The day will come when you’re going to walk through an invisible golden portal with a golden portfolio to match, and you’ll begin to live the life of your dreams. Imagine having your condo on the beach in Waikiki and every day is a combination of tropical fruits, coconut sunblock lotion, paradisal music, and sunset barbecues. No? Oh, okay, so maybe instead of a tropical paradise you prefer a snow lodge on a small ranch in Colorado where you can ski for miles and entertain your grandchildren with toboggans and horse-drawn sleighs, a warm fire in your livingroom’s wood-stove and summers filled with blue skies and big-horned elk. No?
So what exactly do you want? If you don’t know, the chances of your having it diminish. Yes, of course you can always build a gigantic retirement fund and hope you have enough for what you’ll eventually decide you want to have. However, think about how much more empowering it is to set your goals on precisely what you do want to have, and then work toward achieving a dream life come true.
The key reason it’s important to identify your retirement goals is not only because it’s so empowering to achieve them, but also because you can stop driving yourself into deep neurosis wondering if you have enough cash for whatever ambiguous cloud of retirement images are rooted in your cerebral cortex. Wouldn’t it be so much easier to know exactly what you want, determine its exact cost, and then build your portfolio to help you achieve precisely what you want to have and enjoy in retirement?
A lack of goals can drive you crazy because you’ll never be certain you have enough. Many people choose not to plan because they are either frightened of the future, or don’t really know what they want, or have too many choices buzzing around in their head and don’t know which one to pick, are simply too busy to project the future they want, or they don’t understand how to create, set, and follow financial plans.
If planning for your future is too much to grasp, start out simply by making a list of all the things you can think of that might bring you security and pleasure. Like you, most people have good imaginations and can think of a number of ways to spend their time beside going to work every day. Think about who will be with you in the decades to come…a spouse, children, grandchildren? Think about spending your elder years in a warm climate or cold climate; which do you prefer? If you have a family, do you want to live closer to them? Where are they likely to live when you’re in your 70s or 80s? Do you like to travel, or do you have any hobbies you’d like to enjoy more thoroughly? How will you be able to make your retirement funds last the length of your life? Is there some way you can increase your income when you’re in retirement?
Once you have your master list, spend some quiet time thinking about the choices you’ve listed and begin to filter them by whatever priority feels most right for you. Eventually you’re going to wind up with a core list of choices you feel really good about and which now helps define your path. Yes, things can change. Things change all the time! But as much as things change, they can also remain the same, and it’s better to pick a star to follow than stare at all the stars and never choose one.
The good news is that once you’ve identified some of your core goals, you can meet with a financial planner who will help you monetize the value of each of the goals you’ve chosen. The cost of that condo in Hawaii or the horse ranch in Colorado can be defined monetarily. The cost of an annual trip to Europe or Asia can be calculated. Even the cost of your future bills can be monetized and everything you want in the future will convert into a number…your investment target. Once that happens, you can begin to invest sensibly with your target in mind. You’re likely to get there a whole lot faster and with much less mental stress than shooting your rocket into the sky and hoping you hit something!
Make your list today. It’s easy to do! Then make an appointment to speak with your investment advisor about how you can monetize your financial goals and make your dreams come true.
Joseph M. Maas, CFA, CVA, ABAR, CM&AA, CFP®, ChFC, CLU®, MSFS, CCIM
Synergy Financial Management, LLC
701 Fifth Avenue Suite 3520
Seattle, Washington 98104