Mitigate Financial Disruption of Life Transitions with Planning at Each Stage

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Life transitions, whether positive or negative, can be disruptive. When going through a major change, it is typical to experience a mix of emotions while also being faced with making new and critical financial decisions. Understanding the stages involved in a transition and how a financial consultant or advisor can help at each of those stages will go a long way in preparing you to navigate changes with minimal financial disruption.

Life transitions can include any of the following:

  • Selling a business
  • Approaching retirement
  • Inheriting wealth
  • Changing careers
  • Getting divorced/Getting married
  • Starting a family
  • Death of a loved one
  • Medical diagnosis

Each of these types of transitions can affect your financial future and therefore require financial planning and preparation.

4 stages of life transitions

There are typically four stages to life transitions: anticipation, ending, passage and a new normal. Each stage has its distinct markers and obstacles.

You can take proactive steps at each stage to ease the disruptive impact of the transition on your personal finances. Furthermore, having a support network, including an experienced financial consultant or advisor, on your side can help guide you through the unique challenges of each stage.

  1. Anticipation: Assess the situation

During this first stage, you are aware a change is coming and may be feeling some anxiety about the future. This could be a planned change, like the birth of a child or retirement, or it could be a change that presents more uncertainty such as a medical diagnosis.

It’s important to start thinking about the potential impact of the change during this stage. This is a good time to begin taking stock of your financial picture by preparing an inventory of your financial assets. Your financial professional can help you to assess your current financial situation, anticipate how your situation may change, and prepare for the coming transition.  

  1. Ending: Find a way forward

The change has recently occurred, and you may be feeling overwhelmed, burdened or stressed as you search for a way forward.

Having a plan can help you focus on the future. If you haven’t already started gathering information, such as insurance policies, investment plans and retirement accounts, now is the time. (See our “Financial Planning for Life Transitions” checklist for other items to consider at this stage.) Your financial professional can guide you in gathering the information needed to create a financial plan that takes into account your current state and future goals.

  1. Passage: Adjust to change

At this point, you are working through the transition and acclimating to the change. 

It’s time to set the plan in motion. Your financial professional can help you to implement your financial plan, step by step. In addition, you may need to work with your accountant and attorney to address areas such as tax planning and estate planning.

  1. New normal: Embrace life after transition

The transition is completed, and you have accepted your new life stage.

Even after the change has taken place and you have successfully “moved forward,” you still need to make sure that your financial plan continues to work for you. It’s important to communicate with your financial professional about any new changes that may occur in your life, and periodically assess your plan together. After all, change is the only constant in life.

No matter what type of life transition you are going through, you don’t have to go it alone.  Having a financial advisor who can provide guidance through each stage of your journey can help to mitigate the financial disruption of life’s expected and unexpected changes. Contact Kaufman Rossin Wealth to learn more about how we can help you plan and prepare for whatever the future may hold.


Maria Socarras is a Director of Client Experience at Kaufman Rossin Wealth, LLC, a Registered Investment Adviser.

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