How, Like Indy, to Outrun the (Retirement) Boulder

With the upcoming release of Indiana Jones and the Dial of Destiny (June 30), viewers will get to enjoy the fifth film in a storied franchise launched by Steven Spielberg more than 40 years ago. Spielberg has said he has a preoccupation with ordinary people who are pursued by large forces, and this sentiment is at the core of his storytelling, as seen in Jaws, in which a mismatched crew of three battle a giant shark, and in E.T., in which a little boy protects a gentle alien from grown-ups.

The storyline can be similar for ordinary Americans as they pursue retirement. Large forces may be working against them, like the 12-foot boulder that once threatened to run down Indy in Raiders of the Lost Ark. These forces can prevent them from retiring comfortably or maybe even from retiring at all. Before you star in your own storied retirement, take a moment to learn how to conquer major forces that can stand in your way.

Force No. 1: The monster within

Many investors headed into retirement are battling the worst monster of all: procrastination.

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While a fictional Spielberg hero benefits from a well-written movie script, many retirees jump into their journey unscripted and unplanned. In fact, according to RIA Intel, more than three-fourths of Americans don’t have a written retirement plan, and 37% have done no planning at all.

We may be overwhelmed by the notion of retirement, afraid we’ll make too many planning mistakes, have other priorities or just lack a sense of urgency.

The result is no Hollywood ending. More than half of Americans are behind on their retirement savings, and nearly 20% regret not saving early enough, according to a survey by Bankrate.

How to fight the force: The best way to battle financial procrastination is to protect yourself against you and avoid close encounters with regret. Develop a savings plan with targets and goals and stick to it.

Some investors find success working with a checklist that identifies the milestones associated with an effective retirement plan and the age or point in time at which they should achieve each one. Breaking retirement planning into small steps can be an effective way to get started.

If you need a boost, consider artificial intelligence (AI). No longer only reserved for a Spielberg sci-fi, AI supports real financial conversations and suggests real-time answers and solutions. While AI can be a great way to kick-start your thoughts, don’t act on the suggestions you receive without external validation.

AI is clearly a useful tool, but it’s no substitute for the expert guidance only a financial professional can provide. Still, it can help you start the process and get past the minutiae that may be paralyzing your planning.

Force No. 2: Fear of the great unknown

In Allstate ads, the insurance company personifies Mayhem as the irreverent villain threatening the safety of our homes and autos. You could make the same case for the threat of extreme market volatility on the safety of our financial portfolios.

As Karee Venema of Kiplinger.com noted at the end of last year, “Stocks exited December with a whimper, serving up their worst annual performance since the Great Financial Crisis year of 2008.” The New York Times also noted the sell-off affected everything from tech stocks and Treasury bills to cryptocurrencies and real estate, indiscriminately wiping trillions off stock market capitalization while taking “a huge bite out of average investors’ retirement plans.” Plus, bonds have been volatile, and inflation has hit record highs.

When volatility strikes, it’s difficult to reduce stress and dampen the noise of the moment. It’s also tempting to follow the herd and make impulsive decisions based on emotion. According to our research here at Jackson, 70% of investors surveyed are checking their investments at least a few times a month.

While awareness can be good, that frequency can lead to questionable moves motivated by anxiety, as a majority of adults are stressed about their personal finances, according to a CNBC survey.

How to fight the force: If you’re fortunate enough to have a 401(k) or other defined contribution plan, keep contributing and don’t waiver. Pausing contributions, even in a down market, will result in a loss in compounding earnings, which typically outperform any potential for savings you may think you're getting on the sidelines. “The most powerful force in the universe is compound interest,” said Albert Einstein, even calling it the “eighth wonder of the world,” according to Inc.

You really don’t have to do much to be strategic with your savings. Consistency is the key. When you make regular fixed-amount contributions to your plan by payroll deduction, you are using dollar-cost averaging. Your contributions buy a different number of shares of investments each payroll period because the price varies. You buy fewer when the cost is high and more when the cost is low. This is simple, consistent and non-emotional. While there is no guarantee, it may help reduce market risk and preserve capital.

Saving is essential and a good first step, but consider what’s next. A financial professional can help you implement a next-step retirement master plan with investing goals and allocations, tax and expense management and strategies that can protect and grow your income.

Many investors benefit from simple methods and transparent metrics. Never underestimate how valuable it is to take an uncomplicated approach.

Force No. 3: The post-retirement void

When we retire, time can trick us. The eight-hour workday can turn into a 16-hour daily playdate. More time on the clock may be liberating at first, but it can throw you off balance as lines blur from weekdays to weekends.

As the American Psychological Association notes, retirees experience a “sugar rush” when they enter retirement that’s often followed by a crash when feelings of well-being and satisfaction are followed by a sharp decline in happiness.

How to fight the force: Work is not only the counterbalance for enjoying leisure time, but your career can also be the hub for your primary people and purpose. What do you do when you leave the workplace?

Here’s an example. My father was a force of nature in retirement. He transitioned from civil engineer to antiques dealer without losing a beat. He turned a life-long passion into a post-work profession of treasure hunting and never looked back for 30 years of a fulfilling retirement.

In the words of Indiana Jones, “If you want to be an archaeologist, you gotta get out of the library.” Behind every successful retirement script, you need the motivation to start, a financial professional to trust and a personal story to live.

Jackson, its distributors, and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Tax laws are complicated and subject to change. Tax results may depend on each taxpayer's individual set of facts and circumstances. You should rely on your own independent advisors as to any tax, accounting, or legal statements made herein.

Jackson is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company® (Home Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York). Jackson National Life Distributors LLC. CNB103429 04/23