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The Perfect Age: Life and Financial Planning

Researchers have been trying to determine when is the perfect age -- what time is better than all the rest. The findings differ.

Some people say it's when they are younger and at their physical peak, while others believe it's when they are older and have hopefully gained a bit of financial security and wisdom. Some people point to when their children are young; others maintain it's when they can enjoy the freedom of an empty nest. No one seems to think it's when their children are teenagers.

 I subscribe to an answer of a woman who was interviewed by The Wall Street Journal on this topic. A 40-year-old mother of four children, she claimed that the perfect age is when you are old enough to realize what is important and young enough to look forward to future years and discoveries. She contrasted her 20-month-old filled with curiosity and her grandfather still vital at 85. Both seemed the perfect age to her. "For me, my perfect age is now."

The value of this approach is that it views life as a journey, not a single-destination goal. The same view can be applied to financial planning.

The advisor/writer Carl Richards has questioned the validity of the way financial plans are typically presented -- a bunch of assumptions about an unknowable future are plugged into a computer program and presented with a false sense of precision. This leads people to think they actually have control over the outcome. But life is messy, goals change, and the unexpected occurs. The plan becomes obsolete almost as soon as it's delivered.

Richards may be overstating his case to make a point. You need to plan to make sure you are on the right path. Certain behaviors clearly lead toward success or failure. It's good to know that you are taking the right steps toward financial security.

Yet Richards' larger argument rings true. The process of planning is critical, just don't expect that you can slavishly follow a plan generated at a specific time without regularly modifying it to take the vicissitudes of life into account. "The solution is to ... find the delicate balance between planning for the future and enjoying today. I've started calling this 'planning for now'."

In the end, it would be sad to elevate one part of your life as being the "glory days" (with a nod to the other Bruce, Springsteen). The trick is to enjoy now and prepare for what lies ahead.

Words of Wisdom

Like my 92-year-old friend says: Any day you're above ground is a good day. -- From a reader's comment in The Wall Street Journal