Why Most Financial Plans Fail to Spark Excitement: 3 Common Mistakes
The difference between having a plan and planning your life
I have a confession: My financial planning software is boring.
And if you and I only use it to see if you’ll run out of money, we’ve both failed.
Over the years working with DIY investors and incorporated professionals across Canada, I’ve noticed three fundamental mistakes people make when planning for retirement. These aren’t technical errors. They’re misunderstandings that keep people from actually enjoying the wealth they’ve worked so hard to build.
Let’s talk about them.
Mistake #1: They Plan with Blinders On
The Vision Gap
The Vision Gap is the difference between a client’s life or retirement vision and their ability to articulate it clearly to an advisor. Because most advisors are in a hurry to impress you with their fancy financial planning software and investment expertise, this gap is rarely explored. This perpetuates ineffective financial plans.
Many people approach financial planning with a reasonable question: “What’s the earliest I can retire?” It’s like planning a cross-country road trip and only asking, “What’s the cheapest gas station?” You’re missing the entire point of the journey.
You read about the “4% Rule” or safe withdrawal rates in retirement but forget what you’re actually withdrawing the money for. More time needs to be spent on moving from math to meaning.
Planning is a Verb, Not a Noun
Financial planning software are just calculators. They all have slightly different user functionality and some produce prettier graphs, but they will all produce the same number outputs given the same inputs. If your investment advisor or bank is promoting how good their financial planning software is, you’ll probably be impressed by the beautiful report but you should be worried about the level of planning you’re actually receiving.
Here’s what I mean: A financial plan (a noun) says you can spend $6,000 per month. Whereas financial planning (a verb) explains you can take your entire family to a villa in Portugal for your 40th anniversary because we stress-tested the big dream scenario.
The best plans I’ve created with clients include imagination, not just spreadsheets:
- Can you travel first class for the first 10 years?
- Can you gift meaningfully to your grandkids?
- Can you buy the “top shelf” without guilt?
- What would your ideal week actually look like?
From Projections to Permissions
Many clients first come to me for projections, but they really light up when we start talking about permissions. And by that, I mean permission to spend.
They’re afraid to spend because nobody has shown them their upper limit. When you combine uncertain markets with unclear boundaries, caution becomes the default, even when it’s unnecessary.
Planning isn’t about scarcity. It’s about clarity on what you can actually enjoy.
This is especially true when major questions are on the table. For instance, deciding whether to commute your pension isn’t just about running the numbers. It’s about understanding what kind of retirement flexibility matters most to you. The math only becomes meaningful when it connects to your actual vision for retirement.
Mistake #2: They Come Looking for Answers Instead of Understanding
The Retainer Model
The financial planning industry is happy to answer your questions about things like retirement age, CPP timing, and withdrawal rates. They understand that life is variable, so today’s “answer” will likely be outdated in two or three years.
That’s the business model: “Here’s a report based on today’s assumptions about the future”. You think the planner is great because they “answered” your question. They know either the assumptions will turn out to be inaccurate or your life won’t go according to plan. So, you keep paying the sales commission to make sure you get answers when things change. The relationship continues.
Worry can create dependency.
But what if we spent more time on understanding why a certain age is appropriate for retirement or CPP for you? Then when life throws you a curveball, and it will, you’d have the framework to adapt your plan yourself.
Teaching Principles, Not Just Providing Solutions
I’d rather you understand the principles behind CPP timing than just waiting until 70. If you understand that CPP is a guaranteed, inflation-indexed annuity, you won’t panic when the market drops 10% in retirement. You’ll recognize CPP’s role as part of your guaranteed income foundation and sleep better at night.
Many people ask me about government benefits without understanding how they actually work. That’s why I wrote about how much CPP and OAS will cover in retirement. Not to give a simple number, but to help people understand these programs’ role in their overall strategy.
When you grasp the underlying mechanics, you can make adjustments confidently when circumstances change. You’re not dependent on someone else to tell you what to do.
