By failing to prepare, you are preparing to fail. —Benjamin Franklin
Okay, I didn’t interview any of these people, either for my podcast or this book, but they all knew something I’ve been saying on repeat for years: live life with intention. Most people cringe when told the importance of planning, but just like planning a vacation, if you don’t plan for your retirement, it’s going to arrive and you’re not going to have a clue. You plan for your vacations because you know that otherwise you may not be able to travel at the best time or to the most desired location. You may not be able to get airline reservations or get into a great hotel. If you leave it all to chance, the odds are stacked against you and your dream vacation might never get off the ground. Here’s the scary truth: People spend more time planning their next vacation than they do planning their retirement.
Retirement doesn’t have to be scary. In fact, planning for it can be exciting and fun. Learning about all your options, finding special places to go, and creating enjoyable experiences—there’s a lot to look forward to.
Many of you may feel like you’re behind in your retirement savings or don’t have a clear course of action. You’re worried it’s too late to start saving and planning. After all, you didn’t see your parents model a fun and relaxing retirement. I have some good news for you! It’s called the “Sweet Spot Solution.” It’s that wonderful window when your children are no longer financially dependent, when they’ve finished school and are on their own, you’re closing in on paying off your house, and you have discretionary savings available. For some of you, that may be five to fifteen years when you can “catch up.” The key is to capture it and make up for lost time. Finally, after spending so much on your children, the time has come for you to make up for lost ground and build for your own future. Now it is time to think about how you wish to live when you retire, address your finances, and begin to fulfill your dreams.
In a nutshell, the Sweet Spot Solution follows the same approach you would take to plan a dream vacation. First, decide where you want to go, then when, then how you wish to travel, and how long you plan to stay. Locate your options, determine how much each will cost, and make your decisions. Then figure out how to finance it.
After a lifetime of working, most baby boomers don’t want their parents’ version of retirement. They don’t want to slip away quietly, hibernate, or follow traditional routes. They want to pursue their passions, explore, experience, and blaze new trails. They insist on controlling their own destinies and setting their own standards, as they always have. You may not want to completely give up your job, what you’ve mastered over a lifetime, been praised for, and come to love. You may want to continue working, perhaps part-time, or even start a new career you’ve been dreaming about. Or maybe you want to travel, play golf, fish, volunteer, or just relax. And, after a few years, you may even itch for something different.
Regardless of the choices you make, don’t kid yourself—they all revolve around money. When I met with clients for the first time, very few had thought much about their retirement, and fewer still had made any specific plans. Instead, they had been grinding it out, living for today, and postponing the inevitable. When we talked about creating investment plans, they didn’t want to change their lifestyle now or later, so they cringed—and resisted.
The Sweet Spot Solution gives you the opportunity to:
- Retire now with a lower standard of living (this is for the person who desperately wants out of their job).
- Phase in your retirement so you work longer and begin to ease into retirement while doing work you enjoy.
- Delay full retirement—work full-time longer so that when you do retire, you won’t have to work at all.
Planning for retirement is essential, so don’t be afraid of it. The Sweet Spot Solution starts with six steps. It teaches those who haven’t saved or haven’t saved enough how to plan for retirement, build retirement funds, and address the emotional impact of the changes they’ll face. It shows those who have saved how to save more and surpass their dreams. And it will arm you with time-tested answers to problems that could throw you off course, show you how to anticipate these issues, and give you concrete ways to proactively create a worry-free retirement.
- Step one: Take a financial X-ray.
Identify where you presently stand financially. What is your net worth, your income, expenses, and current monthly savings? This is your starting point. It’s a reality check, so be brutally honest and don’t fudge the numbers. You’ll have to overcome financial fear with financial courage. Usually, your situation isn’t as formidable as you had feared. Examine each of your worries and decide how they should be approached. - Step two: Review your money in motion.
Trace the movement of your money. You may be surprised at how much you’re throwing away. How much are you spending and on what? Find out how much you’re saving, how much you’re investing, and what you’re getting in return. - Step three: Assess your asset protection plan.
How well are you protected? What type of life, disability, long-term care, umbrella liability, auto insurance, and home insurance do you have? Is each the proper amount? Are you paying too much? - Step four: Envision your retirement.
At what age would you like to be financially independent, having enough money to retire? How much would you like to live on? Where do you want to live, and how would you prefer to spend your time? Think about the answers that make sense for you. Choose the lifestyle you want, how you would like to live in retirement. Do you want to sit on the back porch and watch the grass grow, or would you rather keep working at least part-time, volunteer, or travel? Identify your personal goals and dreams. - Step five: Determine your spendable monthly income goal.
If you were to retire today, how much money would you need to live on? How much would you like to spend each month on the things you want? How committed are you to paying off your debt? Be realistic. - Step six: The Sweet Spot commitment.
How much are you willing to save each month or each year in order to catch up and make your financial dreams a reality? What are you willing to give up or change in your life so that you have more, save more, and give more?
The Sweet Spot Solution is based on the fact that we all have unique circumstances, goals, and objectives. It enables you to create an individualized plan with realistic steps, time frames, and outcomes, instead of trying to fit into stock formulas that may not be right for you. To ensure you make the best decisions possible, make certain you make all your decisions jointly with your spouse or significant other and your financial advisor. Discuss how you can economize without drastically changing your life—how to be more efficient, to free up money, to save and invest. Then work on changing your outlook by changing your attitude. Retirement planning can actually be a positive, enjoyable experience—even exciting, rewarding, and fun.
If you’re dreading your retirement rather than looking forward to it, it’s time to think differently. As I worked with my clients, their enthusiasm grew. Their dread often turned into excitement. Before long, they became more positive and more involved. They got fully on board. When they felt that a plan had been personalized for them, they worked harder to reach their goals.
Don’t be afraid to fail and try new things. When I met with Tony and Latosha, they were convinced they wanted to sell their house, buy an RV, and tour this great country. I asked them, “Have you ever driven an RV?” They said no. I suggested that before they bought one, they rent one for a weekend. “Kick the tires a bit—a low-cost probe to test if you’re prepared for all that comes with RV ownership.” They took my advice, and while they enjoyed their weekend, they decided they didn’t want to own an RV after all. Their decision saved them tens of thousands of dollars. The lesson is this: try it and test it. You can always readjust your course.
Working with my clients taught me that people will work for what they want, but when they don’t know what they want, it’s impossible to do the work. My approach showed them the way and taught them how to get what they wanted.
Here’s the real secret sauce: boldness, courage, and monitoring your progress. These three pull the six steps together. Two or three times per year, evaluate your progress. Life happens. Sometimes it can knock you off course.
In 1877, the USS Huron set sail from New York. At the time, it was called the Navy’s best ship. It was state of the art and deemed a perfect vessel. The ship drifted off course in heavy seas and a bad storm caused a shipwreck. A small compass error was largely to blame. It led them to drift off course and subsequently hit a reef off the coast of the Carolinas.
The last thing I want for you is to feel like you’re a passenger on the USS Huron. You have the chance to create the retirement of your dreams, even if today is the first time you’ve started thinking about it. One small shift in your life can change your course forever.
The choices you make today have a tremendous impact on your financial future. You have the power to make the difference you want, when and where you want to make it. Use the Sweet Spot Solution to help you get there.
(To be continued...)
This excerpt is taken from “Good Money Revolution: How to Make More Money to Do More Good” by Derrick Kinney. To read other articles of this book, click here. To buy this book, click here.
The Epoch Times copyright © 2023. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
