Psychological Toll of Financial Planning
by
Sun Feb 11 2024
The vast constellation of financial planning can take a toll on a person as they are approaching retirement age. From emerging financial technologies, to shifting laws and cultures on major aspects of life i.e. healthcare and estate planning, to even scams targeting the middle-aged and elderly, the financial planning universe is rife with asteroids, supernovas, and even a slightly unpleasant odor of burnt steak, among other surprises. While setting yourself up for success during retirement age, complicated feelings of overwhelm, panic, and failure are a part of the process. Discussing the psychological impact of financial planning is an important part of staying grounded and informed on what you may expect to experience, how to process it in a healthy way, and how to mitigate stress and confusion, so you can launch smoothly into retirement and float weightlessly through your later (light)years.
Financial Planning is Complex
Financial wellness is a Jupiter-ian task as it is without the increasing complications that come with age. If you’re lucky, you did everything right and have amassed a wealth as vast as the cosmos themselves, making the planning process toward your retirement easy, painless, and fruitful for yourself and your loved ones. For most people, this isn’t their situation. It is important to bear in mind that nobody’s perfect financially, and nobody is beyond assistance and support when it comes time to manage personal finances and the stress that comes with that.
Nevertheless, it’s normal to get a little stubborn about it. Good financial planning is seen as a virtue in our society. However, as we get older, this pride may make us vulnerable, especially with looming age-related worries like cognitive decline that can undermine our confidence in handling our own finances. Before your supernova, the key to mitigating the stress of this process is understanding that hiccups are normal. Simplifying your financial portfolio, appointing a financial Power of Attorney you trust, and utilizing health care directives, all can help put you at peace of mind.
Meteor Showers in our Economic Landscape
Whether you are working with a traditional pension, a 401k plan, or otherwise, inflation and federal interest rates can negatively impact how much your retirement funds are truly worth. Typically only state and local government annuities have adjustments for rising costs of living, and with federal interest rates raised to a 22 year high, lump sum payments may be raining down less loot than expected.
Additionally, more and more of younger generations, such as Millennials and Gen Z, are developing their wealth more slowly, with more of them remaining at home and working jobs with lower socioeconomic status than their parents. This is a galactic source of stress for older generations, who may find themselves in a position of helping their children and grandchildren in ways they didn’t initially realize they would have to.
While it varies case by case which of these changes may apply to you, it is important to remember that you are not alone. Understanding that these challenges are shared
throughout many elderly populations is a fundamental part of soothing the psychological toll on your own financial plan.
Additionally, while scams and fraud targeting older people have been a longtime issue and a source of stress, luckily the Federal Trade Commission has been stepping up. They are advocating for Congress to restore the FTC’s authority to recover money lost to scammers, especially after that power was limited by the a Supreme Court ruling in 2021. They have formed an Advisory Group under the Stop Senior Scams Act. They work to expand consumer education efforts, improve industry training on scam prevention, develop innovative methods to detect and stop scams, and conduct research to reduce fraud. These expansions in the financial support solar system will help bring you into an orbit where you can feel taken care of and protected.
Plutonian Wellness Solutions
Is it real? is it a sham? A “financial therapist”? Whether this is a legitimate and useful resource, is as hotly debated as the planetary status of Pluto itself. It’s official definition , according to the financial therapy association, is “a process informed by both therapeutic and financial competencies that helps people think, feel, communicate and behave differently with money to improve overall well-being through evidence-based practices and interventions.” Practicioners can come from a therapy or a financial background, with most being financial advisors with the additional therapy certification. Like in traditional therapy, financial therapy addresses the root causes of many of the woes we face with our personal finances, such as financial trauma, unhealthy financial behaviors, and navigating changes in financial culture, helping people think, feel, and behave differently regarding money.
The emergence of an interdisciplinary resource such as a financial therapy, strongly suggest that personal finance anxiety is reaching its point of reckoning, where it is no longer a personal responsibility issue alone, but rather a multiversal and shared health and wellness experience that is finally beginning to receive much-needed support. For many people approaching middle age, such a shift may be new, and “needing therapy” may feel stigmatizing. However, financial therapy is designed to be collaborative, nurturing you from where you’re at and progressing to sustainable change. It’s a relatively new field, but in this ever expanding odyssey through the financial planning multiverse, it doesn’t hurt to try something new!
Conclusion
While the labyrinth of the financial planning universe can be daunting and sometimes never-ending, resources are there to help soothe the psychological toll of family planning. With the help education, assistance, and a healthy dose of realism, you can strap into your journey with confidence and mental ease, blasting off into the stratosphere and living your retirement years in bliss.