Answers have a shelf life. Understanding compounds like interest.
The Value of Financial Literacy
This is particularly important for DIY investors who want to maintain control of their financial future. The goal shouldn’t just be creating a financial plan document. It should be developing the financial literacy to navigate your plan through changing circumstances.
That’s the fundamental difference between advice-only planning and traditional approaches. I’m not trying to create dependency; I’m trying to build your capability.
Mistake #3: They Try to Fit a Square Peg into a Round Hole
Information Overload Without Application
We live in an age where we can access all of the information we’ll ever need. Translating that information into the knowledge of how, when, and why to apply it effectively is another ballgame. But even when you understand a strategy, it still needs to fit you.
It’s like dieting. If my doctor tells me a pescatarian diet is proven to be the world’s greatest diet to maintain good health but I hate fish, I’ll fail at trying to stay on the diet. Not because I don’t want to be healthy, but because I’m not motivated to follow it.
Some people follow generic advice or invest and spend with no real purpose, then wonder why they feel uncomfortable or don’t know if things are or aren’t working.
The “Math vs. Sleep” Test
Mathematically, carrying a low-interest mortgage while investing at a higher rate is “correct”.
But if that debt keeps you awake at night, it’s a square peg in a round hole. It doesn’t fit you, and you’ll likely struggle to keep with the strategy.
The best financial strategy isn’t necessarily the most optimal one on paper. It’s the one you can sustain through market cycles, life changes, and emotional ups and downs.
The Incorporated Professional Trap
I see this constantly with incorporated professionals. First, they follow generic advice that everyone should incorporate if they are eligible. Then they piggyback that with taking 100% dividend income and saving any excess in their companies, while ignoring personal/spousal RRSPs and TFSAs, or potential corporate liability claims. They’re using strategies designed for someone else’s tax reality.
The financial influencer trap is real. People see a strategy on a subreddit and try to force it onto their situation. “Optimal” becomes the enemy of “sustainable.”
Finding What Fits
The best strategy is the one you’ll actually stick with through good and bad economies and markets. Not your neighbour’s strategy. Not the one that sounds impressive at dinner parties. Yours.
A strategy that fits you considers your knowledge, your time, your emotional comfort, and your values. When all of those align, you’re far more likely to stay the course when things get challenging.
The Bottom Line
Financial planning should spark excitement for this next chapter of life you’ve worked so long to reach. If your plan feels like a math problem instead of a roadmap to your dreams, something’s missing.
You don’t need more financial products or performance charts designed to impress you. You need perspective.
Where to Begin
Start here:
- Write down what a great day, week, or year looks like in retirement. Be specific. What are you doing? Who are you with? What brings you joy?
- Name your non-negotiables. What aspects of your envisioned retirement are you unwilling to compromise on?
- Choose a date you’d like that life to start. Even a rough target creates clarity.
This is where sound financial planning begins.
Once you have clarity on your vision, you can build a strategy that actually fits your life, not someone else’s template. And when you understand the principles behind the decisions, you can adapt confidently as circumstances change.
Planning isn’t about creating the perfect projection. It’s about building the clarity, understanding, and customization that let you live well, both now and in retirement.
— David
P.S. If this post helped simplify your thinking, or reminded you of someone navigating a similar decision, feel free to share it.
Ready to gain clarity on your financial future? As a fee-only, advice-only financial planner working virtually with clients across Canada, I help DIY investors and incorporated professionals create plans that actually fit their lives. No commissions, no sales tactics. Just objective guidance. Learn more at elterofinancial.com or reach out to start a conversation.
David Martin is an Advice-Only Financial Planner in Halifax NS, with 25 years of experience serving Atlantic Canada DIY investors and business owners.
I help DIY investors in Atlantic Canada gain financial confidence. Contact me today to schedule a free consultation and start your journey towards financial independence.
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Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment and tax-related decisions. You should seek independent financial advice from a financial advisor near you.