October 9, 2014
By Bob Brooks
I don’t think I will ever retire! Over the past 22 years of advising, I have heard that phrase more than I want. The reality is that most people take a peripheral look at their situation and come to a conclusion without really looking at every angle. Here are some things to consider:
Taking advantage of social security
Contrary to popular belief, it will be a while before social security disappears. While it is here, take advantage of the benefits. There are strategies that most people don't know about that enable you to get the most out of social security. Most see it as you choose to take it at age 62 or 66 or 70. That is not the case. There are strategies that you can consider to maximize the most of social security which in turn can increase your cash flow.
Could 70 be the new retirement age?
Let's face it - people are living longer. It was released just this week that the average lifespan is now the longest on record. Increasing your retirement age by 4 to 5 years might seem desirable. However, it might if it gives you the type of retirement you want. Waiting can give you that much more time to accumulate and deleverage your life (more on that later) Plus you can get maximum social security benefits at age 70.
Are you taking care of your adult kids at your own expense?
We take care of our kids hopefully until they are on their own which is in their early twenties. However, life doesn't always work out that way and we continue to take care of them throughout their 20's and into their 30's. A parent can get so accustomed to doing so that they don't realize that they are actually hurting their own situation. If you are in that situation, take stock of how it is effecting your retirement. Then determine if you are ok with that. If not, figure out how to wean your child off of your pocketbook and get them out on their own.
Do you really know your monthly expenses?
This is at the crux of the problem for most people. When asked what someone might need at retirement I often get – 4000 to 6000 a month. Well is it 4000 or 6000? There is a big difference. Know that number like the back of your hand. It is an invaluable piece of information. You might find you don’t need nearly what you thought.
Determine what part your retirement savings will play
I know this might sound crazy. However, most people save all of this money and have no idea what benefit it will create during retirement. Figure out how you much income you can take from what you have saved. You might be surprised.
Deleverage, deleverage, deleverage
Make it a goal to have no debt (including the mortgage) at retirement. When you have no debt payments, you need less investments to create income to pay those debt payments. Plus, being debt free creates options.
Don't forget the importance of cash
Cash is never really considered as a part of a retirement plan. Most people don’t look at their cash stockpile as an asset. Cash plays an important role during retirement. If you have it, then you are closer to being successful than you might think.
Be creative, realistic, and wrapped in Prayer
A successful retirement plan is a creative retirement plan. Be realistic where you are and accept it. From that place, you can create. Finally, make this about what God wants you to do in this great time of your life and not what only you want to do. There will never be a time where you have this much freedom. What will you do to serve Him?
If you want a full assessment about where you are right now, send me an email at