Retirement Future Tense
In our Western culture, we take many things for granted. We take comfort in the fact that the laws of gravity will not be surreptitiously repealed while we sleep, catapulting us and all we have into the ever-expanding universe as dawn arrives. The sun will rise and set each day. When it comes to retirement planning, we mentally quote Scarlett O’Hara from Gone with the Wind: “I can’t think about that right now. If I do I’ll go crazy. I’ll think about that tomorrow.” In essence, we expect a fair amount of certainty. This shared deception about retirement planning is what keeps our existential crises at bay as well as present retirement planners with their greatest challenge: How to create in clients a realistic sense of urgency without inviting panic. To address this conundrum you might want to revisit some ideas and retool your approaches.
Smarter or wiser. An old saying states that smart people learn by their mistakes. That should bring us some comfort, since we all like to fancy ourselves as smart people! But another saying shares a different pearl of wisdom: wise people learn by the mistakes of others. No wonder we have heard that “experience is a dear teacher and only a fool will learn by it.” As part of the retirement planning process, planners can assist their clients by pointing out the errors of the past so as to guide future directions and decisions so clients will not have to repeat mistakes of the past. What are these mistakes and can we avoid them?
• Living without a spending plan
• Using credit to expand standard of living far beyond income
• Believing that good times will roll on forever
Most of you would benefit from a review of the basics on how to avoid these pitfalls:
• Save- save for the rainy day, save for the big-ticket purchase, save just to have some extra cash on hand.
• If it doesn’t make sense, then it probably doesn’t make sense.
• Learn more about how money works. Ignorance is not bliss!
• Strive for modest, steady returns on investments.
None of these require advanced education to understand, nor do they imply a high level of sophistication; rather, because they are so self-evident, they may have grown dim in our memories and relegated to a time long past and regarded as ideas that were part of the horse-and-buggy era- certainly not part of the great complex financial system we see today. It just may be that in our sophisticated world, there are more people who can claim the label “smarter” than those who would call themselves “wiser.”