It’s not whether you get knocked down, it’s whether you get up.” – Vince Lombardi
NFL pro-football games run quite longer than the 60 minutes reserved on the clock. The Wall Street Journal calculated that an average NFL game lasts about 3 hours, but if you tally up the time when the ball is in play, the action amounts to a meager 11 minutes between 100 or so commercials.
At the same time, your retirement may go on quite longer and cost more than you may ever imagine with unexpected injuries and field issues that may throw off your game plan along the way. While you may get a few lucky bounces, breaks, referee calls or stock picks right, luck is not going help you to maintain your retirement goals for the long run nor land you a starting position in the NFL.
With many Americans greatly unprepared both mentally and financially for retirement, don’t leave anything to chance. Always focus in life to dispel negativity, keep your “head in the game,” develop a plan of action and work it. The following are our top 3 strategies to help coach yourself to a successful retirement.
The most important ingredient of retirement planning is time. If you are old enough to remember, the tradition of receiving an engraved gold watch originates back to the 1940s with Pepsi. Their slogan noted that “You gave us your time, now we are giving you ours!”
Seventy six years ago, life expectancy for men and women was 63. With improvements in healthcare and medicine, life expectancy today is 78 for men and 80 for women (Berkeley.edu), with many folks on track to be “nominated” for a Smucker’s jar on TV when reaching their big centennial milestone.
Determining your future lifestyle budget along with estimating how much “lump sum” you will need to retire at a specific age based on an approximate 3%-4% portfolio distribution rate is a good start to help drill-down your retirement play-book basics
Consider the following “savings factor” rule of thumb. Aim to save at least 1x your annual income by age 30, 3x by 40, 6X by 50, 10x by 60 and 13-15x your expected annual income by 65. If you do not expect Social Security to be fully in-tact by the time you retire, you may need to save even more.
Simply put, 50% of your pre-tax retirement paycheck may need to be replaced by savings, with the balance (of up to 80%) covered by Social Security and other income resources you may have available from a pension or rental income to part time work through your golden years.
Don’t throw a Hail-Mary
When quarterbacking your retirement, don’t get impatient or greedy and attempt to throw a “Hail-Mary” with your nest-egg. How you manage your money and your “money-mindset” before and during your retirement years is more important than how you manage your time.
Investing, like football, should be executed with a patient, disciplined strategy while encompassing more of a “running game” yard-by-yard through diversification than a “passing game” with “hot” IPO’s, individual stocks and sectors when advancing the ball down the field.
There are many comparisons between the world of investing and sports, from stats and predictions to superstar players and investments that are on top of the charts one year and out of the game the next. Always be vigilant. Darts, tarot cards, “best-of” lists, Cramer’s top picks and tips at cocktail parties or at the office are not smart strategies.
Start out by developing a strong team of “players” in your portfolio while maintaining a long term strategy such as asset allocation. When evaluating investments, consider to utilize “the five “P’s”: (1) Process (2) Performance (3) People (4) Parent and (5) Price. Like football, how the team works together is more important than each individual player.
Advancing your portfolio down the field each year in a smart, methodical manner is built on best practices based on ongoing investment research and timely execution. Allocate with bonds as your defense and stocks as your offense as the foundation to a strategically diversified portfolio while maintaining a globalized approach.
Most important, consider to work with an accredited investment advisor to help “quarterback” a sound investment strategy based on your goals and risk tolerance. These are the same traits that define NFL Super Bowl team champs as well.
Create a Retirement Playbook
The NFL notes that a playbook is a confidential collection of a team’s plays, including diagrams, strategies and terminologies. “Each player is expected to know his playbook like the back of his hand. These books are typically filled with more than 300 pages of plays and schemes.”
While this may sound like exhausting prep for a football game, many people appear to have completed little to no prep for the game of life! Not knowing your own retirement numbers and options is like driving blind. A relevant goal without a time-based measurable outcome is like a sports competition without a scoreboard or scorekeeper. Numbers are an essential part of planning.
Consider to utilize the “smart” approach to your retirement playbook, and not just “wing it.” S.M.A.R.T. is an acronym for the 5 steps of creating specific, measurable, achievable, relevant, and time-based goals. It’s a simple tool used by athletes to go beyond the realm of “fuzzy goal-setting.”
The cliché pictures of retirees golfing and fishing along with taking endless cruises to the Caribbean has morphed into a more active lifestyle as boomers are ‘redefining’ retirement.
Age Wave retirement-guru Ken Dychwald explained that “today as we move to and through retirement, and gradually break the habits formed over a lifetime of hard work in a workaholic culture, our relationship with leisure – and with ourselves – evolves and changes.”
Understanding this evolution is the first step in planning for happiness and fulfillment in this most “time affluent” phase of our lives.
For more information on our firm or to request a complementary consultation please email [email protected] or call (561) 210-7887 today.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Loss of principal may occur.
No strategy assures a profit or protects against a loss. Investing involves risks, including possible loss of principal