MONEY matters

As the global economy continues to implode and the stock market reaches new lows, lots of baby boomers are wondering about their retirement plans. If you watch the talking heads on Sunday morning TV shows, which I admit I do regularly, you’ve seen a zillion commercials on preparing for retirement.  Most commercials show the happy couple sailing off into the sunset, not a care in the world because they followed this plan or that plan. It seems like well meaning retirement advice they’re dispensing. But BEWARE, there are a lot of illusions, delusions and downright lies about retirement that can be dangerous to your retirement well-being.

As long as you have enough money saved up, your retirement will take care of itself. This is the biggest and most dangerous lie about retirement. Of course you need enough money saved up to have a secure retirement, but this is only one aspect of many that need to be considered for a thriving not just surviving retirement. Focusing only on the tangible financial aspects of retirement and ignoring the other, less tangible, “must haves” is a prescription for disaster.

With the stock market sinking daily, it’s hard for many investors to stomach the thought of putting money back into the market. That’s totally understandable. As a short-term strategy, many people are keeping their cash in money market accounts or short term savings accounts. If that helps you sleep at night, then that’s what you need to do. But eventually, things will stabilize, markets will go back up, and you’ll need to start planning for your prime years. With average life expectancy at 90, earning less than 2% on your investments over the long term is a riskier strategy than you might imagine.

Most people, even with the best of intentions, usually spend pretty close to what they were spending prior to retirement. Many of my clients that have officially stopped working for money actually are surprised to discover that they are spending more than when they were working full-time. This is why planning for the prime years of your life, formerly known as the golden years, (prime just sounds better), is so essential to future financial security.