Benetas Briefing New Podcast Episode: What Are the Wisdom Years, Anyway?

A few weeks ago, my daughter asked me a question that got me thinking.

 

“What exactly are the Wisdom Years?”

 

Considering we named the podcast Wisdom for Your Wisdom Years, it seemed like something I ought to be able to answer.

 

My first thought was that it isn’t an age.

 

I’ve worked with people who seem to enter this stage in their mid-50s and others who don't really get there until their 70s. What changes isn't necessarily their age or even their financial position.

 

It’s the questions they start asking.

 

For most of our working lives, the financial questions are largely about accumulation. How much should I save? How should I invest? Am I on track? How do I build more?

 

Then at some point the questions become different.

 

Do I have enough? How much longer do I actually want to work? What happens to my spouse if I die first? How much should we be helping our children or grandchildren? What do we want the next 20 or 30 years to look like?

 

That, to me, is where the Wisdom Years begin.

 

In this week’s episode of Wisdom for Your Wisdom Years, I spent some time talking about why that change in questions also changes the kind of planning that matters.

 

One example is spending.

 

For 30 or 40 years, you've essentially trained yourself to save. You get paid, put money away, invest it and repeat the process. Then retirement comes along and the financial plan may say you can comfortably spend more.

 

That doesn't mean your brain immediately agrees.

 

A client once told me about a colleague who said she wasn't “retiring,” she was “rewiring.” I've always liked that description because there really is some rewiring involved. You're changing habits that may have been reinforced for most of your adult life.

 

But I think there's another change that's just as important.

 

Planning becomes less about optimization and more about judgment.

 

Should an estate be structured for maximum tax efficiency, or should we give up a little efficiency if it makes life considerably easier for a surviving spouse?

 

Should we maintain accounts across six different institutions because we know where everything is, or simplify things because somebody else may eventually have to manage them?

 

How do you help one child or grandchild without unintentionally creating tension elsewhere in the family?

 

There's no spreadsheet that gives you the definitive answer to those questions.

 

At 40, we tend to ask, “Can I manage this?”

 

At 70 or 75, I think another question becomes increasingly important:

“Could someone else manage this?”

 

That's one of the things we tend to see as people move into this stage. Simplicity starts becoming more valuable. Not because people are suddenly incapable of handling complexity, but because the financial system they've built is eventually going to affect somebody besides them.

 

A spouse may have to take it over. An adult child may have to help. A trustee or executor may have to figure out what you've spent decades putting together.

 

Nothing necessarily jumps out as a problem today. But the perspective changes when you look at your financial life through the eyes of the next person who may have to manage it.

 

Maybe that's part of what financial wisdom actually looks like.

 

Less emphasis on accumulating the most or finding the technically perfect answer, and more attention to purpose, trade-offs, simplicity and the people who will eventually be affected by the decisions you're making today.

 

Listen to Episode here:

Apple

Spotify

 

Warm regards,

 

Matt Murphy, CFP®, AIF®

President, Benetas Wealth