Skip to main content

Sound Advice: January 11, 2023

The Bigger Retirement Question

Although financial planning is best begun as early as possible, the reality is that most folks don’t begin giving serious thought to what lies ahead until they are in their 50s . . . or even 60s, a time when it’s getting perilously close to being too late.  I recall a couple who pulled up in two brand new Mercedes sedans when they arrived for a talk about their retirement years.  Those who would be impressed by this display might have speculated that this couple’s finances were in good shape. 

The reality was otherwise.  When we began their review, we noted that their assets were barely more than $200,000.  That was before getting to their debts and how their prospective income stacked up against their expected expenses.  Sad to say, it only got worse from there. 

Even so, the question about whether you will have enough pales in comparison with an even more important concern: What will you be doing when you are no longer working?  A surprising number of people have no idea.  Quite a few can’t wait to end a job that they find unsatisfying.  Others have spent their lives daydreaming about the days of pleasure that lie beyond the working years.  For many though, the thinking has gone no further.  And then there are people who talk about volunteering and taking courses.

It should come as no surprise that some have retired . . . and then gone back to work.

Yes, concerns about having sufficient resources to maintain one’s preferred lifestyle are important, but having abundant time to enjoy life with no interests and no plan to be involved in activities that are truly satisfying can be a formula for steady deterioration.  Whether the future will be focused on hobbies, new businesses, travel or spending more time with close friends and family, what could be years of leisure and fulfillment may end up as little more than marking time toward one’s end.

Early planning of one’s financial future will increase the likelihood of a comfortable retirement.  That will include a proper assessment of personal assets, debts, income, and expenses.  In addition, one needs to be prepared for such nonrecurring events as downsizing, health issues, and inheritances, among others.  Without this preparation, too much time will be spent on the financial side of the equation, seriously jeopardizing a time of life when there should be a variety of available options for enjoyment.

Far better to understand the benefits of getting started as soon as possible.  By getting a head start, the odds of a happier future will increase substantially.

 N. Russell Wayne, CFPÒ

www.soundasset.com

Any questions?  Please contact me at nrwayne@soundasset.com

Comments

Post a Comment

Popular posts from this blog

Sound Advice: September 21, 2022

The Professional Approach To Stock Selection There are various approaches to stock selection, but the two that predominate are fundamental analysis and technical analysis.  Fundamental analysis is a numbers-based method that evaluates key factors such as income and financial health, including the past, present, and future.  Technical analysis emphasizes movements and formations of stock prices. Fundamental analysis is based on factors that over time have proved to have a meaningful impact on stock price movements.  The optimal picture of corporate profitability is steady growth, both in the past and, prospectively, in the coming years.  Steady growth is rewarded by higher valuations of underlying earning power than those accorded companies with erratic progress. When professionals screen (filter) the data of the broad universe of stocks, they look for companies that move ahead every year, regardless of the prevailing economic conditions.  Although high pas...
Post a Comment
Read more

Sound Advice: July 26, 2023

Is Day Trading a Good Idea? Day trading can be both exciting and potentially profitable, but it also comes with significant risks and challenges. Whether it's a good idea depends on several factors, including your financial situation, risk tolerance, time commitment, and knowledge of the markets. Here are some considerations to keep in mind: Risk and volatility: Day trading involves buying and selling securities within a short time frame, often within the same day. This exposes you to the inherent volatility and risks of the market. Prices can fluctuate rapidly, and unexpected events can have a significant impact on stock prices, making it challenging to consistently make profits. Time commitment: Day trading requires a substantial time commitment. It involves closely monitoring market movements, conducting research, and executing trades. It can be stressful and demanding, as you need to be actively engaged in the market during t...
Post a Comment
Read more

Sound Advice: May 31, 2023

High Yields, Yes!  But There Are Risks Now that failure to get much done in Washington seems to be the bottom line for lots of talk, but little action, it’s hard not to wonder whether we’re missing something.  Yes, the Federal Reserve Board has aggressively raised interest rates in the hope of putting a damper on excessively high inflation, but one would think that there might be some good news as a result of these efforts. The hoped-for result is that inflation is indeed moderating.  Also of importance, though, is the sharp improvement in interest rates on fixed-income investments, usually a.k.a. bonds.  For much of the past decade or more, interest rates have languished at or near historical lows, which created considerable shortfalls for folks living on fixed incomes. Thanks to the Fed’s hikes, the returns on bonds and the like are beginning to be of interest.  But . . . and that’s a big but . . . there are risks involved. For short-term investing at ...
Post a Comment
Read more