Share the wealth:
How to plan for more than retirement
It’s a common scenario: You save for a rainy day, invest for retirement, buy a home, and live the American dream. Yet, it can be hard to see how your different goals fit together or know what "enough" is. Plus, a growing number of families want to focus on creating experiences together and enjoying their wealth. Reframing how you think about your money, values, and goals may help you enjoy your wealth in the present without worrying about having enough in retirement.
Money and happiness may be connected
For years, people assumed money couldn’t buy happiness. But new research shows money boosts well-being, both in terms of how satisfied people are with life and how good or bad they feel at a given moment.
Wealth impacts both in-the-moment happiness and overall satisfactionFootnote 1
Animated line chart with defined plot points begins with an expanding x and y-axis from the bottom right corner. A vertical dotted line moves from right to left, stopping nearly at the edge of the chart to our left. The x-axis values come into view, showing Household Income from $60,000 to $180,000 in intervals of $60,000. The vertical dotted line is then labeled as $75,000. The y-axis also comes into view, representing the question, How happy/satisfied are you? The scale is Neutral towards the bottom to Very Happy at the top.
From there, the first category in the key at the top appears with silver representing the question, How do you feel right now? A silver line moves across the chart with 11 defined dots at various points. The line begins at a steady Neutral level between $60,000 and $75,000, the intersection of the vertical dotted line, before rising slightly then dropping back between about $80,000 to $100,000. From there, the line gradually increases to just above Neutral from $120,000 to $200,000, before rising at a slightly faster rate to midway between Neutral and Very Happy at about $250,000, and ending most of the way to Very Happy at $500,000.
The second category in the key appears with gold representing the question, How satisfied are you with your life? A gold line moves across the chart, again with 11 defined dots at the same points as the silver line on the Household Income scale. The gold line begins slightly below but rises to Neutral between $60,000 and $75,000, meeting the silver line at the intersection of the vertical dotted line. From there, the gold line continues to rise and then fall back to slightly above Neutral between $80,000 to $100,000, just like the silver line. From there, the line breaks away from the silver line and grows at a more rapid pace to midway between Neutral and Verry Happy at $200,000 to end at Very Happy at $500,000.
What made high earners feel happier and more satisfied? Researchers say it comes down to feeling confident, good, interested, inspired, and proud. You may be able to cultivate these feelings by making a list of your values, so you can begin to align your money with things that bring you joy.
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How do I revisit money and meaning?
Clarify and prioritize your goals
Once you’ve identified the things you value — what makes you feel good, inspired, interested, proud, or confident — consider how these values might translate into goals. For instance, if you feel good after a day at the beach with your kids, you might plan an annual vacation or save to buy a beach house. If you’re inspired by a certain charity, you might prioritize a recurring donation. Consider how these goals might fit together in the coming years.
Think about how your goals and priorities could change over time. Goals to consider could include:
Animated word cloud gradually reveals words that expand into frame with the dark words appearing slightly larger than light words. Dark words, from largest to smallest and order of appearance include Mortgage and Retirement. Light words, from largest to smallest and order of appearance include Kid 1 College, Healthcare, Kid 2 College, Travel, New Car, Kid’s Car, and Legacy.
Working toward multiple goals can help you lean into what you value without worrying that you’re prioritizing one area at the expense of another. An advisor can help you find this balance.
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What is the right way to prioritize the actions I take with my money?
Build your wealth around your values
Defining and prioritizing your goals can also help you discover new opportunities. For instance, different account types may be able to help you maximize how you save for specific goals, such as contributing to a college savings plan that may allow your money to grow tax-free.* You may be able to invest according to your values and the impact you want to make in the world. You may be able to use criteria such as how well a company is managed, how it implements labor standards, or how well it protects your data to help.
Ask a financial advisor about investing based on your values.
A closer look at vision investingFootnote 2
Animated line chart with x and y-axes gradually expanding into view. The y-axis is defined as Points with a scale of 50 to 200 in intervals of 50. The x-axis is defined as Time from January 2020 to December 31, 2022 in intervals of 6 months.
A key appears at the top with gold representing S&P 500 and silver representing S&P 500 ESG Index with the following two footnotes: 1) Consult with a tax advisor on your specific situation, and 2) The S&P 500 ESG Index is a broad-based market-cap-weighted index that is designed to measure the performance of securities meeting sustainability criteria while maintaining similar overall industry group weights as the S&P 500.
A gold line moves across the frame, beginning at 100 points before January 2020, dropping down to about 70 points in March 2020, rising gradually over time to about 125 points in January 2021, and flattening out to 150 points in January 2022. From there, the line begins to fall at a more rapid pace, rising and falling more often than before. The line falls to about 130 points in July 2022, rising to about 140 points in September 2022, falling back to 130 points in October 2022, rising to about 135 points, and then falling back to 130 points by December 31, 2022.
The silver line for S&P 500 ESG Index closely follows the gold line for S&P 500 before January 2020 to about May 2021. The lines separate but continue to follow the same trend, with the S&P 500 ESG Index consistently showing slightly lower than the S&P 500 from May 2021 to December 31, 2022.
* Consult with a tax advisor on your specific situation.
** The S&P 500 ESG Index is a broad-based, market-cap-weighted index that is designed to measure the performance of securities meeting sustainability criteria, while maintaining similar overall industry group weights as the S&P 500.
As the chart above indicates, investing tied to your values doesn’t have to mean sacrificing performance. Over the last three years, the S&P 500 ESG index has mirrored the S&P 500.
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Choosing the right trust for your needs
The bottom line on values and goals
When it comes to building wealth, the amount of money you save is important. But it’s equally important to enjoy your life. Making a conscious effort to align your financial goals with your values can help you enjoy your wealth as you work to grow it.
Your team of dedicated Wells Fargo specialists is here to help you with a goals-based approach and personalized support.
- Your Wells Fargo Advisors financial advisor assists you in creating a customized investment plan to help you achieve your goals
- Your Wells Fargo Bank premier banker is your primary point of contact for banking resources and can refer you to a Wells Fargo Advisors financial advisor for your investing needs