5 Retirement Lessons for 2024, Ep #168

2024 has already been full of many in-depth conversations with current and prospective clients. There have been some common threads among most of those conversations. From those common threads, I’ve pulled five lessons that we can all learn and benefit from when planning for retirement. Listen to this episode of Retirement Made Easy to learn what they are!

You will want to hear this episode if you are interested in…

  • [2:41] Lesson #1: Be careful who you get advice from
  • [8:42] Lesson #2: Invest in line with your risk tolerance
  • [12:29] Lesson #3: Make sure you have the details right
  • [16:18] Lesson #4: Don’t be overconfident
  • [18:50] Lesson #5: Always ask, “What am I missing?” 

Lesson #1: Be careful who you get advice from

I had a conversation with someone saving a down payment for a second home. He was using his whole life insurance policy to save. He’d asked a wealthy man from church what he should do and that was his advice. This man told him he could make withdrawals tax-free. 

Why is this a bad idea? The fees and costs are front-loaded. So if you need to access the money, you’ll be hit with those fees. The interest doesn’t come into play until later on in the life of the policy. This man was under 59 ½, so he’d also get hit with the 10% penalty for withdrawing money from it. 

Lesson #2: Invest in line with your risk tolerance

If you’re at the point in your life where you don’t want to take the risk you took when you were younger, that’s okay. Younger people can recover from the ups and downs in the market. If your risk score is higher or lower, you’ll be okay. But you need to know what your risk score is. From 0-100—zero being conservative and 100 being aggressive—where do you fall on the scale?

Can you handle volatility? We need to compare that to your investment portfolio to make sure it matches. Get a risk assessment done to make sure you’re invested in line with your risk tolerance.

Lesson #3: Make sure you have the details right

We’ve had several occasions where people thought something worked one way and it wasn’t the case. Their retirement success was hanging on an assumption. When people have believed something for so long, they have a hard time believing you when you say they’re wrong. 

This year, this issue has come up regarding pensions, stock options, and complex investments like annuities and private non-traded REITs. Most people were in shock when we explained how things really worked. 

If your retirement hinges on information you’ve gotten wrong, it’s a huge problem. It’s what we know that just ain’t so that gets us in trouble. 

Lesson #4: Don’t be overconfident

What else have I learned from 2024? Don’t be overconfident. As much as you think you have things figured out, things will go wrong. Take a step back and question, “Where could I be wrong?”

I spoke with a couple where the husband was adamant that he’d work part-time for the first five years of retirement. Why? Because the job would cover health insurance until they turned 65. But what if that employer lays people off? Where would the money come from? 

He realized he couldn’t bank the success of his retirement plan on something that wasn’t guaranteed. 

Lesson #5: Always ask, “What am I missing?” 

If I go on a trip, I always forget something. I’ve even driven six hours to go to a wedding with the couple’s gift sitting on my kitchen counter. 

It’s no wonder that people forget about the accounts and insurance policies they have. Those things can play a big part in your financial future. We’ve had a few prospective clients with some missing pieces. The things we forget to plan for can become huge gaps in our retirement plan. 

Always ask, “What am I missing? What did I forget? What may come back to bite us?” Sometimes It takes an unbiased third party to help you realize what you’re missing. 

 

Resources & People Mentioned

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Connect With Gregg Gonzalez

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