Top 10 Retirement Procrastination Problems

Often in life, what you haven’t done ends up being more important than what you have done.

I find this to be especially true in the world of comprehensive retirement planning.

Despite constant reminders about “knowing your number” and preparing for the “retirement red zone,” some people just aren’t willing or ready to get a plan together. Or, if they have a plan, there are important details that have gotten away from them.

Over the years, I’ve come up with a couple of “Top 10” lists that I hope will nudge the non-believers, the procrastinators and the just-plain-stubborn folks toward setting things right so they don’t pay the price for those gaps in their comprehensive retirement plans.

The Top 10 Things Most Retirees and Pre-Retirees Are Missing

1. A written financial plan. No, the plan in your head doesn’t count.
2. A safety net in the form of a pension and/or annuity income. If your employer doesn’t offer a pension, you can create your own to have guaranteed* income in retirement.
3. A new attitude about risk. Your portfolio should be adjusted to avoid volatility as you move from the accumulation phase to the distribution phase of your life.
4. Investments that generate adequate income to support a desired lifestyle. The safe savings vehicles your parents used simply aren’t keeping up with inflation these days. You have to move on.
5. Life insurance. This is especially critical if you have debts and/or inadequate savings and dependent loved ones.
6. A plan for Social Security. When and how you file can maximize the amount of retirement income you and your spouse will have to live on for years – possibly decades.
7. Proper beneficiary designations. Without these designations on retirement accounts and other documents, your estate could end up in disarray, adding to your heirs’ challenges when you die. Make a note to update them annually.
8. Long-term care insurance or some other plan of action in the event of a long-term disability or illness. There are many new insurance products that can help you to prepare so you won’t go broke getting care.
9. Powers of attorney. You’ll need these for handling health care and/or financial issues if you become disabled.
10. A will or estate plan. Telling your spouse and kids what they’ll get when you die just won’t cut it.

Now, I’m certain you have at least one good reason for not attending to one or more of these critical items. Let’s see if it matches any of the excuses on my next top 10 list.

Top 10 Excuses for Not Taking Action

1. Change is scary. People say, “If it’s worked for me for 30 years, why should I make any changes now?”
2. Analysis paralysis. Some folks overanalyze every possible outcome to the point that it becomes impossible to make a move.
3. Peer pressure. Their friend Bob seems to be doing great, and at the last barbecue, he shook his head and rolled his eyes at the idea of doing all this “work” to retire.
4. Family pressure. Change Bob’s name to Uncle Bob, and you have the same story.
5. Lack of knowledge or expertise. I get it. Sometimes you don’t know what you don’t know. But you can always ask.
6. Too much information. They pay attention to the news – “sound bites” on CNN or headlines on the Internet – and get excited or frustrated, but never think about putting it into context for their own situation.
7. An unwillingness to trust financial professionals. Maybe they were burned in the past (or Bob was), and they can’t get past that bad experience.
8. An inability to take advice. They know best, and that’s that.
9. An unwillingness to pay for investment services, financial planning, tax and estate planning advice and implementation. “Why pay when you can do it online for free?” they ask.
10. An inability to face their own mortality. Thinking about death is scary, and some people are so superstitious, they believe that if they make an estate plan, the Grim Reaper is more likely to pay a call.

So how can you get past the list of excuses and work through that list of missing items?

I suggest meeting with an adviser who charges a flat fee to put together a comprehensive retirement plan. Once you write a check for something, no matter how small, you’ve made a commitment. You are now “invested” in the outcome. And because you are invested in the process, you will be more likely to implement the recommended course of action.

If you like the adviser who draws up your plan, who knows? You may decide to continue working with that person. Regardless, at least you’ve gotten a start.

*Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

Kim Franke-Folstad contributed to this article.