‘Change is inevitable. Progress is optional’ – Tony Robbins
We all have choices to make in life, and doing nothing is a choice no matter if it’s ignoring the rotting board on back porch or choosing not to improve your job skills in an increasingly competitive workplace. The do nothing approach may be OK for some, but for many of us the thought of leaving things to chance is completely unacceptable.
For instance, most people understand there are simple things they could be doing right now to improve the overall quality of their health. Nearly every study ever done on the topic suggests the keys to wellness and longevity begins with a diet of whole foods and exercising regularly.
In other words, anyone can be doing these simple things — but relatively few are taking advantage.
The healthcare industry commonly refers to some of the biggest health concerns in America today — heart disease, stroke and diabetes — as lifestyle diseases. That means these conditions are largely preventable; individuals need only make a few small changes to their daily routine. These changes may be a bit inconvenient at first, but they needn’t be expensive or time consuming.
Besides, doing the little things necessary to maintain your health and fitness will all seem so maddeningly easy should you end up stricken with one of these ailments.
You also have the option of doing nothing when it comes to maintaining your home. The rotting floorboard on the porch, the loose handrail on the cellar stairs, or the leak in the roof discovered after the last big storm are all things you can live with for a long time without having to go to the trouble and expense of having them repaired.
But the real costs are discovered over time — the rotten board can become the pain and expense of a broken ankle, the loose handrail can translate into a bad fall for either you or a loved one, and that small leak in the roof today could turn into the expense of replacing the entire roof a few years down the road.
It’s just plain common sense, but investing a little time and money today can save a lot of both later on.
Success in Retirement Doesn’t Happen by Itself
On the subject of retirement, what’s the best piece of advice you have ever heard?
Could it be investing in a low-cost index fund, as Warren Buffet recently put it; or perhaps saving money automatically, as Time Magazine suggests; or following financial markets and diversifying your investments, as several experts indicated in a Bankrate.com survey?
The answer is likely some combination of this wisdom, but ultimately, it’s different for everyone.
In today’s world, success in retirement is not the sort of thing that just happens all by itself. It requires careful assessment, thorough planning to include execution and review, and of course it’s completely dependent upon you to get the ball rolling.
You may be committed to the idea of managing retirement on your own and have begun working through the myriad of economic and financial data you’ll need to understand in order to succeed, or you may have decided to enlist the help of a retirement professional well versed in the intricacies of personal finance and long-term financial planning.
For DIYers, you must account for an extensive list of considerations, not the least of which is simply doing the math — being careful not to make too many assumptions while avoiding the tendency to “round up” or be a bit too optimistic when it comes down to the real dollar figures.
You Have to Be Prepared for Anything
No matter your age or how close you are to retirement, recognize that the timeframe for your savings is going to include a lot of variables — inflation and deflation, growth and recessions, and likely a bear market or two in stocks as well.
If you’re in the red zone, within five years of your planned retirement date, it’s important to have a budget plan in place that lists your sources of income once you’ve received your final paycheck.
Your asset allocation should become more conservative as you move closer to retirement, and be sure to map out a plan covering a span of at least 25 to 30 years. Today, an ever higher percentage of people retiring in their 60s will live well into their eighties, nineties, and beyond.
If you’ve spent any amount of time researching retirement you’ve undoubtedly found there’s no shortage of information readily available almost anywhere you look. While having access to all this material can be helpful, trying to process this much data can lead to feelings of overwhelm which is said to be a contributing factor in process of procrastination.
To this end, I’ve put together a separate report on a subject that gets little discussion in the media — the risks associated with the sequence of your investment returns during retirement and the unpredictable impact it can have on your savings. Retirement 101: The Sequence of Returns Risk should greatly improve your level of understanding and perhaps help you to reevaluate some of your retirement priorities. You can get a complimentary copy by visiting this link.
Lastly, whatever you do, don’t overlook what I call the “BIG 3” retirement concerns: the impending structural perils stemming from the Social Security debacle, the enormous and ever-inflating stock market bubble, and our country’s irresponsible, massive over-indebtedness. (By the way, me citing only three problems is just my way of being kind; you should see the top 15 issues that have Americans concerned, according to a Gallup poll.)
And don’t let the fact these problems are generally well known desensitize you to the magnitude of the potential damage they could one day pose to you and millions of other American retirees.
It’s hard to imagine there won’t be some kind of economic consequences when the biggest pension plan in the world fails — just as there are always repercussions when stocks markets collapse or when governments pursue an economic model that’s so transparently unsustainable.
Failing to prepare means preparing to fail — you’ve heard that aphorism before.
While we can all afford to delay a few things in life, planning for retirement shouldn’t be one of them. The fact is no one can afford to jeopardize the quality of life in their golden years or the welfare of the people they care about when they’re no longer able to provide for them.
In an age in which one could hardly trust his or her wellbeing to the bureaucrats and career politicians who call Washington, D.C. home, it becomes imperative to take matters into your own hands in order to ensure nothing is being left to chance.
Preparing for retirement means doing your homework and digging down deep into your financial situation — but that’s not to say it has to be difficult or unpleasant. In fact, working with an advisor who can help you to clarify your own personal goals and then working collaboratively to determine the best course of action for your individual needs, can be very empowering.
In fact you may discover having a new-found sense of calm or confidence or maybe even find you’re sleeping a little better at night; just a couple of the benefits some experience after checking off one of life’s major concerns from the big “to do” list.
That said, the biggest risk today is doing nothing — but taking decisive action and moving forward in a reasonable and intelligent manner, can significantly improve your chances of success over the long term.
You hold the future in your hands, and there’s simply no better time than now to begin creating a compelling, secure tomorrow for yourself and the people most important to you.