#surf #waves #financialplanning
If Jeff Hall could do one thing every day for the rest of his life, he would surf.
Hall, partner and senior financial adviser with Rather and Kittrell in Knoxville, Tenn., wrote a column about surfing and financial advice in the July 12, 2015, edition of the News Sentinel newspaper of Knoxville.
His main point: the ocean can be tricky. You have control over some things, but not others. But, you can control to whom you listen. Despite the financial crisis in Greece and other places, there is no substitute for setting realistic goals, making a plan and following it and, as he writes, learning from every wave.
Financial planning requires good advice from someone you trust, to be sure. But it also requires discipline. It requires watching where your money goes and resisting the temptation to put it in the wrong places, i.e. spending frivolously when you should be saving vigorously.
A good financial plan involves putting off some purchases until you’ve paid yourself through saving.
Simple? Of course. Easy? Not so, for some. Success comes from doing what isn’t so easy.
You might respond this way: But my job, or my income, doesn’t allow me to save.
There are many ways to overcome that problem. For one of the best, visit www.bign.com/pbilodeau.
Here’s another caution: emotion. Hall says that emotion sells. If you know what you are doing is right for you, don’t let others’ emotion get you off track. Don’t stray from a good plan for emotional reasons. Sometimes, news reports can enhance some bad emotions.
Know, too, that there will be ups and downs. Nothing goes up in a straight line. But good advice and careful planning can make the path a little less rough.
If you have children, it’s important to teach them about money. It’s also important to show them a good example of financial prudence in your behavior. Certainly, kids can be more focused on having fun at the moment, as opposed to postponing getting something they want now.
Still, if you can teach them that every decision has a consequence, ultimately they can set better priorities as they get older.
It’s OK to inject fun into your life. But be realistic in what you spend for “fun.” It could cost you later.
It takes a little effort and a lot of discipline to gain financial independence. It also can take time.
There is no greater satisfaction than retiring comfortably because of decisions you had made when you were younger.
Hall points out that oceans, as well as the financial world, contain sharks. You have to watch for them, for they won’t go away.
Some waves are worth riding. Others, not so much. If you choose your waves carefully, the ride will be less perilous and destination will be sweet.
Peter
Category Archives: Uncategorized
DIFFER WITH YOUR SPOUSE ABOUT HOW TO RETIRE?
#retirement #retirementconflicts #retirementlifestyle
Most of the talk today is about whether a person, or couple, has enough money to retire.
That determination for a couple may ride on what they would like to do in retirement.
USA Today writer Nanci Hellmich discusses why couples should talk about each’s visions of retirement prior to retiring. She took on the subject in a June 26, 2015, article in The Tennessean newspaper of Nashville.
“Couples don’t always have the same dreams for retirement,” Hellmich writes. “It usually takes some negotiating to come to terms with what they’re going to do.”
Hellmich’s article illustrates the point: He imagines summers fly-fishing in a cold mountain lake and winters by the fire reading his favorite books. She envisions summers playing with the grandchildren in their back yard and winters volunteering for her favorite charities.
If we take it further, let’s presume they don’t have a place near a cold mountain lake. They would have to buy or rent one. Let’s also presume that their grandchildren already live near them. To satisfy her, they merely need to stay home – probably a less expensive alternative.
“For lack of a better word, couples need to do some horse trading… You really have to negotiate in good faith,” Hellmich quotes Pepper Schwartz, AARP’s love and relationship expert.
Hellmich’s article gives some talking points for couples: create a list of characteristics for retirement that each spouse wants; talk to family and friends who would have an interest in your decision. If your kids want to have you around, presumably not as just a free baby sitter, you have to talk about it with them. If you don’t live near your children, and they want you to move closer, you have to think about that, too.
Other talking points the article cites include prudently pruning your retirement dream list. Figure out areas in which you can compromise. If the man is a golfer, for example, and wants to play a lot, and the woman is not, make sure, before you move to that golf resort that you vacation there first. Perhaps the non-golfer will be miserable in a golfer’s paradise. The article points out that couples should carve time to listen to each other, and tell each other, after some discussion and compromise, how much one appreciates the other’s give and take.
