If you are receiving a paycheck, you should
be learning how to make it work for you.
Subscribe to magazines, take classes, or
hire an advisor, but make sure you understand what it will take to be able to support
yourself when your employer no longer
will. The sooner you start paying yourself
first, the easier it will be to reach your
goals. Retirement can simply be a tool to
move you from one realm to another. It is
important to know exactly what you have
coming from your employer, so that you
can maximize any benefits before you
leave. Begin your financial planning with a
What would you need to do to get yourself on a cash basis? Add paying off debt to
your timeline so that you will have the highest bills while you work and lower or no bills
when you retire. You will never look as good
on paper as you do while you are working.
Protect your credit as well as your savings.
Plan for big expenditures as you do for new
equipment. Make sure you don’t have a new
roof and two cars to replace the year after you
start living on the dole. What insurances will
you want to have? They get more expensive
as you get older, so think ahead about life and
long term care. Think twice about what you
spend on, and add freedom to your list of
needs versus wants. If you can begin to
downsize your expenditures, you can begin
to live large; to take stock of unnecessary
spending and fund a quality retirement.
If you have more than five years to
work, save as much money as you can.
Maximize your savings and your tax free
contributions. Join AARP and study the
trends and issues. If you have fewer than
five years left to work, practice living on
your retirement funds. This will help you
save more towards the end, and will also
help you to see exactly what you spend
money on and where you can or will have
to cut back. Financial sacrifice is much easier to take when you still have the big paychecks coming in.
As you retire, you will find that it is dif-
ficult to use your own money. Remember,
our generation (the Boomers) was raised
by post-Depression parents. Whatever we
saved was to stay in our savings. Know that
this message will come back to haunt you.
The voice inside, the one who looks over
your shoulder, will reappear when you
make that first withdrawal. You know that
what you take out will not be replaced and
it puts a whole different perspective on
what you spend. You will dutifully await
the automatic deposit of your Social Secu-
rity check or your retirement check and
you will feel as though you are on the dole.
Remember, you worked hard for all of it
(and you should be awarded a Mensa
membership if you can navigate through
your Social Security and Medicare appli-
cations). You will quit breathing when the
market plummets because now you are
finally seeing that investment statement as
your life line. You will mourn the loss of
the dollars you had on paper, those same
dollars that your extra voice tells you not
to touch, and you will survive.
There are many ways to retire. You might
want to work part time, or start a business,
or follow your dreams to wherever. It is
important to find what is best for you.
They say that kids really know what they
want to be because they are tuned into
themselves, but we tend to lose that as we
wind our way through adulthood. What
did you want to be when you grew up?
How many of you said radiology administrators when you were seven?
It is important to think about where
and how you want to live while you are still
working. Many people who think that
retirement to the suburbs or rural towns is
appealing find that they don’t like the isola-
tion and dependence on their cars once
they get there. Add to that proximity to
healthcare, and many retirees may actually
prefer to move to cities, often college
towns, where they might find more stimu-
lation and ease of living. If you plan to be a
world traveler, look at where the best air-
ports are. Living out of the way can add to
your travel expenses as well as test your
patience. Now is an excellent time to think
about where to relocate given the real
estate market. Retirement communities in
exotic lands are springing up everywhere,
especially in island habitats for those of you
who want real adventure. Take time to visit
these places while you are still working.