Importance of Life Transition Planning
Written by True Tamplin, BSc, CEPF®
Updated on June 21, 2021
Life Transition Explained
If you’ve ever had to undergo a change in your life, be it moving, leaving college, getting married, or anything else, you understand how essential it is to have a plan prepared beforehand.
Life transition planning involves setting up a financial plan to ensure the availability of funds for a life transition.
A life transition is any event that may affect your financial needs, such as:
- Transitioning from high school to college
- Transitioning from college to the workforce
- Career change
- Having children
What is Life Transition Planning?
Life transition planning can refer to a variety of possible life events, for which a variety of types of plans may be employed.
Most often a life transition plan will incorporate a financial element to prepare for the costs that are associated with the change.
Since these costs can often be quite large, and potentially arise suddenly, having a plan in place well before the life transition itself is imperative.
Having a plan prevents obstacles from arising during the event, and if they do occur, they can be prepared for.
Life transition planning can involve setting up financial vehicles like retirement accounts, buying securities such as stocks and bonds, researching loans and tax deductions, and more.
Why is Life Transition Planning Important?
Life transition planning is important because it gives you time to prepare for a potentially permanent financial change.
Many life transitions are not isolated events but milestones that mark a lasting change.
Life transition planning can help you assess upcoming life events and prepare for the cost, challenges, and requirements of said events.
Preparing for an upcoming life event is qualitatively no different than preparing for any other upcoming expense, like buying a car or a home.
And just like in those circumstances, preparing early and thoroughly pays dividends.
IEP Transition Plan
IEP stands for Individualized Education Plan.
It is a type of education plan that caters to youth with learning or thinking differences.
IEP transition planning helps kids with IEPs plan for life after high school.
IEP transition planning is required by schools with IEP students under the Individuals with Disabilities Education Act (IDEA).
Schools must begin planning with IEP student’s by or before they turn 16.
IEP transition planning helps your child with specific, achievable goals, such as:
- Vocational training
- Higher education
- Job searching and workforce preparation
- Independent living