Skip to main content

Mistakes Were Almost Made


I remembered 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.

Alma’s real 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 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.

Click here to subscribe


Popular posts from this blog

One Retirement Myth To Be Aware Of Today

I love talking retirement and rightfully so, as I have been working with clients and their portfolios for nearly 20 years. One thing that was hard for me to understand as a young life insurance agent was why I had to know everything about a client before I started writing their life policy. My manager would always tell me that you have to do confidential questionnaires. My thought as a young agent was why when they wanted insurance, and I want to sell it to them. This type of approach was a win-win for me trying to get a commission. As a veteran in the business for more than 35 years at the time, he said you young kids just do not get it. How do you go into a doctor and tell them your elbow hurt because you bruised it, and they give you some cream and send you on your way, only to discover that you have a fractured bone chip? Now that I am older and around the same age, he was when he started sharing his sage wisdom with me, I truly understand what he was talking about now that I am ol

Why I Popped The Retirement Question

I was creating a retirement plan for a client by the name of Ms. Smith the other day, and I popped the question to her. She said, well, I don't know. It depends on how I feel at that time. I said what do you mean how do you feel at that time, better yet how do you feel about it today. She said I feel pretty good about it today. I said I have been married for 23 years and have never proposed this question to my wife. She said you should; she would probably feel the same way I do about it. The question I had popped to Ms. Smith was, "If we could go back to November 2007, the "Great Recession" and her entire retirement portfolio was cut in half by 50% would she stick it out?" She said mainly she was in a different place financially and mentally at the time verse where she is now. I told her I get it, and she should be in two different areas in her life versus back then, but preparing retirement plans, I have to ask that question. Not because it's on my q

What To Do with Your Retirement In A Market Correction

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 s