Planning for Success

Planning for Success

We are planning a vacation for later this summer in the Rockies. With the internet, there is too much information and too many choices. One could spend hours and days just trying to figure out what to do and see. The possibilities are all exciting and I’m looking forward to it.

But Americans are apparently not nearly as excited about their retirement years. We spend almost no time planning for those. For many of us it will last for decades. Currently the average is 18 years of retirement, but that fact will not help you if you personally live much longer than that.

There is an old saying that people don’t plan to fail, they just fail to plan. Not many successes in this life happen without making goals and being intentional. Failure is easy. Unfortunately, even when our incomes are higher than the rest of the world’s, most Americans are failing.

Fully 45 percent of American adults have saved nothing for retirement yet. This includes 40 percent of Boomers, those born before 1964. The average net worth for those ages 55-64 is only $45,447. Too many (20 percent) of those with a 401k plan are taking loans or withdrawals. Four in five between 30 and 54 already believe they will not have enough saved for retirement. Over one third of those already 65 are completely dependent upon Social Security payments.

There are different reasons for this. With two stock market craters in the past 16 years, some think a safe, secure retirement is a pipe dream and are discouraged. Some Americans are derailed by a disability that cuts off their income. That’s why I am a passionate proponent of disability income insurance while working and a believer in Long Term Care insurance for the ultimate disability.

Expectations are the key issue, in my opinion. As Americans, we think we have a birthright to the lifestyle of the semi-rich and famous. When we leave home, we expect to move into a place as good as we left. If we don’t have it, we never leave. We want the next new model of Tesla so we can feel as good about the environment as we know we will look in a new car. If I invested in higher education, I expect to start at $50,000 or more and work up from there. Come to think of it, perhaps under the next President, the government will reimburse me for the $25,000 (in 1970’s dollars) I spent during university and law school!

In the meantime, reality slaps me up the side of my head. If I have not and do not save money for my future old self, I can’t think of any good reason everyone else owes me a good lifestyle for those decades.

Our original American social contract went something like this:  We all have an opportunity to work our tails off serving others in a way that we choose. We will provide for ourselves and our families the best we can. We will pull the wagon with those in it who cannot provide for themselves.

I like that contract. I have been blessed with great health, great genes, a great family, and a will to work hard in serving others. Oh, and I really like being able to decide myself to share with others far beyond what I have to do through my taxes. For me, that is a really good reason not to retire until I have to. Somewhere around 80 or 90 I hope.

There are many good financial advisors in your community. Make an appointment with one and invest time for your future life, not just the present. I would rather not see you in the wagon I am helping to pull unless you could not provide for yourself. This life indeed is not fair. If it were, we would not be nearly as well off as we all are.

(Past performance is no guarantee of future results. Advice is intended to be general in nature. Statistics: http://www.fool.com/retirement/general/2016/01/26/20-retirement-stats-that-will-blow-you-away.aspx)

May 19th, 2016|Categories: Personal Finances|