In my first column, I talked about the myths of money and why, along with “it’s crass” and “it’s too complicated,” many people feel that “talking about money is impolite.”
It isn’t. Especially if you are one of the 77 million “baby boomers” born between 1946 and 1964 turning age 65 and beginning to retire in 2011. With a reported 44 percent saying in a recent Associated Press poll that they have little faith they’ll have enough money when their careers end, this could be one of the most important conversations you’ll ever have with yourself.
Understanding your emotions and channeling them to maximize your assets is an attainable goal. And once you understand the nature of your goals, achieving them is much easier. I like to begin this conversation with clients by asking some questions:
What are you passionate about? What are your dreams? Where do you want to be in five years? In ten years? What does that look like? What will it take to get there?
Coming up with the answers to these questions may be more difficult than you think, depending on your background and how you’re wired. When contemplating retirement, most people have not visualized what they will do when the day comes that they are no longer generating a paycheck. If they do have a concept, it’s often an idea ingrained in their minds since childhood. Some have a specific retirement date or activity in mind, usually based on their parents’ experience. “My Dad retired at age 62 so I’d like to do the same thing.” Others respond by saying, “I love what I do. I can’t imagine not working. I’d be bored.” Yet another response is, “I’ll retire when I can afford it!”
It’s shocking to hear people who dismiss this conversation because “my husband/wife takes care of the money.” It’s your responsibility to participate in the conversation with your spouse, not delegate it or defer it to some other time. Start paying attention. Life happens.
Retiring on your own terms so you can potentially have the financial freedom to live your dreams with enough money left to provide independence to pursue your passion, whether it’s gardening, golf, travel or volunteer work, is one reason to begin today to set your financial goals. Life is like a puzzle, and financial matters are many of the pieces we need to fit into the picture of our lives.
With advances in healthcare and medicine, we are likely to be living longer. The life expectancy for both women and men is increasing, and this trend is not likely to change. If we are living longer, we will need more money to survive. This is another important reason for starting the financial planning process now.
Like the beginning of a long road trip, it helps to have a road map with a destination in sight. You need to know where you’re going in order to get there. If you wait until retirement to do your planning and implementation, you’ve missed an opportunity to take advantage of compound investing – what Albert Einstein referred to as “the eighth wonder of the world.” The more time you have to potentially build your wealth, the more likely it will be there waiting for you when you need it.
As the Chinese philosopher Lao Tzu said, “The journey of a thousand miles begins with a single step.” You need to get started. Doing nothing won’t get you to your destination. Even if you’re not rich, you want to start thinking and acting like you are. Paying attention to your wealth is the best way to help you get there.
I welcome your comments. Just send me an email at Amy.V.Smith@RaymondJames.com. All names and identifying information will be kept strictly confidential unless written permission is given for their use.
Amy V. Smith Wealth Management, LLC, is an independent firm. Amy is a Certified Financial Planner (CFP) and Certified Investment Management Analyst (CIMA) and offers securities through Raymond James Financial Services, Inc., member FINRA/SIPC. Her office is located at
161 Fort Evans Road, NE, Ste. 345, Leesburg, VA 20176.
The opinions and recommendations here are those of the columnist.