Preparing for retirement is a lot like training for a marathon – you’ve got a long distance ahead and want to do everything in your power to make it as painless as possible. Of course, there might be bumps along the way, but as long as you’ve put in the time and effort to prepare, you can hope for a successful finish!
- Understand that successful training occurs over time.
If you’ve ever run a race, you know that preparing is one of the most fundamental steps in ensuring a successful race-day run. If your body hasn’t been conditioned to run for miles and miles, race day will definitely be a struggle. However, training won’t just be long run after long run, but a mix of days with long runs, shorter runs, timed runs, and even days with no runs.
Just as your training schedule will vary from day-to-day, so will your retirement investments. Different investment products can help grow your portfolio in a variety of ways. Just as you don’t want to be only great at running long distances, keeping your investments in a well-diversified portfolio can help you to pursue the tasks you set out to achieve in retirement.
- Keep an eye on your diet.
Before a big race, most people carbo-load to calorically prepare for the race. Because the body burns carbs more efficiently than it burns fats, having the right amount of carbs in your system helps your performance while running.
When it comes to retirement planning, you also need to keep a close eye on your portfolio in the years leading up to retirement. Most people can’t afford any big losses, so it’s important to ensure you’re following a balanced “financial diet” to help manage overall risk.
- When it comes time to run, pace yourself.
When the race begins, it’s easy to get caught up in the adrenaline of the moment and shoot towards the front of the crowd. However, this spectacular beginning can really hurt you towards the end of the race. Not pacing yourself correctly early on can cause you some serious trouble towards the end, and might even be causation for not finishing.
In retirement, it can be easy to spend frivolously up-front, not thinking about the stretch of time ahead. Spending too much in the beginning of retirement can definitely cause some trouble later on in life, but having a strategic income plan can help you determine how much is acceptable to spend. You might even be able to spend more than you realize, but without strategic and mathematically sound income plan in place to show you that, you can’t spend with confidence.
If you’re wondering whether you’re prepared for your financial future, or looking to set up an income plan for your own retirement, we can help. Set up an appointment with one of our advisors today to begin the conversation, lace up your sneakers, and get ready for the greatest race of your life!
The information contained in this page is general in nature and should not be construed as comprehensive financial, tax, or legal advice. As with any financial or legal matter, consult your qualified securities, tax, or legal representative before taking action. Diversification helps you spread risk throughout your portfolio, so investments that do poorly may be balanced by others that do relatively better. Neither diversification nor rebalancing can ensure a profit or protect against a loss. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against a loss in periods of declining value.