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Behaving Your Way to a Financially Satisfying Retirement

It doesn’t take a genius financial planner to know that no one wants to reach retirement age with insufficient savings to fund his retirement. Yet, thousands of people find themselves in this situation even though they earned a paycheck for 40+ years. Why does this happen, and more importantly, what can you do about it?

Imagine this: you invest X dollars every pay period for 30 years and average 6% annual growth. How much money would you have in your retirement fund at the end of those 30 years? More importantly, how much income could you draw from your retirement fund each year? The math isn’t difficult, but history reveals that taking action to assess one’s situation and develop an accumulation behavior is ignored by far too many.

There are only two possible outcomes in retirement. Either we outlive our money, or our money outlives us. Once we accept that we will experience one of these two outcomes, we can move forward and begin doing something about it.

Your retirement success or failure depends upon the creation and implementation of a date-specific, dollar-specific plan. Several years ago, while I was reclining in her chair, my 20-something dental hygienist told me she wasn’t going to divert any of her paycheck into her employer’s 401(k) plan. Rather, she was simply going to trust that retirement would work out for her in the end. As the saying goes, “Failing to plan is a plan to fail.”

How much of your earned income would you like to replace when you retire - 80%? 90%? 100%? To do so will require dedicated behavior during your working years. The sooner you start, the easier it can be.

Now imagine you’ve left the workforce. What happens now that your paychecks stop flowing and you’re supporting your lifestyle with your accumulated assets? Is this the time to sell your stocks and hold your accumulated dollars in bonds and cash? Probably not. What you need to understand about this period of your life is that a two to three-decade retirement is not so much a problem of dollar preservation, but rather a problem of purchasing power preservation. This is a vitally important distinction. If inflation causes products and services to rise in cost by 3 to 5 percent every year, then holding your retirement dollars in asset classes that return 1 to 2 percent could likely put you on the path to outliving your money.

In summary:

  1. Understand that everyone will experience one of two outcomes: you will outlive your money or your money will outlive you.
  2. Create a date-specific, dollar-specific accumulation plan - NOW. If you want X spending dollars per month when retired, you will need to accumulate Y dollars during your working years.
  3. Understand that inflation is the ever-present enemy. It is purchasing power you must maintain over your multi-decade retirement. To do that, your retirement fund’s growth must outpace inflation.


Your behavior is the predominant determinant affecting your retirement outcome. It’s not going to magically work out for you. There are thousands of caring, experienced financial planners ready to help you develop, implement, and monitor your plan, but you must ask for help.

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