Getting to your Retirement Exit was created out of a passion to share information on how to properly prepare everyday people for their retirement. It was created because one of the most important decisions that would last over the next 20+ years would often be made in less than 24 hours without direction or coaching. Visit our website at www.myretirementexit.com for more information.
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Mistakes Were Almost Made
RETIREMENT MISTAKES WERE
ALMOST MADE (2 min read)
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.
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 myretirementexit.com
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.
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