Retiring With Dignity
Recently, I had the opportunity to counsel a young man about his financial life,
how to get out of debt,
save for an emergency fund and for his kids college.
All these goals seem possible and even attainable to him and his wife, but not saving for retirement. This goal to him seem like some sort of insurmountable mountain to climb.
They were resigned to the possibility of working for their rest of their lives to maintain their lifestyle. It got me thinking. Why? What causes a young couple like this to feel so defeated about the topic of retirement that they don’t even want to get started?
After talking in greater length about their goals and how to address retirement the picture got clearer and so did their objections. Here’s a list of some of the reasons why:
They are in debt: They could not even conceive saving for retirement since they were still in debt. Thankfully their level of debt was not so high that they could not get out from under it.
Debt was robbing them of money but more important it was taking their time.
Time to save and allow compounding interest to work in their favor.
With a simple but effective plan they started to see how they could get out from under their debt.
They did not trust the stock market: They survived the stock crash of 2008 and even lost a home to the downturn, so they implied that since the stock market was the cause of this then they needed to stay far away from the markets.
It is true that the stock market suffered during 2008, but almost 11 years after the downturn in the markets, the values have come back up to the pre-2008 levels and the market have hit new highs of growth.
Even if they are not fans of the stock markets there are other avenues for saving for retirement and the stock market should not be something to fear but they should see it as a tool for saving.
Lack of information is holding them back: They simply had no idea where to start and who to talk to. We see this a lot. Folks see all the commercials on TV and have no idea who to trust and where to go to get started.
What we recommend is to look for a fiduciary professional who has the heart of a teacher and wants to teach them every time they meet. This individual should be a non-captive agent that can give them access to hundreds of funds and only gets paid when they do well.
They need education: They considered the topic to be so confusing that they did not want to address it. They mentioned that it seem like a new language that they did not speak.
So my advice was to learn the language. Pick up a couple of books on investing, listen to podcasts, youtube, etc. This day and age there is a wealth (pardon the pun) of free information about investing.
They have time on their side: They thought that since they are young that they could get started at some point and make up the difference in no time. While this is somewhat true, the reality is that they are missing out in huge gains if they are not investing since compounding interest is not working in their favor.
Our advice to this young couple and to you is GET STARTED NOW.
We hope that this advice has some value to you and if you are interested in having a conversation with my husband about this topic feel free to reach out through this post.
He can help you no matter where you are on your financial journey.