Advisor Reflections: Have Your Goals Changed?

My childhood friend Erica and I try to touch base at least once a year, though it can be challenging to find the time between family and work. A couple months ago, she called me up out of the blue. “I have some news,” she said. “We spontaneously moved to Florida!” This was quite a shock as Erica had lived in New York City for over 25 years and loved it. But, she explained, everything seemed to change in 2020. “We just thought it would be better for our family to be closer to my parents. Plus, with everyone at home, we needed more space.”

Erica was not alone. Across the country, people have found themselves in changing circumstances, re-evaluating their goals and having to update their financial plans as a result of the pandemic – myself included. Our son, a sophomore in college, found an all-remote learning environment at an out-of-state university to be too isolating and far away; after much thought and many family discussions, we decided that a school closer to home would make more sense.

Over the past year, we have friends who’ve lost their jobs, while others found new ones as companies adapted to more flexible work arrangements that allowed them to hire without the limitations of geography. 2020 also resulted in changing spending trends that will likely continue in the new year. Many of these won’t require a financial planning update– allocating money toward a new treadmill versus paying for a gym membership will likely not impact your retirement projections – but others might, such as investing in a major home renovation or vacation home.

Goals, like resolutions, can be a loaded word that can trigger stress or overwhelm, especially when they involve big life decisions such as some of the examples here, or involve other people, like family members or loved ones. Knowing this, we encourage you to reach out to us to see if we can help ease some of the burden. Even if you do not have all the moving parts figured out yet, we can offer financial perspectives you might not have considered or make you aware of administrative tasks that a new circumstance may bring.

For example, when my son withdrew from his university, a letter of instruction to our 529 plan had to be prepared to request a re-contribution of the refunded amount back to his account within 60 days to avoid tax consequences. When my friend Erica moved, there were obvious updates she had to implement across the board, from changing estate planning documents to reflect her new state residence to rolling over 401(k) plans as a result of a job switch to investing the capital gains on the apartment she and her husband sold in NYC.

Of course, pandemic or not, this is what we as planners do and will continue to do. Planning, as they say, is an action, not a noun, and goals are ever-changing. This seemed to apply especially to 2020.

As for my friend Erica, she texted me from her new home in Florida just last week to wish me Happy New Year and to let me know that all was well. It was comforting to hear that, with good planning, things can still work out for the best, even in the most uncertain of times.