Everyone Retires
Some people say they will never retire, and they mean it honestly—but the truth is that almost all of us do. The harder the physical labor or the job stress, the more difficult work becomes as you age. Even those who know this still find that time creeps up on us, catching us off guard and slowing us down. If you say you will not retire, be sure it is not an excuse for not saving now. One soon-to-be retiree told me, “We had a great time; spent a lot of money traveling. Now I can barely afford to retire.”
Most financial planning advice is given to people who are staring into a rearview mirror. Thinking that good past performance of the stock market will continue, they underestimate how much must be saved. Any good truck driver will tell you it takes a long time to learn how to properly use rearview mirrors when going forward. One client called me because, he said, “for the last forty years I have had all my money in the bank and now I want to retire in five years. Shouldn’t I put everything into the stock market?” He finally had looked at the road and wanted to rush into the fastest lane instead of shifting down immediately.
Jeff Brown, syndicated columnist, wrote that a new survey done by Mathew Greenwald & Associates (for John Hancock) came to unfortunate conclusions regarding the average 401(k) investor. Of the eight hundred participants, “40 percent of those surveyed had no idea what returns to expect from stocks, bonds and other investments, and the remaining 60 percent, on average . . . over the next twenty years, expected stocks to return 19.3 percent a year, nearly double the 11 percent historical return.” My six-year-old daughter woke up one morning too tired to dress her self. She said to her mother, “Ma, you let me stay up too late.” Much like her, many people will wake up someday and point the finger at somebody else for their own poor choices. It is my hope that you are not among them.
