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Running the Race of Retirement Planning

Posted by Johnson Financial Strategies

One of the biggest challenges I have taken on in my life is becoming a marathon runner. There are many small decisions that a person makes along the way when beginning the process of being a marathon runner that are all crucial and determine one’s success. In my career as a financial planner, I have come to find many similarities between marathon running and financial planning. Here are four tips to being successful when running the race of retirement planning.

1.) Plan properly

There are many times when life just feels out of balance. There are days when I just don’t feel like running. There are days I work too late and don’t run at all. Sometimes I feel like giving up. The same is with financial planning. There are times sticking to your plan seems too hard. Sometimes you want to just buy a new car instead of dealing with your current one but to win the race, you must stick with the plan.

With an alarming number of half of Americans having absolutely no retirement savings at all, many families are not adequately preparing to run the race of retirement planning. Say I have a client that has humble beginnings in his career and only manages to save $3,000 per year for the first ten years of his career. Even that insufficient $30,000 in retirement can potentially grow to over $300,000 easily with a 7% annual returnafter completing a 30-40 year career. That is just a small number to use as an example and is typically less than recommended by experts to be prepared for the last years of your life.

2.) Pace yourself.

You cannot go from running one mile to running twenty-six overnight. There are many slow steps and cross training exercises one does when working up to a marathon. When a race seems overwhelming, one tip runners use is considering how far they have come since the start of the race. When I am coming up on mile thirteen of a marathon, rather than thinking I have thirteen more miles to go, I instead think that all I must do is complete what I have already proven to myself I can do.

What do you do when the race becomes longer than expected though? I am not talking about a marathon, but about life. Many Americans are living longer than they ever imagined. The average life expectancy in the United States is now 79 years and there are over 55,000 Americans over 100 years of age according to recent US Census reports. Are you prepared for maintaining the life you desire without working for thirty years or more? Although we can never know exactly how long we will live into retirement, there are ways to have an idea in mind. There are many comprehensive life expectancy calculators available on the internet that will consider your health, lifestyle, and family history to help you plan through the years without the income you once knew. You must know your pace. It may be your pace by choice or by necessity, but keep your eye on your goal and do not lose sight of your future. You can retire and live the lifestyle you want if you pace yourself. Be careful not to be too aggressive in your retirement planning though, or you will experience burnout and possibly give up.

3.) Chose the right run.

When choosing a marathon, you need to consider many factors. If you live in a city below sea level, you probably do not want to start with a marathon in Denver, the Mile-High City. If you suffer horribly from spring allergies you probably do not want to run a marathon in Nashville, a city known for spring allergens, during springtime.

There is no single retirement plan that is best for everyone either. Just like finding the right run, there are an overwhelming amount of options out there. There are many advantages and disadvantages to all types of retirement accounts. Your retirement plan should reflect your individual goals and needs, and you must look at all your options and weigh all advantages and disadvantages of each plan. To make the process of choosing a run or a retirement account easier, take the trusted advice of experienced individuals. There are many ways for runners to network through local groups or online running groups. When planning your retirement race, work with a financial advisor you can trust that will make sure you know all your options to make the right choices for you.

4.) Seek support.

Other runners are not the only people who are part of my support network. As a business owner and father, there are many times I lean on the support of my wife and family to help me find the time to run. Without their support, finding the time I need would be nearly impossible.

Your financial advisor should lean on the support of other professionals as well to make the most of your financial planning. It is important to ask your financial advisor who else they work with and why. For example, I often work with CPAs and attorneys to establish trusts for clients and learn valuable tax information.

Retirement planning, just like running, is not always easy. Author H. Jackson Brown Jr. once said, “The best preparation for tomorrow is doing your best today.” This is definitely true. Through planning, pacing, making right choices, and seeking support, you can accomplish all of your goals whether personal or financial.



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