Of course, it would be best all around if money were no object. He could fish or golf, she could volunteer for charities and hang with the grandkids. There are many ways out there to secure a good retirement income, one in which compromise may not be necessary. For one of the best, visit www.bign.com/pbilodeau.
If you are young, it’s never too early to talk about these things. If you are able, take some types of vacations you might not otherwise take to see how you like them. Your doctors will probably tell you that staying active will be very important as you get older. Just lying on the beach with a book or tablet may not be as nice at 60 as it is at, say, 25. Besides, it may not be the best thing to do for your skin.
Don’t make retirement life a reason to fight. If you love your spouse, this is an issue that likely can be worked out with good, heartfelt conversation. Then again, if you are single, you have the ability to do whatever you want, wherever you want, in retirement. Make sure you have sufficient pennies put away, or coming in, to make whatever you want to happen, happen.
Peter
PURSUE HAPPINESS AND BE HAPPY IN THE PURSUIT
financial independence #takechargeofyourfinances
We’d all love financial independence.
But, what is it? Our parents taught us that financial SECURITY was the most important thing.
Security means a good job, with good benefits that will last you for as long as you want, or are able, to work.
Security is a fleeting proposition. Good jobs, those that might allow you to attain financial independence eventually, are hard to find and hard to keep. In other words, if you have a well-paying job, you will probably make so much money well before you retire that your company will want you gone, because it can hire someone younger and cheaper.
If you want financial independence, keep that good job for as long as it will have you.
There’s something else about today that is different from when your parents or grandparents were young. More people are losing track of their spending, and how much they have saved. So says Tom Coulter, president of Meridian Trust. Coulter wrote a column headlined, “The pursuit of happiness via finances,” that appeared in the News Sentinel newspaper in Knoxville, Tenn., July 5, 2015.
“While few people believe that money alone can make us happy, we do know that people who are confident about their abilities to realize their financial goals report higher levels of life satisfaction than those who aren’t,” Coulter writes.
In other words, to quote colleague Ronnie Paul Waldrep, “Money can’t buy happiness, but it can sure help you work out your problems in style.”
Coulter suggests taking inventory of your finances and making a plan. Determine how to align your actions with your priorities. Buy books, surf the Web or hire a financial planner, if necessary, he says. Most of all, take charge of your life.
As you go through life working toward financial independence, which, for argument’s sake, we’ll define as being able to do what you want, when you want, enjoy the pursuit. For example, Chris Guillebeau reached his goal, or, as he calls it, his quest of visiting every country in the world before his 35th birthday. He discussed his travels and his book, “The Happiness of Pursuit,” in a 2015 interview with Success magazine publisher Darren Hardy. The interview was recorded on a CD included in Success magazine.
As you work toward your goal, or quest, for financial independence, find joy in the journey. Many successful people will tell you that achieving success was not as much of a delight as working toward it. Sure, everyone has ups and downs in whatever journey he pursues, but by keeping the finish line always in sight, the downs become less of a burden and the ups become more of a reward.
If you don’t believe your job alone will give you financial independence, or your best money management efforts won’t get you everything you want to be financially independent, there are many other ways to augment work and discipline. For one of the best, visit www.bign.com/pbilodeau. You’ll find ways to bolster your money management efforts as well as ways to provide an income that has nothing to do with a “job.”
With Independence Day 2015 now passed, create your own independence day. Make today the day you get hold of your finances, start pursuit of your financial quest and find ways to enjoy the pursuit every step of the way.
“Baseball is ninety percent mental. The other half is physical,” says Yogi Berra. Financial independence is largely created by how you think, not what happens to you. Think good thoughts. Take charge of your life. Take enjoyment from your journey. Independence awaits.
Peter
SECRET OF SUCCESS? MAKING UP ONE’S MIND
Many of us look at people we deem successful and believe we cannot be like them.
