Life Transitions are Inevitable. Mistakes Don’t Have to Be.

Written by Apella Wealth | Jul 15, 2025 1:15:00 PM

One guarantee all humans can count on is that life transitions will happen. Whether it’s a job change, divorce, or retirement, no one is immune to change. The average American changes jobs 12 times over the course of their career. In 2024, 35%-50% of first marriages ended in divorce. That number jumped to 60% to 70% for second marriages.¹ Meanwhile, over 4.1 million Americans turned 65 and began looking toward retirement in 2024.²

These statistics highlight a simple truth: change is constant, even predictable. However, our emotional reactions to change are often less predictable. Mike Tyson, a famous boxer, once said, “Everybody has a plan until they get punched in the mouth.”³ Having a plan is only half the battle. Sticking to that plan when emotions run high is where the war is won. This article explores three common life transitions, the behavioral biases they tend to trigger, and smart strategies to counteract natural tendencies.

Life Transition: Job change or promotion. This is likely the most common life transition. Having a roadmap to navigate this change is paramount.⁴

Bias: Lifestyle creep and overconfidence. A new job or promotion often comes with a higher wage and, subsequently, the temptation to spend more. It is natural to think of all the extra things that can be done and bought with the increased income. Quickly, those “extra things” that were once luxuries become necessities, and it becomes difficult to imagine going without them.
Smart Move: After a job change or promotion and an increase in wages, revisiting the spending plan is advisable. Automate increased savings goals before upgrading lifestyle. One effective approach is to set the savings goal as a percentage of pay rather than a fixed dollar amount. This way, when income increases, savings automatically increase before spending habits adjust.

Life Transition: Divorce. Divorce is more than a legal or financial event; it’s a deeply personal life shift that can leave people feeling vulnerable, overwhelmed or emotionally drained.

Bias: Anchoring and loss aversion. It’s natural to want to hold onto what is familiar, especially when everything else is in flux. Decisions made during a divorce will have lasting impacts.
Smart Move: This advice is undoubtedly easier said than done. Rather than focusing on preserving the past, a healthier approach is to look toward the future. Ask what is needed to feel safe, secure, and supported in the next chapter. Shifting the mindset from clinging to what was to planning for what is to come can make all the difference when battling natural instincts.

Life Transition: Retirement. This transition is one many look forward to with excitement and optimism. However, what is often overlooked is how daunting this change can be without a well-crafted plan. Moving from stable work, steady income, and a fixed schedule to managing portfolio distributions, associated taxes, and no set routine can be unsettling.

Bias: Status quo and herd mentality. Maintaining the status quo is common in retirement. There is a tendency to stick with familiar patterns or avoid change because it feels safer than trying something new. Spending and investment strategies often remain the same with little thought of adjustment. Additionally, with more time than ever, retirees often consume more news and spend more time with family and friends compared to their working years. While neither activity is inherently negative, decisions based on what others say and do can sometimes lead to concerning outcomes.
Smart Move: Approach retirement as an entirely new chapter requiring its own playbook. Reframe this transition as an opportunity to check in with yourself and reassess your priorities. Review spending and investment strategies regularly. It’s normal to feel uncertain; with a personalized financial plan, decision-making can shift from fear-based to value-based, setting the stage for long-term success.

Whether navigating a job change, the end of a marriage, or retirement, behavioral biases can cloud judgement and lead to costly mistakes. While it is impossible to control every transition, it is possible to control how one prepares for and responds to them. Approaching life transitions with grace, patience, and a trusted partner is essential.

A trusted advisor can help stress-test plans, provide context amid market noise, and offer calm when emotions run high. By listening carefully and helping weigh options with clarity, care, and the client’s best interests at heart, an Apella Advisor serves as both a guide and a buffer through all of life’s transitions.

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Disclosures:

Apella Capital, LLC (“Apella”), DBA Apella Wealth is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered or excluded or exempt from registration requirements. Registration with the SEC or any state securities authority does not imply a certain level of skill or training. Please note the material is provided for educational and background use only. Moreover, you should not assume that any discussion or information contained in this material serves as the receipt of, or as a substitute for, personalized investment advice.

No current or future client should assume that any discussion or information contained in this material serves as the receipt of, or as a substitute for, personalized investment advice. As with any investment strategy, there is the possibility of profitability as well as loss.

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