“Someone's sitting in the shade today because someone planted a tree a long time ago." -Warren Buffett
Time never stops to wait for us.
Millions of Americans are turning age 65 with no plan for what comes next. Millions more are so "busy" that they don't realize their inevitable retirement is only a few moments away. Father Time waits on no one, and eventually, even the most dedicated workers punch the clock for the last time.
I have had 1000s of conversations about retirement and retirement income planning. Here are a few things I can confidently tell you:
"Success" in retirement is personal.
Retirees with a structured and written retirement income plan tend to have much better outcomes than those who "wing it."
The analytical, number-crunching CFO spouse is almost always married to a non-CFO spouse who won't be able to duplicate the financial spreadsheet formulas. Financial planning isn't for you-- it's for them.
Deferring the higher social security benefit is one of the best longevity hedges for couples.
Taxes and Inflation are two economic forces that never depart from us. Have a plan and strategy for both.
The only "benchmarks" you should focus on are the ones that matter to you and your financial plan. Outperforming the S&P 500 has no bearing on your ability to retire and maintain your lifestyle.
Time can be your enemy or your friend.
Once you retire and no longer have a steady paycheck, your lifestyle must be funded and defended. Retirement is about offense and defense.
The earlier you begin planning, the longer you have to make small course corrections and meaningful adjustments. This puts the compounding of small, sound decisions in your favor.
Experiences > Things.
"Keeping up with the Joneses" is a myth. To some people, you are the Joneses.
No one lies on their deathbed wondering about their investment portfolio. Living your authentic life, friendships, expressing your true feelings, and letting yourself be happy are among the top regrets of the dying.
As you can see from the graphic above, our lifespan tends to have multiple phases and areas where financial planning can add significant value. Think back to your 25-year-old self-- are there financial lessons you've had to learn the hard way? Are there things that you would do differently if you could?
Most likely, the answer is "yes."
Now consider this-- if you are 55-65 years old, there is a high probability that you will spend 3 decades in retirement. That's practically the same amount of time back to your younger self.
Doesn't it make sense to set yourself on the right path--and keep yourself on that path--through the duration of your retirement?
Disclosures:
Investment advisory and financial planning services offered through Advisory Alpha, LLC, a SEC Registered Investment Advisor. Insurance, Consulting and Education services offered through Vertex Capital Advisors. Vertex Capital Advisors is a separate and unaffiliated entity from Advisory Alpha, LLC. All written content on this site is for information purposes only. Opinions expressed herein are solely those of Michael H. Baker, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. This website may provide links to others for the convenience of our users. Michael H. Baker has no control over the accuracy or content of these other websites. Please note: When you access a link to a third-party website you assume total responsibility for your use of linked website. Links and references to other websites and third-party content providers are offered for your convenience. We do not necessarily prepare, monitor, review or update the information provided by third parties. We make no representation or warranty with respect to the completeness, timeliness, suitability, or reliability of the referenced content.