By Ronnie Thompson
The Key To Winning Any “Race” Is Knowing The Finish Line
There are very few things in life I dislike more than running. As a high school and college wrestler running was an intricate part of our training. I remember in high school attending a summer wrestling camp. One of the running activities during the camp was that we partnered up with another person and ran 8 miles straight out. On the run back, we were given one rule; you and your partner were to rotate being on each other’s back the entire 8 mile run back.
You can see why I learned to dislike running.
Running in a race and planning for retirement have many similarities; discipline, pace, commitment and training. The MOST important similarity in my mind, to be successful at both, is that you MUST know the finish line. When you are running, and you get a cramp if you do not know exactly how much longer you are expected to run or how far the finish line is away it is almost certain that you will give up immediately. However, if you know exactly how far the finish line is and you get a cramp it becomes much easier to plan an approach mentally and physically to getting to that finish line.
In the Race for Retirement we all experience “cramps” along the way, education debt, job loss, job changes, health issues and expenses, cost of living, weddings, divorces, market losses and inflation to name a few. As we experience these “cramps” many have no clue when it comes to the finish line of their retirement race, so they give up.
In 2016 the Employee Benefit Research Institute (EBRI) did a “retirement confidence survey.” In that survey working individuals were asked how “confident” they were that they would retire “comfortably?” 21% of those surveyed believed they could retire comfortably, leaving 79% that had given up running their race to retirement!
So how do you become confident in reaching the finish line of the race? Here are a few factors that will help you cross the finish line of the Race for Retirement:
1. Know the Finish Line
It is important to know what retirement looks like for you. What age do you want to retire? How much income do you believe you will need a month to support your lifestyle? What do you want retirement to look like (travel, move to a warmer climate etc.)? When I am working with people on this exercise I tell them to forget about what they believe they MUST do, instead focus on what they WANT to do. Even if you don’t believe you can retire early, if you WANT to retire early then let’s look at that option and see if we can come up with a plan to make it happen.
2. Training
You would never show up to run a marathon if you never trained before for that kind of race. Retirement is no different, yet so many people are showing up to the starting line of the “Retirement Marathon” and have never even ran before. You must educate yourself on strategies that will fit and help you efficiently achieve your individual goals. Company retirement benefits, tax efficiencies, risk tolerance, proper investment approach and asset protection are a few key factors you must understand to be successful.
3. Game plan
Once you know what the “destination” looks like it is AMAZING how easy the journey becomes. Once you have identified the Finish Line of retirement, annual revisits to the plan or game planning provides an ability to compare how your plan is currently working in getting you to the finish line. If for whatever reason the plan is falling short, it is easy to identify areas you can control to improve the plan and get things back on track.
Most people doing some form of a savings plan for retirement have little idea or expectation for what those plans will actually do for them when they retire. This is the very reason why a great majority of people believe the idea of retirement is not a reality. I hate running, so I could not imagine running in a race I didn’t believe I would ever finish, yet when it comes to retirement 80% of people are doing just that. No matter where you are at in the Race for Retirement know the finish line, start to train and find someone who can help you game plan. At True North Advisors we help our clients prepare to be successful in their race and are waiting for them, cheering, as they cross the finish line into their retirement.
Ronnie Thompson and Steve Wilbourn are investment advisory representatives of and provides advisory services through CoreCap Advisors, LLC. True North Advisors and CoreCap Advisors are separate and unaffiliated entities. Securities trades are not accepted through email, voicemail or fax. Please contact your representative at the number listed above to place any securities trades. This e-mail message and any attachments are solely for the confidential use of the intended recipient. If you are not the intended recipient, notify us immediately by return e-mail and promptly delete this message and any attachments from your computer. These independent views and opinions expressed are those of Ronnie Thompson and Steve Wilbourn and are not necessarily the opinions of CoreCap Advisors. Investing involves risk and investors may incur a profit or a loss. Any information should not be deemed a recommendation to buy, hold or sell any security. You should consult with a licensed professional for advice concerning your specific situation. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ. The NASDAQ Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market.
