3 Steps To An Unbreakable Retirement Plan

Simple path. Create a retirement plan which doesn’t break. Sure, it might flex a little but it does not need to break if done right.

Planning one’s retirement is complex, confusing and frustrating at the same time. It doesn’t have to be that way.

Apply these three steps to your retirement plan and watch your confidence grow. Go from breakable to unbreakable. Live a great lifestyle without all the stress.

Step #1 Become financially unbreakable!

Sure, everyone loves getting the biggest returns. Contrary to what fly by night guru’s say. The biggest returns come from sticking around long enough while staying in the game.

When rampaging share markets march towards new heights.

Holding too much cash might seem like the wrong thing to do. Fear of missing out (FOMO) kicks in. You see the return you’re missing out on.

If shares return 10% a year and your cash reserves are earning 1%. That difference of 9% can play mental poker with you.

What if those cash reserves prevent you from making a dangerous move. Selling share investments when share markets are down. The return from your cash holdings can equate to many times the rate earnt on your cash.

Sure, you could try picking the next winners.

But what wins in the long term?

Holding your nerve, staying invested through times of havoc and chaos will always win the day.

One reason why we recommend clients keep appropriate cash reserves. No matter the return. They win when not forced to sell share investments.

Step #2 Planning is good, but plan on it going wrong

You’ve heard the old saying “fail to plan, plan to fail”, right?

While the best-laid plan can set you on a path to what you want. The same plan is tested when it interacts with reality.

Pilot’s set a path from their departure point to their destination. It’s a smooth flight path. Pilot’s know 90% or more of flight plans never go according to plan. The sole reason pilot’s fly planes. To adjust to whatever in-flight disruptions they face.

Retirement is no different. No one can tell the future. Who could foresee the Tech bubble in 2000, September 11th, Global Financial Crisis and COVID-19?

As we say to our clients, a plan is great until it crashes head-on with reality. It’s how you manage when the plan hits the fan. Walking this path with many clients we’ve seen the future and bring those lessons back to the now.

Using those observations to better help navigate retirement paths.

A roadmap on how you are going to get from where you are to where you want to be is important. Even if you are guessing. It’s what you do when your plan hits the proverbial fan which will define your success.

FACT: the future is full of unknowns. Embrace this and you’re halfway there.

This doesn’t mean you need to be conservative. But rather add a little wiggle room in your plans.

How much room for error do you have in your retirement plans?

Sure you can add your details into an online calculator. But it’s likely to be wrong in any one of the key factors, returns, inflation, interest rates and life expectancy.

Building a margin of safety allows you to go about living a great lifestyle. Without worrying about the money.

A margin of safety raises the odds of success. It’s the magic potion in your retirement planning.

Step #3 Applying a barbell mindset!

Morgan Housel, in his book titled “The Psychology of Money”. Talks about being optimistic about the future. But be paranoid about what will prevent you from getting there.

Couldn’t agree with this more.

Look at any investment chart. The odds are in your favour over time. Only if you embrace it and protect yourself from short term paranoia.

Things will balance out over time. The middle will be filled with misery. Think COVID-19 and the Global Financial Crisis.

We know investment markets go up in value over time. But look at any chart and it’s filled with landmines splattered all over the chart.

If you want to maintain your wealth, a paranoid and optimistic mind is required. Paranoid about what will stop you from getting you from where you are to where you want to be. But optimistic about the future. The odds are in your favour. But know there will be landmines along the way.

Retirement Planning is complex. It’s like trying to solve a Rubix cube. It’s frustrating and challenging at the same time.

The key to a successful retirement plan and preserving the wealth you have built. Is applying this mindset in the real world. It’s not easy. Get this right and you’ll achieve a confident and comfortable retirement…

Do you want some help to build an unbreakable retirement plan? Schedule a call here and we’ll help you to start answering the BIG retirement questions you have..

Your guide in helping you live a great life with more confidence!

Glenn Doherty – CFP – Money Mentor | Taking the stress out of planning your self-funded retirement | Founder of Jigsaw Private Wealth

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Advice Disclaimer: Any reference in this publication to the provision of advice refers to advice of a generic nature, and should not be taken as product or investment recommendations. Before any action is taken based on the information provided, independent financial advice from a licensed financial adviser should be sought. Financial Freedom Project Pty Ltd ATF GA & DC Doherty Family Trust Trading as Jigsaw Private Wealth is a Corporate Authorised Representative of Exelsuper Advice Pty Ltd. The information contained in this publication is of a factual nature only and is not intended to constitute financial product advice. Information is current as at date of publication. This is an online information blog. It does not imply an offering of securities.