Now that you have established your OWN “default buttons,” it is time to use them to achieve your goals. Let’s start by establishing goals. Setting very specific goals is vital. They must be specific in nature and economics. When you create a specific goal, your mind will take over and provide the methodology to attain it. Adding economic goals will help bring it to reality – like when you save every month to attain it. A wise businessman told me, “if you can’t measure it, you can’t manage it. If you can’t manage it, you can’t monetize it. If you can’t monetize it, you can’t give it momentum.”
Always remember the 4 Ms.
Setting goals is a different process for everyone. We’re each at different stages in our lives, where we need and want different things.
Young people might want to save to purchase a house or save for their children’s futures.
Mid-life people might want to save for “Post-Earned-Income Life” (notice we did not call it retirement) while planning for a larger house AND continue to plan a future for their children.
Mature life people are still planning that Post-Earned-Income Life while planning for extended care.
Senior people are planning a Legacy.
Some of these goals need to be explained:
How do you save for your child’s future? Most people take the societal default of a 529 Plan. The 529 plan is great for the traditional college path. But what if your child does not go to college? Or they have a full ride scholarship? What if you have all their money in a 529 Plan, and they want to buy a house or start a business? It’s a very expensive “tax gate” to get the money out of the 529, so weigh your options. Alternatives include using an "after-tax account" by using a tax-managed investment portfolio. You would have some current income taxation, but you would not be creating the income tax and penalty gate on the back end created by the 529 account.
What is “Post-Earned-Income Life?” I believe the days of the traditional retirement are behind us. I believe it will be a managed transition from the career that earns you the wealth to live your life and attain your goals, to a career of what you want to do
When I started advising over 40 years ago we planned for a person to retire at age 65 and pass away in their mid 70's. Most of these clients had a pension, social security, a paid off house, and some money in the bank. Any extended care issues assumed to fall on the children. Today, many want to retire earlier than age 65. They do not have a pension, social security is moving their normal retirement date out, and the children live far away.
Many of the health issues that shortened the lives of clients in the 1970s have been made treatable. People have also become more aware of the value of a healthy lifestyle. So, the need to supplement income has come earlier and must last later. With the financial need/want, healthier lifestyles and technological abilities allow for second careers.
Are you prepared to live this long? Better yet, are you prepared to live this long AND make the most of this time? Protect your health today, and enjoy your wealth tomorrow.
Remember, customizing your default buttons can help you accomplish these goals.
Extended care is a subject we will tackle in the next blog.
All this may sound like a major task. Yes, but our team can help.
We are “agitators” to keep you on task.
We are “aggregators” to get you the products and services you need/want.
We are “accelerating” to help you grow exponentially.