By: Lynda Striegel
We have discussed the need to get professional assistance with your retirement plan. Why? For the same reason you would use a brain surgeon to take out a brain tumor! There is no way most of us can understand all of the investment options that are available or how those options might be put to good use in your retirement plan.
Here is the good news – your investigation of professionals will not cost you money, only time. Creating a retirement plan can be done at any age and at no cost. What is required is your commitment to doing it and your time and energy.
- Problems have solutions. You may not like the solutions you come up with as you create your retirement plan, but at least you will have solutions to review. We began this series of newest articles noting that 10,000 baby boomers are turning 65 every day for the next 19 years. And, many of those have no retirement plans in place. The time to begin is now and that is true whether you are a baby boomer or in your 30’s, 40’s, 50’s or whatever. Planning is not rocket science. It begins with a willingness to take a hard and honest look at your own financial situation.
- Use all available resources to educate yourself. Today, the number and variety of free online investment education services is staggering. Every brokerage firm, insurance company and bank has a website full of learning tools, including retirement calculators, that will help you understand where you are and where you need to be. Or, if you prefer, your local library has hundreds of books available to you free of charge. Many library resources are also available online for free, including magazines and trade publications. Your goal should be to take the time to learn the basics of financial planning, including retirement planning. Once you have learned the language of investing, then seek out the professionals to help you.
- Get a second opinion. If you have already been working with an investment professional and are not happy with the results, call them. Meet with them. Discuss your concerns. If you are still not satisfied, seek a second opinion. Take your lists of investments to another professional. Keep doing that until you find an expert who relates to you.
- Do not become obsessed with the daily financial news. You are thinking and planning for long-term success. You do not need to get sidetracked by the daily ups and downs of the market. It’s fine to watch the financial news but keep in mind this is entertainment, nothing more.
- Remember liquidity - your comfort zone. Plan for that cash cushion that feels right to you. Discuss this with your professional.
- Take some investment risk. Why? Because taking some risk will help you to ride out inflation. We haven’t had much of that recently but you can be assured it is coming. That means your portfolio cannot be restricted only to fixed income investments. You need something in that portfolio to help you keep up with inflation. Again, your investment professional will help you select what you need, but you need to know that some investment risk is required to achieve the rewards you want.
- Plan for your loved ones. Get a will or a living trust. Make sure you have a current power of attorney, both medical and financial, so if something happens to you, someone you love will be able to take care of you. Make it easy on your loved ones. Get all your documentation together in one place including insurance policies, car and boat titles, etc.
- Check all of your beneficiary designations to ensure they are up to date. There is nothing worse for your family than finding out after you die that your 401(k) plan proceeds have been paid to some relative you designated when you were single. Remember - “it’s not an if, it’s a when.” When you die, leave behind a plan for your loved ones, not a mess.
Finally, retirement should be a joyous time for you and your loved ones. The most powerful predictor of satisfaction after retirement is the extent of a person’s social network, not health or wealth. Having a plan helps, if course, but maintaining your social networks, giving of yourself to others, these are the predictors of retirement happiness.
This is your retirement. To get the most out of it, you need to make it work for you. Good luck with your retirement!
About the Author: Lyn Striegel is an attorney in private practice in Chesapeake Beach and Annapolis. Lyn has over thirty years experience in the fields of estate and financial planning and is the author of “Live Secure: Estate and Financial Planning for Women and the Men Who Love Them (2011 ed.).” Nothing in this article constitutes specific legal or financial advice and readers are advised to consult their own counsel.