Getting to your Retirement Exit was created out of a passion to share information on how to properly prepare everyday people for their retirement. It was created because one of the most important decisions that would last over the next 20+ years would often be made in less than 24 hours without direction or coaching. Visit our website at www.myretirementexit.com for more information.
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Mistakes Were Almost Made
RETIREMENT MISTAKES WERE
ALMOST MADE (2 min read)
sitting down with Alma like it was yesterday. We went through all of her
401k statements and the additional money she had saved for retirement. I
went back to my office and begun to input the numbers into my retirement
planning software. The numbers were not favorable, because Alma did not want
her lifestyle to change at all. I picked up the phone and dialed her cell
number and I asked her the following question. “Are you sure you are not
willing to change anything concerning your lifestyle going into retirement?”
She said “I would like to keep everything as is, with no changes” I told
her that would be difficult to do unless we changed some of her plans heading
into retirement. Ideally, no one would like to change their lifestyle going
into retirement, but unless you make the same amount of monthly income and have
all of your medical and dental take care of, then this would be difficult I
told Alma. Not impossible, but it would be difficult unless you planned
early in the process. We recommend our clients start their retirement plans at
least 10 years out, but no less than 5 years for emergency purposes.
problem (which happens more often than not) She mentioned her
real urgency problem was they just moved a new boss over her and she had to
retire in the next three months with no exceptions, because her and the new
manager did not get along very well.
Possible Solution 1
I asked Alma how
much leave/vacation time did she have accumulated and she stated that she had a
substantial amount of time saved up. She said she looked forward to
cashing it out when she retired. I told her, well she would still have to pay
“Uncle Sam” for a large amount of those days, but I may have an idea. She
said she could also save more money in her savings for the next 3 months to
have some additional savings as well. My possible idea would have Alma take the
money she was going to save in her savings and spend it on a good vacation
every 3 or 6 months to extend her retirement date out. I created a win-when moment for her. This is when it seems like you are losing, but you are really winning. I started a podcast entitled the Win-When Vault, where I share some basic money ideas debt management tips, and more, which I have learned over the years. This option gives her the
opportunity to decompress from work, thus adding another year or two for her
pension. Adding an additional year would increase her monthly pay-out, thus
presenting her with yet another opportunity to meet her monthly obligations. If
she put a vacation plan together this would be one way of extending her working
years and seeing the world on the company’s dime. Most people want to try
and see the world once they retire, but they have no additional income coming
in, so this makes it more difficult to accomplish.
Possible Solution 2
Since she was already
vested (meaning she had met the minimum requirements to even be able to
receive a retirement from the plan) She could find another job and start
working on another retirement plan. Ultimately, the goal going into
retirement would be to have as many income checks coming in every month as
possible. If vested at one employer, then start another plan somewhere else.
Most vesting (or waiting periods) range from 1-5 years before you are
fully vested in the company retirement plan. If this is determined initially
before you decide to make a move then you could essentially create two income
streams in less than 5 years.
We created myretirementexit.com
as a destination to find retirement coaching for reasons, just like Alma’s.
Most people, like Alma make a 25 year retirement decision based on the
agenda of others in the matter of days. If you think retirement is not a
serious decision, then look at all the paperwork you have to fill out once you
make that declaration. The above mentioned solutions are two out of about
5 possible solutions Alma could make, but without a retirement coach mistakes
were almost made.
I have been getting a lot of requests to put up a blog post to prepare everyday retirees for an upcoming market correction. First of all let’s describe or identify a market correction. A market correction is essentially an overall market drop of about 10%. A market correction is not to be confused with a bear market, which is about a 20% drop in the markets. First, let’s discuss when the last official market correction was on the books. The last correction was the summer of 2015, and it started with China’s market in June. China had a stock market crash that continued into July and August, then around the middle or August the Dow Jones Index (a collection of key stocks that measure the market as a whole) The Dow Jones Stock Index basically measure the pillars or historical fortune 500 giants of the United States fell about 10%. The Dow Jones fell 588 points during a two-day period, 1,300 points from August 18–21. Then on Monday, August 24, the world stock markets were down sub…
I remember sitting in a classroom about 17 years ago, and the instructor passed around a magazine for us to look at. On the cover was a person by the name of Ted Benna, and if you research or look him up you will see that he is called “The God Father of the 401k” or something of that nature. I wanted to add some context to the readers who are yet to listen to Part I of the Reason Why I Hate Your 401K, which is available as a podcast here, and I recommend as an introduction to this Part II blog. In celebration of our 10th podcast for “The Retirement Exit”, I decided that this subject was too complex to share on my podcast so this blog is Part II. Part I (podcast) will share two other important reasons, but Part II (blog) is the biggest reason why I hate your 401k.
I share in that podcast why I hate your 401k, and why I no longer hate my retirement plan. This blog will take into account that my listeners have heard the podcast and pull…
Why My Retirement Social Media Status-Is
Complicated I remember when someone told me I should start a
blog; my answer was I really do not have time. I told them that there
were enough bloggers out there, and I think most of them do a good job.Their response to me was you are
different. When it comes to explaining stuff, you precisely say definitely what the problem is, and everyone exactly gets it. I said thank you, and still never gave starting a blog another thought.
As I sat down with more clients, I started to realize that there
is too much information available.Nevertheless, the more information available the more overwhelming for
the average retiree becomes. I think retirement and retirement planning can
be very tough to understand as it is, but add something like the open letter
that was written to our current Vice President, Mr. Mike Pence, from the board
of trustees of the social security administration and now you are at another
level of complexity. The letter from the …