72% Of Americans Are Doing This With Their Money

A few weeks ago, we looked at the $109,000 retirement gap and the challenge advisors face in helping clients make their money last. But retirement planning isn’t just about making sure clients have enough for later, it’s also about helping them determine what they’re comfortable spending today.

A term called "Maxxing" — which has become one of the internet’s favorite ways to describe optimizing something — is making its way into the financial conversation as more and more people are "lifemaxxing."

That concept reflects a shift in how people are thinking about financial priorities. Rather than focusing exclusively on maximizing savings and wealth accumulation, they’re placing greater emphasis on using their money to create meaningful experiences and enjoy life along the way. This is why longer auto loans and home loans (40 years) are becoming more popular as people look to stretch their budgets in order to have more "fun money."

And according to a new SoFi survey, it’s not just a social media trend as 72% of respondents said they’re willing to make slower progress toward financial goals in order to prioritize family and have meaningful experiences. This may be especially prevalent among Gen Z and millennials, who are looking to enjoy life along the way despite the financial challenges they face, including the rising cost of homeownership.

In fact, 59% of Americans said the ability to enjoy life is a marker of financial progress, more than twice the 27% who pointed to owning a home.

For advisors, lifemaxxing is an interesting reminder that clients don’t necessarily view money as a scoreboard. They want their financial plan to support the life they’re living now, not just the one they hope to live decades from now. That doesn’t mean abandoning long-term planning. It means helping clients figure out how much they can spend today without undermining tomorrow.

There’s a natural planning conversation here: What experiences matter most? What does "enough" look like? And how much can a client comfortably spend today without compromising their future goals? After all, the goal may not be to maximize money at every stage of life. It may be to maximize what that money allows clients to do.

Photo: Pics Five/Shutterstock