Quit Kicking the Can

Kick The Can- A child’s game related to tag, hide and seek and capture the flag. All my friends and I played in my neighborhood when we were growing up. Sneaking around in the dark, hiding behind a bush and then jumping out right when the “guards” weren’t looking and kicking that can as far as I possibly could to win. 

Kicking The Can Down The Road is also a phrase describing someone who is procrastinating, which is the popular game adults now play…especially as it relates to insurance & retirement planning.  Constantly saying, “I’ll get to that later, or when I get that raise, or new job, or after I buy that car/house,” so on and so on.

The definition of habit is: a settled or regular tendency or practice, especially one that is hard to give up. What sticks out with that definition is the end: One that is hard to give up. You create habits by doing something or by not doing something and too many people have gotten into the habit of not saving, or even planning. 

For almost every situation in life, we have to ask ourselves “Why?” Why do we postpone planning? Why do we not take this serious? Why do we not want to sit down and put a plan together? We put more time into planning a vacation or a birthday party than we do our financial future. As it relates to finances, I always hear people say that they want to enjoy the present, they’ll figure it out later.

The real question is: Why should we start putting a plan together?

As I’ve gotten older, I’ve realized the two most important things in my life are enjoying relationships with family & friends and living a life with peace of mind. Peace of mind to me means many things but one of those is making sure my family is financially sound, now and in the future. Putting a plan together is about sleeping easier at night, it’s about putting yourself in a position where you have options in the future.  I never thought I’d quote Chris Rock in my lifetime but here it goes: “Wealth is not about having a lot of money; it’s about having a lot of options.”

We can’t predict the future, nor should we try. We do know that life changes, specifically your goals & priorities. Will you be able to pursue those or will you be stuck in your ways because you have no other choice?? 

Are you prepared? What’s your plan? Answer these 4 questions:

1) What rate of return do you have to earn to not outlive your assets?

2) How much do you need to save to not outlive your assets?

3) How long will you need to work to not outlive your assets?

4) How much can you spend monthly to not outlive your assets?

If you can’t, you should. Quit kicking the can…..unless you’re a kid.

What are your retirement paychecks?

Have you ever had a full commission job during your working years? If so, you understand the unknown mindset. Even if you’ve had a good week, month, quarter or year….you’re not sure what next week, month, quarter or year brings so you often live conservatively….or maybe you should. On the flipside, full commission jobs often have a greater upside and ‘win big’ opportunity. For some, that appeal overshadows the unknown.

If you never had a full commission job, maybe the mindset behind the unknown did not appeal to you. You needed certainty, predictable income to live life….the known.

The unknown oftentimes paralyzes us. It prevents us from spending, doing, taking risks….living life.

With that said, it surprises me that so many people today are living the equivalent of mostly a ‘full commission retirement.’ Their guaranteed, lifetime income is oftentimes only social security. Their other dollars are often coming from investment withdrawals that may be too conservative because of the fear of future unknowns.

They spend their entire career saving and then in retirement they sometimes hoard their money out of fear. Fear that maybe the market crashes, interest rates stay low, they live to 100, healthcare costs, etc. And then…..they die.

What this means is they may have never enjoyed the dollars they saved so, ultimately, someone else gets to. There’s nothing wrong with providing a legacy but that should be part of the plan, not the default.

Retirement spending can be difficult because we can’t answer the 2 main questions: How long am I going to live? What returns am I going to get on my money? If we could, it’d be an easy math problem.

Questions to ask yourself as you prepare for retirement: Am I a commission person or do I prefer base salary? At minimum, how much of a base salary do I need to cover basic living expenses?

There are sources of guaranteed, lifetime income*, such as: Social Security, Pensions and Annuities. Figure out what your social security and pension (if available) will provide you. How do you feel about that amount? Do you need more base salary?

It’s okay to have unknowns in retirement but it’s not okay to go without a plan. A plan that addresses your fears can help you spend your $ – live your life.

You’ve maybe done a good job at saving. Now, what’s your retirement income plan?

*Guarantees are subject to the claims-paying ability of the underwriting issuer.