Bottom Line
Hope for the best, plan for the worst

By Steve Freidell, Land Line contributor

When it comes to your retirement – like anything in life – planning is everything. You probably plan your routes across town, across state, and most certainly across country. In fact, as a trucker, you usually don’t go anywhere without planning your every move. Your profession depends on knowing where you’re going and how to get there.

However, ask just about anyone their financial plans for reaching and enjoying retirement, and many really don’t have a clue. And that’s not all that surprising; most people put little emphasis on retirement planning and don’t want to face that reality until retirement arrives.

Let’s face the truth, if you wait until retirement to plan for your later years, you will never make it. You might as well plan on working until you are no longer able to work, either because of health reasons or worse. This is kind of like hauling a load to Los Angeles and waiting until you’re stuck in horrendous traffic before figuring out where you need to go. You need to have a roadmap ready before you hit life’s inevitable financial traffic jams.

So where do you get started? My best advice is to find a financial planner in your area and ask for a free review. These people are licensed and trained to examine all your assets and liabilities and will provide a brief summary of your considerations.

Financial planners are fee-based advisers who charge for their services, so expect to pay a fee to receive the rest of their recommendations. Every person and every situation is different and no set of rules can work for everyone.   Employing a trained adviser will provide you the best chance of succeeding, so if you’re feeling that retirement is fast approaching and you’re unprepared, it may be worth the cost to bring in a professional.

If you can’t afford an adviser, you could also consider using one of many free retirement calculators online. These will give a quick overview of your assets and provide you with a report card of your progress so you can realistically plan for your goals.

But what happens when you simply don’t have enough money saved away? The first step is to make sure your budget is in shape. If not, you’ll need to get your spending under control in order to start setting more money aside. If you have a 401(k) or other plan, either through your employer or your spouse’s employer, make sure you are contributing the maximum amount possible.

Don’t worry that it exceeds the amount of match from your employer. It’s too late to think like that. If you have an IRA, make sure you are contributing the maximum amount possible as well.

Examine all your assets in the home. Do you need that big house now that your kids have all grown up? Why not consider selling it and investing that asset into something that may gain in value over the next few years.

The same can be said for assets like collectibles, extra cars, recreational vehicles, etc. If you’re not prepared for retirement, these things will have to be liquidated eventually, so you might as well do it now and invest the money so that it has time to grow.

Another possibility is extra income through additional jobs or asking your spouse to go to work if he/she has been the homemaker for many years. After all, men live on average to 75 and women live to 80. That time between your life expectancy and hers requires planning as well.

Let your family know where you stand. They may be able to help just by knowing that your situation will not allow for spending on them in the future. Some people will have to depend on their children for assistance, like it or not. It’s better to share this fact now than to suddenly spring this fact on them in the future. No one wants to be dependent on their children at retirement, but many of us will.

We have all worked hard to provide for our children and enjoy seeing them work toward their personal success. Ask them to review their retirement plans as well.

It’s so much easier to repair bad retirement planning when you have 20 or 30 years before retirement than when you have fewer than 10.

One certainty that is going to affect all of us over the next 20 years is the inevitable increase of the “retirement age.” This will likely increase from the current 62-65 years of age to 67 or maybe even as high as 70. This calculation will affect the amount of retirement income you may collect from Social Security and any pensions you may still have. And even if your retirement income looks sufficient right now, don’t forget that we anticipate much higher inflation in the years to come.

Look back 20 years and think about how much things cost – a lot less than today. So you need to realize that your future standard of living is going to cost more than you may be currently planning.

The key to financial security at any age is to hope for the best, but plan for the worst. Nothing is absolutely guaranteed. And just like a real highway, the road to retirement can often be filled with unexpected detours and hazards. So you’ve got to give yourself plenty of time to get there. With the right planning, you might even arrive a little early. LL

Steve Freidell is the author of the popular 20-segment debt elimination series that recently published in Land Line Magazine and now appears on our website at Steve has assisted clients in their case management, trading and portfolio management of fixed income securities since 1975. He started his career at the First National Bank of Kansas City and later served as first vice president with Commerce Bank, where he served his clients for 25 years. He is currently a partner in Central States Capital Markets LLC, a Kansas City, MO, financial services corporation. He can be reached at