When you think about any successful venture it’s common that you only pay attention to the end result.  Watching professional golf is a terrific example.  When you watch a professional golfer hit a pristine golf shot it’s easy to say “that was a great shot.”  Do you know why that shot was so good?  The shot was so good because of numerous hours of practice, hitting shots just like the one that was taken.  The work was put in and the end result was indicative of that. 

In the retirement world, the “work” you put in is not necessarily going to your actual job.  Obviously, going to work and putting money away is important but that is rarely enough.  The “perfect shot” in retirement for most people consists of two parts.  Achieving your specific lifestyle in retirement and knowing you will not run out of money during your lifetime.  To reach that end result you want to be sure to put in the work, which is having a written retirement plan.  A written plan that can grow and adapt to your needs and goals as you inch closer and closer to retirement.   

There are plenty of reasons to have a written plan but we’ll focus on a few of the big ones.  As you read this you may think of some that aren’t on the list, don’t hesitate to reach out and let us know what you come up with. 

The first, which many say is the biggest, is to see visual evidence that you will not run out of money in retirement.  Could you imagine getting to that point where you think you are done working forever, only to run out of money and have to go back to work?  That would be catastrophic.  We preach all the time, there is a giant difference between going back to work because you WANT to and going back to work because you NEED to.  A well-crafted, well-informed written plan can cut down your chances of running out of money.  Similar to a vision board for a vacation, it can also invigorate you to save more money when you see it written down on paper that you may be able to retire 3 years earlier than you originally thought.  Also, when you list out everything that will happen in retirement you are less likely to be caught off guard and have your retirement derailed.  A good retirement plan has “what if” scenarios that are covered.  Think of it as a stress test for your retirement. 

The alternative to finding out you won’t run out of money is scary but manageable.  You run your financial plan and now you have clear-cut evidence that you will run out of money.  What now?!?!  At this point, you should consider yourself lucky that you have that knowledge and be proud that you figured it out.  Now you can take the necessary steps to improve your likelihood of ideal retirement.  We see this all the time in the medical field.  Not going to the doctor does not diminish your chance of getting sick.  If anything, it hinders your ability to put the proper treatment in place.  If you went to the doctor tomorrow and found out your blood pressure and cholesterol were high you could take numerous steps to remedy the problem.  You could change your diet, exercise more, or take pills to get better.  If you were unaware that there was an issue you may not take those steps.  Knowledge is power and putting off the proper diagnosis could be more detrimental than the actual ailment. 

A big reason that a written retirement plan can help you not run out of money is that you will properly figure out how much your retirement will cost you.  When you think of your retirement, it is important to break down how much it will cost you each year.  Other things to consider are sources of income, medical costs, and inflation, just to name a few.  A good retirement plan will make you aware of all these costs and tally them up so you know how much money you will need to make it to your expected life expectancy.  If your family tends to live longer you may need to account for a few extra years.  The goal for you should be to take a conservative approach when thinking of all these costs.  You’d rather be overprepared than underprepared.

Lastly, having a tangible document is great for making updates as you grow.  Life is incredibly unpredictable and being able to adapt your plan when needed can be the difference between a comfortable retirement and a stressful one.  In addition to the updates, the “what if” scenarios can be beneficial to you.  As your plan evolves you can see how a down market or a year of not working affects your ability to retire, and you can make the proper adjustments if necessary.

Going back to the golf example, you can’t expect to be great at golf if you don’t go to the range and put in work.  Think of anything you want to be good at, playing the guitar, cooking great meals, knitting a sweater; all these things require a concerted effort to make the end result be up to your standards.  Your retirement is no different.  Make the effort to create an in-depth written retirement plan that can lead you to the retirement lifestyle you deserve.  If you are unsure where to start give us a call.  We will help you construct a retirement plan designed with one end result in mind: your ideal retirement. 

Investing involves risk including the potential loss of principal.  No investment strategy can guarantee a profit or protect against loss

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