The Wall Street Journal put out a sobering report saying the generation entering retirement is in terrible financial shape. So, how can you be the exception?
The article made some great points namely these well-researched stats:
- Debt is up to levels it's never been before.
- Life expectancies are up.
- Health care costs are up.
- Wages have flat lined.
For the first time since 1950, we've seen a prolonged period of folks ages 55 to 69 that are not seeing growth in wages.
That's scary because if all these other things are going up and we're going to live longer, but our wages have flattened in the final years before retirement that is a real problem.
Many people don't realize, that the current generation of folks retiring is the first generation to ever retire on a 401(k), which is what I call a market driven retirement. It is very different to retire with a set guaranteed pension, like our grandparents did, versus retiring with a an amount of money that goes up and down in the market.
That's a whole different level of instability. Here's how I believe you can experience a different story than what is true of the masses:
The challenge in today's "market-driven retirement"
It makes sense that a lot of you right now are looking at your retirement going,“This just feels uneasy to me.”
First of all, just because you're feeling anxiety about retiring doesn't mean you're necessarily in a bad place.
The number one challenge of a market driven retirement is that it's on you to be totally responsible for the success of your retirement plan. And that’s never been the case before.
It's a brand new reality we're facing.
You might make just as much money as the previous generation with pensions made and you can be just as successful as they are, but you have to carry the weight of making it happen. That's the challenge in a market driven retirement.
There is really no second chance in today's world of retirement, because in the end it's on you.
There's no institution there backing you up, saying, “Listen you don't have a choice. We're going to save the money for you. We're going to make sure it's okay.”
how do you retire in the new reality of retirement?
It's understandable why fear is so crippling for those planning for retirement.
My advice: You need a coach. You need someone there staring you down and saying I'm with you. I'm pushing you. I'm behind you. We've got this.
Pensions used to be the easy coach. It wasn't even in many of our grandparents' control. But now, with a market driven retirement, you need to find a coach.
Whether its a financial planner like me, a friend, a coworker, a relative. If you are not getting some sort of coaching and mentoring, helping you, standing behind you, pushing you forward over time to develop these habits, it's going to be really hard when you get to retirement.
I had a client come in recently. She was incredibly successful had done well for years. She had a high level of education had a great job. But she came for coaching because when we started getting into her financial situation, the problem was not that she wasn't making enough money. She was making plenty of money but she was carrying heavy debt and she wasn't paying it off or putting away enough.
She wasn't making the best decisions so she needed someone to sit and go through the line by line with her and set goals for where she wanted to be and for what she wanted for her future. If we want to reach those goals, we have to start doing these things today.
She could have done this on her own, but it was a totally different feel when there was someone walking her through that, giving her coaching and then following up and providing accountability. Not so that she could feel shame and guilt, but so that she could see real tangible progress.
are you ready to Take It a Step FUrther? Good, It's time.
Beyond just coaching, you need a strategy.
Strategy is so important in a market driven retirement because not all tools are the same.
Financial products, financial options, and investments are all tools. They're not good or bad but they do have strengths and weaknesses. You wouldn't look at a hammer and say that's a good thing or a bad thing. It has a job and if you try to use it incorrectly, it won’t work!
So, you have the tools at your disposal but your strategy for using them is key.
One of the key things to understand is that not all tools are the same and that income tools that are good for growth, like a 401k or an IRA, are not great at income. They're built to go up and down and it's not good to pull money out of something when it's going down.
I sat down with a couple recently and created a pension for them through an immediate annuity. They created their own pension with a small amount of their money, but it was enough extra guaranteed income to stop having to pull so much from the market. More of their guaranteed costs were covered and their anxiety went down. Now the money in the market was able to grow and increase to beat inflation over time.
It wasn't that they suddenly had way more money. It was that they could take their money and put it in this pension and get a far higher distribution rate where it was covering a lot more of their needs.
It was just a strategic change. It's the same playing board right there with the same pieces buT they had no clue How TO Use Those Pieces.
You Have A Coach, You HAve a financial strategy, now Take It Home!
A lot of strategy is understanding all the tools at your disposal and then figuring out how to leverage the current strengths that you have.
Some of you right now you have all these pieces on your chessboard:
You have money that you've saved,
you have inheritance that you've received,
you have insurance policies,
you have income that you're making,
You have all these different parts of your financial world but you don't know how to put them together.
If you don't have that strategy or if you want coaching to get you there, that is my passion and I've done it with clients both here in Atlanta and around the country. I'd love to help you with your specific situation and meet you and your family!
Let’s get you out of that state of fear and anxiety and move you ahead of the pack as you get closer to retirement.
The game has changed. Are you positioned with the right coach, the right strategy, and the right interactions of your tools? Take the time to understand the rules of retirement today so you can live the life you want.