After the Election

Following the Presidential election, the ratio of people who are happy and unhappy about the results is fairly close to even. Such is our political process. But after a tough and sometimes nasty campaign, we all voted and must accept the outcome.

With the House remaining Republican and the Senate and Presidency Democratic, neither party will be able to dictate what will happen in the next four years. Some call it gridlock, but there are great examples in history of our government working well with this type of divided government. In fact two of the most successful Presidents had this structure, Ronald Reagan and Bill Clinton.  Both of these men had the leadership skills to bring people together to accomplish great things. Let’s hope America can somehow be united.

And yet, the challenges ahead are still great. The election did not solve one single problem. We still need to increase the number of people working and control our spending. How this happens will be up to our elected officials, but this is what I want to apply to financial planning and specifically retirement planning.

Simply put, most people do not do a good job planning for their retirement. It just sort of happens or they do what others do and sometimes it works out and other times it does not. Why do I say this? Well according to a Harvard University study the average worker spends 83,000 hours working in their life and only spends 10 hours preparing for retirement. Even though the life span of most people has significantly increased, only 2 percent of people opt to take the most money out of their Social Security. It is time to stop ignoring our problems and, like our government, we need to reach out to professionals that have a better understanding of the problem and the experience to solve it.

Study after study says that financial peace is the number one objective of most retirees. This is contrary to what most people spend their time on. We focus on the value of our retirement plans or stock portfolios and wonder why we are so nervous about the future.  I believe if we would focus on what we can control instead of what is impossible to control we would feel much better about retirement. I know this sound like a politicians promise for a solution for everything and it is not. Instead I am suggesting that you spend some time and money to be educated before you retire to make wise decisions that may lead to greater understanding and hopefully the financial peace that most want.

It starts with understanding Social Security, which accounts for 38 percent of most retiree’s income. Based on the data provided by Social Security Administration, 45 percent choose the minimum benefit to begin at age 62 and only 2 percent choose to wait until the maximum benefit at age 70. Consistently they look to products that promise return without risk. Instead, people should work with their advisor to create a simple income stream that matches risk tolerance.

I have stepped away from selling any products to commit my company to education. It was the right decision for me so that I can truly provide unbiased education. I see too many people making decisions without the facts and my goal is to change this. I am not here to be an adversary to advisors, but rather an advocate for people that need more information to make the necessary decisions for their retirement.

After all, according to Daniel J Boorstin: “Education is learning what you didn’t even know you didn’t know.” If you have questions or would like to take one of our classes give me a call or send me an e-mail.

-Steve


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