Either we believe our circumstances are holding us down, or we believe we are not as smart as successful people are or that luck is not on our side.
Rory Vaden, co-founder of Southwest Consulting, spoke to one of the most successful people he knows, Spencer Hays, founder of Tom James fine clothing and executive chairman of The Southwestern Co. Vaden discussed that conversation in a column in the June 28, 2015, edition of The Tennessean newspaper in Nashville.
According to Vaden, Hays believes that success is simply a choice. It’s the choice to do whatever it takes – or not – to be successful.
To most of us, that’s a very simplistic answer. We all would choose success over failure. But it’s not a matter of wanting success in the abstract. It’s a matter of defining success in one’s own mind, and going out and getting it.
In other words, make up your mind to be successful and do what you need to do.
Vaden said the idea of making up one’s mind to be successful was the one thing that Hays said that struck him in his conversation.
It appears to many that making up one’s mind to be successful is very difficult. How many people do you know start something and give up without finishing it, especially when things got tough? These people wanted to be successful at the beginning, but later discovered that what they had to do to get there was not worth the effort or the sacrifice.
An idea has to travel from one’s head, to one’s heart, to one’s gut. When one finds what he wants to do, he does what he needs to do to accomplish it, no matter what happens.
Another scenario: how many people do you know who had a goal, but listened to those who told him he could never accomplish it? The naysayers believe they mean well, and some actually do. But the successful person believes more in what he wants to achieve than he does others’ opinions of him or his goal.
We can certainly find people who might tell the person who lost a job that it was his own fault. Most of us have circumstances we can’t control. Those are not important. What’s important is how we respond when those circumstances hit.
We can complain, and convince ourselves that the world is against us. Or, we can look for something that will give us the motivation we need to conquer our circumstances.
A third scenario: a person has the motivation, work ethic and has made up his mind to be successful. He just needs a vehicle to help him find success. If you are one of those, visit www.bign.com/pbilodeau. It’s one of many, and one of the best, such vehicles for personal success and for helping others find success.
Choosing success is not like choosing from a restaurant menu. You can’t just say you want something and someone else is going to bring it to you. Choosing success is choosing to do what you need to do, regardless of whom or what surrounds you. It’s about believing in your goal, and pursuing it above all other things – except family and friends.
It’s having faith in what you know is good, regardless of what others think. If you choose success, you’ve chosen wisely.
Peter
IS YOUR BOSS WATCHING YOU FROM AFAR?
#employerspying #privacy #spyingonemployees
Imagine your boss forcing you to download an app on your personal cell phone that would allow him or her to monitor everything you do, everywhere you go, both at work and at home.
Would that bother you? What if deleting that app from your phone got you fired?
Heather G. Anderson, a lawyer with the Miller Anderson Law Group, discussed this in a column in the June 21, 2015, edition of The News Sentinel newspaper in Knoxville, Tenn.
Many employers equip their company vehicles with GPS systems to monitor their whereabouts at all times, Anderson says.
Now, a California company has opted to require employees to download an app on their personal cell phones, so they can monitor what the employees are doing at all times, she says.
Certainly, employers can have legitimate reasons to monitor people. They certainly don’t want their employees goofing off, or dealing with other personal issues on work time. Employers may even want to track employees and vehicles in search of better and quicker responses to problems, more efficient use of company property and employees’ time etc.
The big question becomes, what about an employee’s privacy? Anderson says employees expected privacy in the workplace by locking desks, password-protecting documents etc. But employers have discovered that some employees abuse the latitude they are offered in the workplace.
So, Anderson says, if you are an employer, and you don’t want to offer your employees any privacy while on the job, including Internet and cell phone use, you need to spell that out.
But what about monitoring an employee outside of work? Anderson says many states have laws regarding employee monitoring, and some require permission in advance from the employee to do so. Others make it illegal to fire an employee based on lawful activity outside of work, unless specific exceptions apply. Tennessee does not have any off-duty conduct laws, she adds.
