- Unexpected events can provide the opportunity for personal and financial growth
- The right mindset and planning are key to turning challenges into valuable experiences
- A flexible financial plan can help you prepare for costs that may accompany life’s surprises
Welcoming home an aging parent or a boomerang child inspires you to add that long-dreamed-of addition to your home. A career transition motivates you to go back to school for an advanced degree. New tax legislation moves you into a different income bracket, encouraging you to revisit your investment portfolio for tax efficiency.
In Chinese, the word for “crisis” is composed of two characters: one means “danger” and the other translates to “opportunity.” Embracing unexpected events, no matter how stressful they may seem at the time, can provide the impetus for positive — and sometimes even long overdue — improvements.
Here are five ways to make the most of life’s curveballs.
Sometimes it’s merely the anticipation of an event that leads to anxiety. According to the Ameriprise Retirement Triggers study,¹ 63% of those surveyed felt stress leading up to the decision to retire, while only 25% reported feeling stressed after retiring. Physical and emotional preparation topped the list when study respondents cited their primary reasons for feeling a sense of control over the decision to retire.
While a positive attitude is key to successfully navigating a life transition, financial preparedness cannot be underestimated. Seventy-one percent of workers with a plan for retirement are confident they will have enough money to live comfortably throughout their post-work years, compared with 33% of those without a plan, according to the Employee Benefit Research Institute’s 2017 Retirement Confidence Survey.²
Some may think of a financial plan as somehow set in stone, but the converse is actually true — a customized plan should allow for some flexibility and uncertainty. How? A plan may help address uncertainty by suggesting strategies to spread risk among types of investments and savings through diversification, tax allocation and varying market exposure. Other variables a plan may help account for could include rising health care expenses, cost-of-living increases and interest rate changes.
While an unexpected event may trigger the urge to make a sudden financial decision, work with your advisor to discuss options first — it may turn out that minor adjustments to your plan are sufficient to respond to life’s changes.
Take our 3-Minute Confident Retirement® check to find out how you compare to other Ameriprise clients when it comes to planning and preparation. After answering the questions, download your results to share with your advisor, who can help with enhancing your financial plan in any areas of concern. Go to my home page to take the check or link to the experience here: https://www.ameriprise.com/spotlight/confident-retirement-check/