Taking the Fear Out of Your Financial Future

Main Questions Asked:

Why might I be tempted to move my retirement plan goal posts?

How can a good plan prevent me from changing important elements of my retirement plan?

What financial decisions need to be made when my life circumstances change?

Key Lessons Learned:

Reasons Why People Move the Retirement Plan Goal Posts

• How much cash do I need? You don’t want to move the goalposts based on how much cash you have in the bank. The only money in the bank should be money that you’ll need in the next year or two everything else should be invested.
• When I’ll get serious about my savings. Just save more money. Don’t wait until you finish the kitchen or go on your next vacation. Just bite the bullet and start saving.
• I’ll reduce my risk tomorrow. You can reduce your risk without parking your money in cash. The bank does a good job for the short-term one to two-year money.
• Picking a retirement date. The key is to have a financial plan, so you won’t be afraid and keep pushing your date back. With a plan, you know exactly when you can retire.

Listener Mail

• I’m a dentist who is retiring. Should I sell my building or rent it out? Calculate your actual yield to determine if keeping the building and renting it out would be your best bet. If you’re not getting $35,000 or $40,000 a year on that half a million-dollar asset, you may be better off selling the building and investing the money.
• My husband and I are getting divorced in the next year or two. I’m already retired, and he’ll be retiring in the next couple of years. Will splitting our assets affect our retirement picture? It’s time to back up and make a financial plan based on you being the only person in the plan.
• The airline I fly for is eliminating pensions and offering buyouts. Should I go ahead and retire? What should I do with the pension buyout? You need a retirement income analysis to decide if you can retire. The buyout depends on the formula behind the buyout and the amount of the lump sum and monthly checks.