Retirement in the New Normal: Part 4
In the last two blogs in this series, I shared seven tips on pandemic-proofing your retirement strategy. In this post I will share the final three with you. I cannot stress enough, the importance of taking action on these items or the importance of doing them with your advisor.
Here are the final three tips I encourage clients to consider implementing in their retirement strategy.
8. Adjust your mindset when it comes to your kids’ education.
Say you have children that will be entering college when you are in your 50s. Taking on the skyrocketing costs of a college education and supporting all the extras that come with a kid in college like spending money, food, clothes, and other expenses can be financially taxing. These things also take time and money away from planning for your retirement if you haven’t really thought about a retirement strategy until you’ve gotten your kids through school. In that statement I include all the other things that drain your finances when you have children like private school tuition, expensive summer camps, etcetera.
I have seen parents focus their spending on their children to the detriment of their retirement savings. While it’s a noble thing to do and I’m certainly not suggesting you save for your retirement and cheap out on your kid’s education, I do think striving for balance is what we need to focus on. To that end, I’ve seen parents who’ve had to declare bankruptcy because they failed to balance retirement savings and college spending has overwhelmed them financially.
I know that as parents we all strive to have a “put the kids first” attitude and there is nothing wrong with that. However, when it comes to retirement, especially retirement in the new normal, adjusting your priorities and putting your retirement first is key. It’s like the old adage about putting your oxygen mask on first in a plane crash and helping others with theirs afterward...if you die of oxygen deprivation you can’t help anyone, putting your retirement first means that you will be more financially solvent in the future. This means that you can be even more helpful to your children because you have achieved balance and there is more to go around.
9. Prepare for what the economy does.
The painful reality is that we really have no idea what the economy is going to do in the coming years. That means that preparing our finances for the unknown and unpredictable is absolutely key. Building your retirement funds now can mean you have more than you need in the future should you have to “borrow” money from those accounts if there is an economic free-fall.
10. The New Retirement raises your retirement preparation priorities.
To sum things up, we have an extraordinary amount of pressure on our income because we need to do so many things with it. We don’t know what your career, the economy, or college expenses, among other things will do to your bottom line. These financial demands increase as we get to our later years. That is why I believe it is imperative to work with your advisor to look at the big picture through the pandemic, worst-case-scenario lenses, and prepare for anything and everything now to create a holistic balance in all areas of your finances.
My role as your advisor is to help you get your financial house in order, empower you through sharing my knowledge, and create more confidence in you as an investor by doing these things. I hope you find value in these tips and please reach out to schedule an appointment to review your retirement strategy and implement the appropriate steps I’ve outlined this month.
P.S. If you enjoyed what you've read here and found it beneficial, we encourage you to share it with your friends and family. I firmly believe that an educated investor is more confident, which leads to healthier finances and fewer sleepless nights.
Until next time...