Anderson recommends, as one might expect, that employers check with an attorney to determine the rights and risks involved in setting up a monitoring policy.
Many employers will try to get away with anything to learn as much as they can about someone who works for them. They delve into a person’s social media activities, do background checks etc. A rule of thumb here for an employee or prospective employee: if you have something you don’t want your employer or prospective employer to know, don’t put it where it can easily be found. Better yet, keep it to yourself.
The bigger questions, besides the legal ones, become: what limits do employers have? What expectation of privacy should employees have when they go to work someplace? An employer’s curiosity may not stop with the interview question: what are your hobbies?
Of course, you can eliminate the possibility of an employer snooping on you by becoming an independent business person. How? For one of the best ways, visit www.bign.com/pbilodeau. You can work for yourself, not by yourself, and create the freedom to do what you like, without anyone watching. Of course, it’s always best to do good things, even when no one is watching.
As employers look for tighter leashes for their employees ostensibly to improve their bottom lines, they risk sending great, or potentially great, employees out the door. If you are one of those great, or potentially great, employees, your options may not be as limited as you might believe.
Peter
MORE JOBS, LESS SECURITY
#jobs #security #parttimejobs
The United States is gaining jobs, but more of them are part time, pay less than the ones lost and employees haven’t had raises in years.
Sure, McDonald’s, Wal-Mart and other companies have announced employee raises with great fanfare recently, but many of those who work there can’t make a decent living on what they earn.
Associated Press reporters Josh Boak and Christopher S. Rugaber tackled this issue in an article published June 14, 2015 in the Tennessean newspaper in Nashville. In that same Tennessean edition, Paul Davidson of USA Today said many who are working part time are doing so reluctantly.
If you grew up in the 1950s or 1960s, you are at or near retirement. Hopefully, you retired, or will retire, on your own terms. Many have not. If you are currently in your 20s, looking for steady work, perhaps you are cobbling together an income, however inadequate, with one or more part-time jobs. If you are doing that, what are the prospects of you getting the full-time job you need? Are you still living at home with Mom and Dad, and don’t really want to, but can’t afford not to?
The Associated Press article quotes Lena Allison, 54, of Los Angeles. She lost her job as a kindergarten teacher and has worked temporary jobs since. “More people may be working jobs, but they’re like these serial part-time jobs,” the article quotes her.
The AP reporters also point out that hiring has surged in the health care, retail, construction and hospitality and leisure industries. Rick Rieder, a Black Rock investment officer quoted in the AP article, says the country is beginning to see the start of broad-based wage growth. That opinion would surprise many Americans, the reporters say.
But here’s what could trigger wage growth: lower productivity. In the first three months of 2015, productivity dropped 3.1 percent after a 2.3 percent drop in the fourth quarter of 2014, the AP reporters say. Productivity had expanded 2.1 percent annually, on average, since 2000, they add. Companies have been slow to invest in equipment and other assets that might make their workers produce more. Therefore, hiring more workers in the short run could combat that, the AP reporters say.
Still, most workers are collecting no benefits or vacation time with their jobs.
Let’s face it. For most people who have lost jobs in the last few years, the ones they’ve gotten to replace them, if they’ve been so lucky, pay less than the jobs they lost. For those fortunate enough to survive the downsizings, most are working harder and probably haven’t had a raise in quite some time. Fortunately for those employers, these employees probably have no better place to go.
What’s an employee to do in these situations? First, if you have a job you like that pays well, don’t let it go. But, don’t presume it will always be there. Most people are one reorganization, or one bad manager, away from an untenable employment situation. Look for a Plan B that can help you make an extra income while you work, so, if the worst case happens, you can leave your job with a smile.
If you are in need of something to relieve an immediate income problem, the same solution could apply. There are lots of great ways to make extra income outside the traditional employment arena. For one of the best, visit www.bign.com/pbilodeau.
