Several years ago, I decided (rather I was actually coerced) into training for a marathon. I was what you would consider an amateur runner at best. I’d never had any formal training or run any races at all. You’d think I might have started with a 5k or something to build up to a marathon, however that’s not what happened. I signed up, paid my money, got my t-shirt, and began to train.
Fast forward the clock 8 months and many miles later. I’m in the race moving along as well as I expected and up ahead I see the “mile 15” marker. All of the sudden it seems as if every ounce of energy and motivation left my body. I didn’t know what to do. I wanted to walk. This is a term which runners refer to as “The Wall”.
Many people who are approaching the end of their working years begin to hit the wall. No motivation. No vision. Even if you love your job, it is all too common to reach this point in your life and “coast”. You are likely in the highest earning years of your life and it’s easy to become lax on your financial discipline. If you are within 5 years of retiring, you have the opportunity to finish strong and we want to help you.
1) Picture the Finish Line
With any goal you set for yourself, whether it be retirement or something else entirely, you have to spend some time dreaming. Dreams create the drive. Your ability to prepare for retirement is in direct proportion to how big your dreams are. Sit down with your spouse and spend some time picturing the finish line. What do you want retirement to look like? What will you do? How much income do you want? These are important questions to ask yourself when preparing for the best years of your life. Sometimes I think retirement has a stigma of being the time when you are too old and tired to do anything. However, I want to repaint this picture to portray the years when you should have the most freedom you’ve ever had. Maybe that means playing golf every day or maybe that means starting a business you’ve always been afraid to start. Whatever your dream is, define it and write it down.
2) Find a Partner
In the midst of my problem at mile 15, I began to walk. Slowly at first, but it wasn’t long before I was able to jog a bit. Suddenly, I heard a voice to the right of me say “Don’t look down!” A seasoned runner came alongside me and coached me through the wall. We ran together for the next couple of miles. With every step I took, I kept thinking “Don’t look down, eyes on the prize. Don’t look down, eyes on the prize.” What I noticed is when you look down while you’re running, all you see is the ground. When you look ahead, you see progress. Progress creates momentum. Momentum gets you to the finish line. When it comes to your retirement dream, you need a coach. You need a partner. Someone who will run alongside you to help you make it to the finish line. Our ultimate goal as a team of financial advisors is to be the partner who will help you achieve your dreams for retirement
4) Remember Your Training
While running takes much discipline and effort, building your retirement dream has a cost as well. If you are within 5 years of approaching retirement, here are 4 practical training tips to help you cross the finish line.
- Budget, Don’t Fudge It
Create a written plan for your monthly cash flow and stick to it. Begin to live on what you expect your retirement income to be, if it will be less than your income now.
- Make Debt a Threat
If you have debt in your financial picture due to lack of planning or discipline on your part, think of it as an obstacle that stands in the way of your dream. Do anything you can to overcome that obstacle whether that means selling the car, downsizing the house, or having a massive garage sale to pay down debt. If you still have a mortgage, sit down with a financial advisor and have them help you decide how you can best allocate your dollars, whether it be paying extra on your home, or putting more into your retirement accounts.
- Save More, Savor More
I can almost guarantee you that you need to be saving more. Nearly every client I meet with who is wanting to plan for retirement has a gap between how much they are currently saving and how much income they want in retirement. Think of every dollar you save as one step closer to the retirement finish line.
- Don’t Rob the Bank
Many people think of their 401(k) or their IRA as this retirement piggy bank in which they receive their IRS approved hammer at age 59 and a half to bust it open. If there are major expenses such as renovating your home, buying new vehicles, or moving, these are all decisions that are best made on this side of the retirement finish line. When you take money from your 401(k) or IRA to make major purchases, not only can it create a potential tax burden for you, it can rob you of your income later on in retirement.
5) Finish Strong
I’d love to say I finished my marathon perfectly and ran every step of the way from mile 15 through the finish line, however that is not what happened. While my story wasn’t perfect, and neither will yours be, I did finish strong. I crossed that finish line with motivation and passion. It was the greatest feeling of achievement I’ve ever experienced. As a team member of GenWealth, I know I can speak for everyone else that we’d love to be your partner to help you finish strong and to cross your retirement finish line. You have the best years ahead of you. Don’t look down, Keep your eyes on the prize.