Holland Column

Retirement & Financial Planning

Top 10 Mistakes When Planning for Retirement
#10 No Plan for Retirement

We’ve come to the last “Mistake” in my 10-part series. You’d probably expect it to be difficult for me to offer a succinct explanation for why you should take the time to plan your retirement. Given the subject’s complexity and my tendency to over articulate (just ask my wife), I would understand your skepticism. Actually, I can give you all the reasons you need to build a plan in just two words: financial independence. Period. That’s it!

Cheap, well-run mutual funds could be a step in the right direction. Not giving money you might need to your kids, that, too, would be prudent. Planning ahead for long-term care is another smart move. Adjusting for future inflation, getting better interest on your money, reducing portfolio risk through diversification, avoiding dollar-cost-ravaging, and putting some of your money in a safe place – as we’ve seen in previous columns – these are all essential to your own version of financial independence.

Just as a conductor directs an orchestra, a financial plan can serve to coordinate the different parts of your finances so they harmonize to produce a beautiful “symphony” of lifetime income. A well-conceived plan can help you to:

  1. Avoid the threats that could drain finances and crush retirement dreams;
  2. Get the income you need from financial assets during your lifetime;
  3. Efficiently leave any remaining assets to your heirs and beneficiaries.

You can build a financial plan in more than one way, including doing it yourself. While it may seem self-serving, I recommend hiring an adviser to help. An experienced professional can be aware of products and strategies that get the work done more efficiently. About a year ago, I decided to re-paint a bathroom in my house. I stopped halfway. The paint didn’t look as good as the sample. It didn’t go on evenly. It was taking way too long. It was a mess. The bathroom remained half-finished for six months until my wife (thankfully) ran out of patience and hired a handyman. He had it painted beautifully in a just few hours. I was glad to pay him for his expertise, and I’ve hired him for several other projects since then.

With the completion of this series, I will leave you with these two questions: “Is financial independence important to you?” And if so, “How do you want to tackle one of the most important projects in your life?”


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