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Which Guarantee Do You Want?

| February 17, 2020
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Suppose you have always dreamed of climbing Mount Everest…and one day you come across an advertisement that stated, “Summit Everest - Guaranteed.” As you scroll through the page there is another advertisement that reads, “Return Alive - Guaranteed.”

Recently, I learned a little fact about climbing Mount Everest. Are you aware that 80% of deaths on Mount Everest occur on the decent? Which is kind of like retirement…

Most people work extremely hard to get to retirement. They earn all they can and save all they can. Most people can do this fairly successfully with a little guidance. The greatest risks occur as they begin their descent into retirement.

The biggest fear most retirees have is running out of money. And in reality, they should. From day one, they are at the mercy of the returns on their money, interest rates, increases in the cost of living, and the costs of healthcare and taxes. Then there is the risk they face if they live too long, die too soon and leave behind their spouse, get sick or become frail. All of this has to be considered even before they worry about their five trips the first year out of the gate or what they will do when all the dust settles? Can they afford to play more golf or pick up another hobby? Should they stay in the same house, town, or even state? How can they spend more time with their family without being too much of a nuisance? The answer to all of this includes money at some point.

Do you remember the famous commercial by ING back in 2008 where people were walking around with big orange numbers that said “What’s your number?” Having enough money to retire is like reaching the pinnacle of Mount Everest. It may allow you to retire successfully, but it doesn’t mean that you will stay retired successfully.

Staying successfully retired takes planning and no matter what anyone tells you, there is no cookie-cutter way to do it. If anyone tells you that, they are selling something. Even guaranteed income has risk. Guaranteed income may mean going broke safely simply because you will have a little less purchasing power each year. Next time you go shopping, ask yourself, “What would I be willing to put back on the shelf next year because I can no longer afford it?”

There are plenty of “What ifs” and things you won’t know in retirement. The scariest is even worse: What is there that you don’t know that you don’t know. For most people, their first time to retire will be the only time they retire and a DIY retirement may be the biggest risk of all.

Retirement planning is an area our firm has been teaching since 1989. It is not just our experiences and knowledge that come into play, it is also the experiences of the hundreds of families we have helped along the way. We know retirement is about “returning alive - guaranteed.” You want to Live Life on Purpose and we want to help you get there.

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