe you make a mistake, or two, or three, or twenty… Or you have a sudden change in your personal relationships. Or you make a bad career move. Or you took a trip to Ireland. Or you smoke. Or you bought an expensive coffee. Or something happened.
Don’t obsess about your plan (or listen to advisors that treat your plan they did for you like it is the blueprint for your future). It isn’t! It is ok to deviate and even make mistakes and it is unlikely that they will cost you 10 years of hard labor at the end of life. When unexpected things happen, address them on your own or with your advisor. Discuss how you may have to modify your goals. You can even create a whole new plan – and this one could be even better. Or not!
FINAL IMPORTANT POINT (BOLD AND IN CAPS!!!): Understand that the assumptions that make up your plan can end up being totally wrong!! I spend a meaningful part of my planning sessions with my clients emphasizing this. Know the flaws in your plan. There are far too many variables such as return rates, savings rates, employment situations, longevity, retire dates, inflation, interest rates, etc… that will simply not turn out the way you expected.