Don’t let the numbers fool you. Things may appear to be getting better as far as economic numbers go, but little has trickled down to the average person. With very few ways to get meaningful help from this situation, decide today to help yourself. Save more. Spend less. Look for a Plan B. Don’t waste energy complaining about what is. Use that energy to look for, and find, what can be.
Peter
WHAT IS THE ‘RIGHT THING?’
#knownunknowns #unknownunknowns #outthere #therightthing
Doing the right thing can be hard.
This is not just about honesty. It’s about making the right decisions in complicated and difficult situations.
Philip Mudd, a former CIA analyst, talks about this in his book, “The HEAD Game.” HEAD is an acronym for High Efficiency Analytic Decision-making. The book was reviewed by Michael Shermer in the May 27, 2015, edition of The Wall Street Journal.
Shermer’s review discusses decisions made by government, particularly presidents. He says Mudd used his experience as a young CIA analyst in the 1990s, trying to predict terrorist attacks. He sorted through the experiences of Somali extremists in America, and how they might be raising funds in America for terror activities abroad. But by raising questions only associated with fund-raising, the analysts, including Mudd, failed to imagine a more acute problem: recruiting young fighters to become terrorists, Shermer writes.
Former Secretary of Defense Donald Rumsfeld is famous for using the phrase, “known unknowns.” A known unknown, for example, is that one knows terrorists will strike again, he just doesn’t know where. The question then becomes, how does one get to know “unknown unknowns?”
The book talks about finding people who would ask questions that are totally far afield of current thinking, and actually exploring those questions, Shermer writes.
The idea brings to mind the Charles Schwab commercials in which a child asks a parent questions about the parent’s relationship with his investment adviser. The parent, then, has a difficult time coming up with suitable answers. The point of the ads: “are you asking enough questions about how your wealth is managed?”
Sometimes, we may have to get advice from someone we think might be totally “out there” in their thinking. Sometimes, accepting things the way they are is just not the right thing to do. It may be difficult to stray from the knowns, or the known unknowns. But sometimes, it’s necessary.
Take a look at your life now. Are you just accepting what is, just because? You may think you know what you don’t know, but do you really?
Shermer writes that Mudd’s book suggests using “left-to-right thinking,” asking completely different questions about a particular problem, in search of the unknown unknowns.
One question you might ask about your own problem, such as not having a job or income that you need, is: if I don’t have a job, or I have a job that is inadequate for me, is getting another job the only solution?
If you are in or near retirement, and you haven’t saved enough, one question you might ask yourself is: is there something I can do to make up for the bad circumstances or bad personal decisions I’ve endured all these years, so that I can have a relatively comfortable retirement?
One of the best answers to both those questions may appear at www.bign.com/pbilodeau. For many, this may be an unknown unknown. For others, it may be something that someone “out there” would find. Yet, the answer you’ve been looking for could be in there, if you choose to find it.
So, what do you know that you don’t know? What don’t you know that you don’t know? The key to finding the answers may be to ask a question you might never have thought to ask. Or, it may be to find someone “out there” who will ask it for you. If you choose the latter, as Mudd’s book says, you have to give those “out there” the chance to be heard.
So release the parameters in your thinking. Go “out there.” Explore what might be “out there.” Try to know what you don’t know you don’t know.
Peter
MORALITY AND LAWS: HOW DIFFERENT ARE THEY?
#morality #legal #morals #laws
What is morally right, and what is legally right?
By definition, laws are secular. They are created by governments and, in the United States, by the will of the people, at least in theory.
Morality is something we believe in wholeheartedly. It’s a personal endeavor. We use it as part of self-definition, whether we get it from teachings, scripture etc.
Bishop Joseph Walker III, pastor at Mt. Zion Baptist Church in Nashville, took on these questions in a May 24, 2015, column in the Tennessean newspaper in Nashville.
Walker says both law and morality are matters of interpretation. As a Christian pastor, he sees morality as founded in the Bible. There are other faiths which use other religious texts as their moral compasses, he says.
His task as a pastor is to lead people so that they discover what is moral and immoral, based on scripture and spiritual revelation, he writes.
