Now that most of us have filed our tax returns (or extensions, if you’re waiting till the last minute again) it may be a good time to think about that other inevitable – death. I don’t mean to sound morbid, but let’s face it, not a one of us is going to live forever. This is not exactly an original thought. Witness the memorable aphorisms of yesteryear. Tempus Fugit and Carpe Diem. (For those of you who slept through high school Latin classes, I’ll translate: Time flies and seize the day.)
And witness the recent obituaries – much more than a few – of lovely people who died in their 50s or 60s, an age I now consider young.
Financial planners have to deal with life’s uncertainties and we do our best to prepare our clients for some really unpleasant possible outcomes, e.g. dying very young, becoming frail and needing long term care when very old, or worse, becoming frail and needing long term care when very young. In many cases, the economic blow can be softened to some extent by buying insurance, whether life, disability or long term care, for ourselves and for our families.
And since we can not know how long we will live (only that we are living longer), insurance companies have developed a new policy called “longevity insurance” which only pays off if (and only if) you live past 85.
But life is about more than financing the future. The other side of saving for “tomorrow” is enjoying “today.”
Everyone has different goals and priorities. For some, enjoying today means buying a new and snazzy car, for others, taking a trip to Europe with dear friends or even taking a year off to do charitable work.
The challenge, of course, is to strike the right balance between current consumption and saving for the future. And of course what matters is the kind of life you want.
One life coach uses a series of questions to help clients determine what is truly important to them. The first question is “If your doctor told you that you had 5 years to live, what would you do now?” The discussion proceeds from there and can have a striking impact, because it allows you to focus on what really matters to you.
In the future, I will be writing about practical concerns and strategies for spending less and saving more. But for now I wanted to emphasize that the quality of life should be foremost in our planning.