Five Retirement Statement No Nos
Those of us, in the fourth quarter of our life here on Earth, worked for more than 40 years so that we could enjoy another twenty-+years with our feet kicked up. At times, the math doesn’t add up. It SHOULD be the opposite: work 20 years and stay retired for 40 or more. I met a couple last night in Destin who told me they were “professional retirees.” This meant they enjoyed themselves and didn’t let moss grow under their feet.
Welcome to the team, Brother.
Years ago, our parents worked for a company and in retirement, they were awarded a pension that they couldn’t outlive. If the worker died first, the widow or widower got the check until their dying breath. This was called a defined BENEFIT plan. Things changed in the eighties. Companies got out of the pension business and went into the defined CONTRIBUTION program. The best example was a 401k plan where employees matched the employees’ contribution with pre-taxed dollars; usually a maximum of 5 or 6%.
The pension was guaranteed (until companies raided the plan.) The contribution plan has NO guarantees. There is risk involved.
Folks, this is your retirement money. Financial professionals call it a 3-legged stool: your Social Security, your savings/investments and your pension or retirement plan (401k). The proper plan becomes the difference in a relaxed, comfortable retirement and going back to eating Beanie Weanies and Ramen noodles every day. And moving in with the kids.
Our goals in retirement are simple: A. Having enough monthly income for a comfortable lifestyle B. Either good health or a plan to cover long-term care needs C. A plan to leave a legacy for our family.
Since I have been assisting retirees and pre-retirees for more than 31 years without fees or risk (coachbradford.com), I am amazed at the number of baby boomers who continue to mutter the following 5 statements.
In no particular order, see if you have used these in the recent past:
“I HOPE.” This phrase is used many times as a wish that something will happen in the near future. “I HOPE the stock market bounces back.” “I HOPE my investments will be safe during my retirement.” “I HOPE I don’t outlive my money.”
There is nothing wrong with dreaming about the future. Hope is an important part of the wedding vows. However: HOPE is not a plan.
A successful retirement plan must be built on a solid foundation that will withstand downturns, family changes and peace of mind that produces a S.W.A.N. account: Sleep Well At Night.
“SHOULDA-WOULDA-COULDA.” These helping verbs are used in conjunction with a mistake made in the past along with self-brow beating. “I SHOULDA taken better care of my health.” “I WOULDA done better with my retirement accounts if I had listened to everything.” Don’t relive mistakes. Look forward.
“AS SOON AS.” This phrase is used as a method to put things off until a specific event occurs. “AS SOON AS interest rates go up, I will roll my money over.” “AS SOON AS the kids graduate and move out, we will finally go on a cruise.” “AS SOON AS I pay my income taxes, I will take action.” There will always be another event that will be just around the corner. “AS SOON AS” never triggers action.
“‘LET ME THINK ABOUT IT.” This is the best example of the process of procrastination. Most people hate to tell someone NO, so the easy response is to simply say: LET ME THINK ABOUT IT. Usually a golden opportunity is missed during this time frame while thinking about it.
There is no reason to jump into anything without gathering all the facts. Today, the simple facts are at our fingertips through the internet. Just make sure it’s a balanced site, not one that is biased or paid for its endorsement.
I have a family member who was told by the dentist that he had 3 cavities that needed to be filled. His response: “Let me think about it.” The dentist replied: “check with my receptionist. The next opening will be in 4 months. Don’t call me in a week, complaining about your teeth hurting.” He got them fixed that day.
“THAT’S THE WAY I HAVE ALWAYS DONE IT.” Change is difficult. We are influenced by other’s opinions. Your brother-in-law, neighbor, beautician or Facebook friend isn’t always the best source of information. Through the years, I have sat at hundreds of kitchen tables and discussed retirement options.
Way too many times, they will quote what they heard on a television ad that has ZERO to do with the subject at hand. It’s akin to going into a Ford car dealership and throwing up a mental blockade because his Uncle Harvey had a Ford tractor that he had trouble with during the Depression. Or her Aunt Lucille lost money in an annuity. She had no idea that Aunt Lucille’s annuity was a variable annuity which had risk and fees. These are the type I steer clear of plus they require a special license.
This final statement will shock you until you actually think about it: “People spend more time planning their vacation at the beach than they spend on planning for their retirement years.” Why? See the 5 reasons above.
We are all familiar with our on-going CHECK UPS. Doctor checkups. Car checkups. Dental checkups. Insurance checkups. Homeowner checkups.
Why do we avoid one of the most important checkup?
Your retirement CHECKUP.