For some with deep convictions, morality is concrete, inflexible and void of compromise. For others, morality is fluid, with the ability to change as new interpretations emerge, the pastor writes.
Because we cannot pass laws based on one set of religious or moral standards, one’s morality and what is legal may conflict.
Because, at least in the United States, there are people of varying religions, beliefs and moralities, laws have to determine right from wrong based on that context. As we see watching governments in action, it’s no easy task. Yet, it is necessary.
By definition, laws have to contain some compromise, yet define right from wrong as clearly as they can. That makes it possible, even likely, that people can be wronged by laws, while those same laws make things right to others.
When laws seek to define morality, it becomes a slippery slope, Walker writes. He then asks, “should our rights be protected by the law, whether they are deemed moral or not? Should the law protect any religious rites? The jury is still out.”
Laws do their best to seek justice for all, regardless of one’s beliefs or definition of morality. The Constitution of the United States allows one to worship as he pleases, as long as he hurts no others. So one’s rites and rights can be protected simultaneously. One’s morality could be offended by certain laws, but that should not stop one from believing personally in a certain morality.
Often, we are confronted with laws that allow certain behaviors we consider immoral. In reality, often these behaviors have little, or no, effect on us personally. So, we can privately condemn the law, and still live a life we consider moral.
As laws attempt to seek justice for all, we have to be careful not to judge. As we carry ourselves in our own morality, we do our best to portray that morality vividly, while not condemning others who do not believe as we do.
We must obey the laws, even as we may consider them immoral. We do so with clear conscience by acting within our own moral code, regardless of others’ actions.
As one ponders these questions, he should strive to be the best he can be, within his own belief system. He must also strive to help others, regardless of those others’ belief systems. For a great way to do that, visit www.bign.com/pbilodeau. You could be sharing a great bounty while still following your own moral code.
Peter
ARE OUR LIVES TOO CONVENIENT?
#convenience #inconvenience #tooconvenient
Is there such a thing as being “too convenient?
Eric Weiner refuses to buy an Apple Watch because it would make his life too easy.
Weiner, author of the forthcoming book, “The Georgraphy of Genius: A Search for the World’s Most Creative Places From Ancient Athens to Silicon Valley,” discussed this in a column he wrote for the Los Angeles Times, published in the June 7, 2015, edition of the News Sentinel in Knoxville, Tennessee.
Though he is not advocating the return of the inconvenient Paleolithic Era, he writes that too often we fail to recognize the full cost of our convenient lives. He cites all the plastic K-cups clogging the ecosystem, as well as personal and social costs of convenience.
The cost to workers of convenience can be harsh. A company can find a machine, or mechanical process, to do the work once done by humans. When that happens, humans lose their jobs and, in today’s world, may not be able to replace them.
Think, too, of all those disposable diapers, which Weiner cites. Yes, diaper pails and laundering cloth diapers is very inconvenient, and can be smelly, too. But those disposables s don’t recycle, though there are experiments around the world attempting to recycle them. Usually, though, they just go into the environment and, hopefully, degrade eventually.
Weiner also cites the convenience of shopping at Amazon. Point, click, enjoy, he says. Online shopping has led to the closing of many stores and placed store clerks, managers, shelf stockers etc., out of work.
Weiner says we, as humans, crave boundaries, obstacles and inconvenience. Buddhism is not an easy religion, as anyone who has attempted to meditate for five minutes can attest, he writes.
Yet, it’s an immensely popular religion worldwide, he says.
If, as Weiner quotes the late philosopher Robert Nozick’s notion that, we could imagine a happiness machine, would we want to be hooked up to it? Though the instinctive answer might be yes, the actual answer is no, because we want to earn our happiness, he says.
That brings to mind the notion that we appreciate more the things that we earn, than those we are given. If a college student has to pay for his own education, the thought goes, he will work harder in school. If the student is given a full scholarship, he may not work as hard.
Obviously, that doesn’t apply to everyone. Those with real gratitude are thankful for any blessings they are given. They will work to ensure that those blessings are not wasted, and will pay it forward as opportunities arise.
