The “Best-Cast Strategist

Are you close to retirement? Or does retirement seem so far away, you can’t even envision it? Whatever your time frame, you probably do want to retire some day.

A 2011 study from the Metlife Mature Market Institute contains a lot of interesting information about how retirees and pre-retirees create a financially successful retirement. We always hear about the challenges of achieving a secure retirement, but this survey asked respondents who felt that they were successful in their work towards a “best-case” retirement strategy how they did it. The survey found a common set of approaches to producing the best possible outcome. Not surprisingly, there’s some planning involved.

According to the survey, a best-case strategist:

  • Stops, sits down, and focuses on the future…and talks about it
  • Has a sense of self-reliance
  • Thinks about the future – all the way to the end
  • Anticipates…or, expects the unexpected
  • Designates a budget column, today, for a future self
  • Sets and lives by personal financial rules
  • Engages in the “What ifs?”
  • Puts pencil to paper, or cursor to screen; Does the math – All of it
  • Gathers information
  • Seeks advice
  • Gets the house in order – literally
  • Starts as soon as possible

Over several blog posts, I’ll discuss these actions and what you can do to incorporate them into your life, no matter where you are in your journey towards retirement.

Stops, sits down, and focuses on the future… and talks about it

I’ve started with this attribute because I’d like to offer this series as a conversation starter for you as you consider your own retirement readiness. I know we’re all busy, and sometimes it’s hard to find time to work out this week’s schedule let alone look at the future. But best-case strategists set aside time to talk about their futures and develop that vision over time. Simply stopping and focusing on the future helps us prepare for the expected and the unexpected. If you’re single, discussing retirement visions can be an interesting conversation with a good friend or group of friends. For couples, I suggest setting aside specific time to discuss your future plans. Just talking out your future can influence daily decisions as you have a future framework to guide you.

You might start by sharing this article and asking your friend, partner, or spouse to set aside time to talk about it. You might be surprised and rejuvenated by the conversation and the impact on your perspective towards future planning.

A sense of self-reliance

Many Best-Case Strategists have backgrounds that encourage savings. They may have been children of depression-era parents, or may have grown up poor and having to work for everything. Others who did not grow up with the savings “bug” develop it by observing others, or by having an experience that changes their perspective on savings. Best-case strategists know that they are responsible for their own futures.

This doesn’t mean they don’t consider or use the benefits that are available to them such as Social Security and pensions. Rather, it means that they know the limitations, of those programs compared to how they want to live in retirement, and take action in advance of retirement.

Most of us know we need to save, but may not know how much. The amount contributed to Social Security is mandated, so there is no choice to be made there in terms of how much to set aside. However, contributions to retirement plans and other savings are a different matter. We know that tax-deferred contributions to IRAs and 401(k)s are limited. It may be, however, that saving even the maximum to these plans doesn’t provide enough savings to cover your desired retirement lifestyle. That’s why it’s important to look even early in your earnings life at how much you need to save towards your retirement goal. You can do this using benchmark savings rates or by calculating required savings rates assuming you want to continue at your current spending rate in retirement.

The message to younger folks? “It’s never too early”. The message if we’re closer to retirement? “It’s never too late”. Building savings into your lifestyle now – no matter where you’re starting from – will provide additional resources (and flexibility) in the future.