If the past year has taught us anything, it is that so many things in life feel “out of our control.” The COVID pandemic certainly has dominated life for the past 16 months. However, stock market volatility, unpredictable weather in all parts of the country, social unrest and a political climate like we’ve never seen before are just a few things that have made life for many more uncertain than ever.
For those preparing for or already in retirement, this can seem even more pronounced. You work hard for many years and begin dreaming of the possibilities for this next phase of life, all while watching things around us happen without much clarity or certainly. Not knowing how the events of today will positively or negatively impact retirement, can be a significant source of stress and worry for those not properly prepared.
It’s more important that, while you dream of the freedom and independence that retirement could bring, you stay focused on three things you can control. I call them the three P’s of your retirement: Philosophy, Process and Planning.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Philosophy
Take time to reflect and understand your own philosophy about what your financial life will be about during those golden years. If you’ve been a diligent saver and good steward with money, will life just be about having an uncoordinated basket of investment or insurance products, hoping they will grow enough to last long into the future? Will you continue to have an investment-only focus, where happiness in retirement will be dependent primarily on positive market returns?
Compare that to having a mindset focused on retirement strategies such as preservation, distribution and coordination. Don’t get trapped into a belief that your investments, no matter how much you have saved, are a RETIREMENT PLAN. Make sure your philosophy is about being comprehensive and holistic when considering all areas of your financial life.
Process
Now that you have begun to shift your mindset from one of “accumulation” to that of “distribution and preservation,” it’s time to determine what your process (or your financial adviser’s process) will be to implement retirement strategies that will help mitigate all types of financial risks as we age.
Designing your retirement “blueprint” should not feel overwhelming, complicated or confusing. Trying to design and implement strategies for all areas of our retirement, such as income, tax, health care and estate planning, can be intimidating and cause us to avoid having the right conversations. Quite often, it leads us back to focusing only on those things we feel comfortable with, such as our investment accounts and fixating on the market.
The process for creating your plan should be systematic, go step by step, brick by brick, addressing each of these areas one at a time. This will seem so much less intimidating and increase the likelihood you will keep your focus of having a comprehensive, holistic and coordinated retirement.
Planning
No matter how systematic your process, the planning you do should be retirement “specific” and “customized” to you. Do not settle for using generic retirement rules and outdated advice. Realize that accumulating your wealth is significantly different than preserving and distributing your wealth. Many areas of your financial life go from being “automatic” or “set it and forget it,” such as investing or creating monthly income, to needing a more active approach.
Something as popular as the 4% rule, which came to be in the early 1990s as a suggestion for the best way to make your money last throughout retirement, is no longer applicable and just a lazy approach to creating retirement income.
Other common considerations and decisions that need to be customized to you and not generic are things such as:
- When to begin Social Security benefits.
- Roth conversions.
- Using tools properly, such as annuities and life insurance.
- Establishing an estate plan that accounts for many of the “what ifs” in life.
Too many considerations about retirement to list here should be customized and specific to give you the best opportunity to live the retirement you want to live.
As the world we live in continues to feel out of control, take a deep breath, a few steps back, and focus on these 3 P’s for an AMAZING RETIREMENT!
Investment Advisory Services offered through Trek Financial, LLC, (Trek) an SEC Registered Investment Adviser. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed, and past performance is no guarantee of future results. For specific tax advice on any strategy, consult with a qualified tax professional before implementing any strategy discussed herein. Trek 21-115.
-
Stocks Rally as Investors Buy the Dip: Stock Market TodayMost sectors are "go" only a day after talk of bubbles, extended valuations and narrow breadth undermined any kind of exuberance.
-
Elon Musk's $1 Trillion Pay Package Vote: What's at Stake for Tesla StockTesla shareholders are voting this week on a massive pay package for CEO Elon Musk. Here's what it means for the Mag 7 stock.
-
I'm a Financial Planner: This Is Why Commitment, Not Perfection, Drives Financial SuccessMeeting your goals is more likely if you stick to your strategy despite market volatility and scary headlines. Consistency makes a difference.
-
I'm a Financial Professional: This Is Why Now Is the Time for Investors to Look AbroadExtreme U.S. market concentration has made international equities not just a diversification play, but a timely opportunity.
-
Four Ways to Make the Most of Your Benefits During Open EnrollmentOpen enrollment is a chance to make sure you're getting every ounce of value from your workplace benefits and on track to reach your long-term financial goals.
-
Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning AttorneyCongratulations on getting your estate plan in order. Now, you need to communicate the relevant details to ensure your plan is effectively carried out.
-
A Nightmare for Parents: How to Navigate the Legal Boundaries of Tenant Rights During a Family CrisisThis family's story illustrates how important it is to get help sooner rather than later and highlights the complexities of tenant rights and legal protections.
-
Eight Steps to Help Get You Through the Open Enrollment Jungle at WorkWondering how to survive open enrollment this year? Arm yourself with these tools to cut through the process and get the best workplace benefits for you.
-
Seven Moves for High-Net-Worth People to Make Before End of 2025, From a Financial PlannerIt's time to focus on how they can potentially reduce their taxes, align their finances with family goals and build their financial confidence for the new year.
-
I'm a Financial Planner: These Are the Seven Tiers of Retirement Well-BeingLet's apply Maslow's hierarchy of needs to financial planning to create a guide for ranking financial priorities.