If you are looking for such a blessing, visit www.bign.com/pbilodeau. You’ll see stories of others, perhaps like you, who have been blessed beyond their wildest imaginations, realized it and worked not only to help themselves, but also to help others take advantage of those blessings.
Yes, our lives are certainly more convenient than those of our parents, grandparents and other ancestors. If you believe your forebears were happily inconvenient, perhaps they were. But true happiness has to start from within, and not necessarily be influenced by the things around us.
So be happy, healthy and prosperous. Choose your conveniences wisely.
Peter
RETIREMENT PROSPECTS DON’T HAVE TO BE GLOOMY
#retirement #SocialSecurity #employment
It’s been said many times, in many ways: many of us don’t see how we can retire.
Perhaps we haven’t been able to save enough. Perhaps we won’t be getting the pension we were promised. Perhaps we believe Social Security will be tapped out before we can tap in. Or, perhaps we’ve been put to the curb by our employers at middle age, can’t find a comparable job and have to “retire” before we want to.
Robert Powell, editor of Retirement Weekly, discussed some of these issues in a USA Today column, published June 1, 2015.
Powell talks about postponing retirement until age 70. That’s fine, if you like your job and are able to do it. Bob Schieffer, the longtime newsman with CBS, had recently retired at age 78. But, most employers won’t exercise that much patience. Once an employee hits middle age, he or she usually begins to get messages about “early retirement.” For many employers, a middle-age worker, particularly one who has been with the company a good number of years, is taking a lot out of the company in salary and benefits. If that position is vital to the company, then it can be more economically filled with a younger, less senior person, who may bring some new energy to the company.
Now, if you are able to extend your employment, there are great benefits to waiting until age 70 to collect Social Security. Powell says your benefits could go up by 76 percent by waiting. Basically, delaying Social Security should be a no-brainer for anyone who doesn’t need the money in retirement. It’s a whole different matter if you NEED the Social Security money to survive.
Powell also talks about the longevity risk. Will you outlive your money? One way to avoid the longevity risk, assuming you’ve been able to save some money, is to only tap the dividends, interest and other earnings your money generates, without dipping into your principal. Certainly, people are living longer and the longevity risk is real. If you are already middle age, your parents and grandparents would envy the longer average lifespan you now have. If you are young, presume your average lifespan will increase further. Start saving whatever you can TODAY, and don’t touch it until you retire.
Again, this is easier said than done when you don’t earn enough at your job, your employer doesn’t offer retirement benefits of any sort etc. Take this hint: live within or below your means. If you aren’t making much, look at what you spend your money on. Buy what you can afford, when you can afford it.
If you are married, postpone having children until you are financially ready to care for them. If you are single, look to share a household with friends to lighten individual expenses.
Powell also talks about home equity. There are some famous people out there touting reverse mortgages, which are a fine solution for the property-rich, cash-poor retiree. Perhaps it’s best to consider this option a last resort. Some of the ads say you retain “complete ownership” of your home as you draw cash from the equity. Your name is on the deed still, you are responsible for all the maintenance of the home, but the lender owns whatever chunk of equity it has turned into cash for you. If that doesn’t matter to you, then check out the reverse mortgage option as a last resort.
One thing Powell doesn’t mention is the idea of re-inventing oneself. If necessity is the mother of invention, then retirement, for some, is the mother of re-invention. There are multiple ways out there to make an income, perhaps even a great income, without having a job, pension or other source of funds. For one of the best, visit www.bign.com/pbilodeau. You have to be willing, perhaps, to re-invent yourself. Or, you have to be looking for a way to cut spending and earn more money. But a retirement solution could be waiting for you, if you are willing to look at it.
The retirement picture doesn’t have to be gloomy, particularly if you are young. But it does take some thought, perhaps some habit changes or courage to re-invent. It’s OK to be afraid, but sometimes we have take action while afraid. That action, gradually or quickly, can ally our fear.
Peter