Enter the Golden Age
So you finally reached “that age” and you’re on the brink of your “Golden Years” – Congratulations! There’s nothing more exciting than achieving a life-long goal, especially one you’ve been working your entire life for.
Everyday from here forward will be a Saturday, and although most retirees don’t feel retired because they keep themselves busy, they all agree nothing compares to the freedom they now have.
They can do what they want when they want. But before you set sail into that Sunset of eternal bliss, you’re going to be faced with several options pertaining to the blueprint of your retirement. The wrong decision can have a profound impact on both you and your family’s future.
One mistake could easily jeopardize the foundation of your retirement plan altering it’s ability to withstand the hard times many face through the even changing landscape of life and the economy.
Majority of baby boomers and seniors feel confident when it comes to retirement partially because most belong to a retirement system on the brink of extinction known as – The Pension.
As a supplement to retirement most will receive Social Security and take an income stream from their savings or a defined contributions plan, like a 401(k).
But will it be enough? What if market volatility crushes the principal in the investment accounts you planned to use towards your expenses? Worse yet, what if one of you die, how will your spouse continue their life style while paying the bills considering 50% of the household income died with you?
What if you or your spouse has a long-term care need, will they be capable of lifting your heavy body up the stairs, down the halls, to the car or will you pay the average cost of $10,000 per month for in-home care?
Our mentor, Mike Sweetland, spent the past 30 years as a financial advisor answering these questions. He’s led hundreds of clients through the gloom and doom and monotony of building a bulletproof retirement plan, dedicating late nights to running hypotheticals, utilizing costly and sophisticated software to cross and stress test plans – plans capable of withstanding tumultuous times, but
Mike’s greatest quality was his ability to make complex things small. One of the most admired qualities of an advisor regardless the field is his or her ability to “take the unknown, to the known, through the use of the familiar”. In regards to retirement, we use the same approach with our story of “The Baseball and the Tire”.
The Baseball and the Tire A Retirement Analogy
To make retirement simple, let’s imagine I hang a diesel truck tire by a rope 5 feet in front of you at eye level. The tire is very large and so is the hole in the center. I take a baseball and place it in your hand and ask you to toss it through the tire 100 times… how many times do you think you could make it through…80…95…100? Most people say 100, and unless you have terrible aim, you’d probably get 100/100 as well.
Now imagine I replaced the diesel truck tire with a Toyota Corolla tire, the tire is smaller and so is the hole in the center, on top of that I move the tire 50 yards out – that’s half a football field! With that same baseball, you get to try another 100 tosses… how many do you think you’d make this time? Answers vary, but the average guess is 15-20 times… It’s low right?
Well, the distance from you to the tire is equivalent to how many years you’ll spend in retirement. The further the tire, the harder it is to make the ball through, thus the more difficult it is to make it through retirement. The opposite is also true. The closer the tire, the easier it is to toss the ball through, thus the easier it is to make it through retirement.
The size of the hole represents the size of your assets. The larger the hole, the easier it is to make the ball through, thus the easier it is to make it through retirement. The smaller the hole, the more difficult it becomes to make the ball through, thus the more difficult it is to make it through retirement.
The highest probability of a successful retirement is having a lot of assets and a short retirement (dying early, or retiring late). The lowest probability of a successful outcome is having very little to no assets and a long retirement (living long, or retiring early). Your pension, social security and retirement savings account are equal to the size and distance of your tire and this book was written to help you understand how to keep it from shrinking or even grow it while keeping it at the same distance or bringing it closer.
Albert Lee and Joshua Crowe spent months compressing hours of mentoring, studying and working with hundreds of clients to bring you the Ultimate Guide to Retirement. Much of their influence comes from Mike Sweetland and several other mentors they utilize to this day. Joshua Crowe’s Father, John Crowe, had a large influence on their decision to write this book as his Father is CSRS employee of USPS for over 35 years in Rancho Cucamonga, California.