Posts tagged Retirement Planning
The 4 Motivations

The 4 Motivations Behind Every Retirement Decision

Behind the scenes of every Fed’s personal decision to retire is a set of justifications for why the time is now right.  Every one of us will eventually have this mental tug of war comparing the pros and cons of retiring.  Every justification, every reason, every inspiration, or excuse that gets attached to our final decision falls into 4 underlying categories.

            The good news is that 1 of these 4 motivations will almost always result in a secure retirement with true financial freedom.  The bad news is that 3 of these 4 reasons commonly won’t.  The scary part is how few of us are really aware (or choose to acknowledge) which of the 4 influences are driving our own retirement decisions.

The 4 Motivations are:

Your Situation, Your Emotion, Your Information, and Your Finances.

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The Decisive Decade

The 10 Year Period That Will Shape Your Retirement Lifestyle

There is a critical period in retirement planning, a span of roughly 10 years that largely determines the sustainability of your lifestyle throughout the length of your retirement.  This 10 year time frame has no set start age, like Medicare or Social Security.  It is unique to each individual’s true retirement date – the point when you finally stop trading your time for a paycheck and begin relying on your assets to ensure your lifestyle.  But the most critical 10 year period of your retirement begins well before you stop showing up to work. You may be in the most decisive decade of your retirement right now without ever having been told since there is no formal announcement.

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3 P’s of Pretirement

Project, Protect, and Perfect

Pre-tirement: The 5 year period before one’s ideal retirement date.

            Pre-tirement is the phase during which we begin to adapt our views about money and investing in preparation for the transition to living on our assets rather than contributing to them.  Growing our retirement accounts (the Accumulation Phase) and spending them down safely (the Distribution Phase) are separate chapters of our lives with unique objectives and unique risks.  These phases are quite different and as such they require different approaches.  It is critical that you mentally recognize the transition from the Accumulation Phase to the Distribution Phase requires understanding a different mindset.

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