Expanding your Retirement Nest Egg

What can you do?  Are you willing to do it?  For any shortcoming in life, “do-nothing” is generally the least creative, most pointless, of all our options.  Until the question is asked, however, people tend to carry on as usual.  They cannot see whether the future is bleak or beautiful …until we get into these details.  And if we find a shortfall in our retirement funds, acting now gives us time to decide how we’ll commit to our future happiness.

A question in my surveys (and thankyou for your help) this year has been this:  “To secure Savings for Retirement I can . . .”  So pause your reading a moment to ponder three or more ways you could act now or soon, to augment your retirement savings.  If you are truly ambitious you can list twenty or more ways if you like …and then select the top three, or five, that feel best for you now.

Here you and I can consider a few leading areas that you or your peers have contributed, but certainly feel free to add more.

1. "Raise my monthly savings at least 5% immediately."

Nearly 50% of respondents say they could immediately increase their monthly investment to boost retirement savings.  People who own or manage businesses may see less need (or ability?) to select this option now as 42% checked here.  Consider for yourself:  if we’re afraid the future would fall short of our dreams and desires, could we safely set aside 5% of our current spending and put it into our future?  Nearly 50% say “yes”.  *

2. "Boost my savings at least 10% in six to twelve months."

Pic  Printing Money32% give a strong “yes” here, especially among age 50+.  Younger ages have more demands on their income, and less confidence in job security.  Age 50 or more, our mortgage and other debts may have declined, and we know retirement is looming ever nearer.

I confess there’s a secret power in wording this question of 6 or 12 months.  Understanding ourselves as psychological beings, sometimes we don’t want to make a sacrifice today that we’d be willing to make tomorrow.  Like booking a dental check-up we’d rather arrange it six months ahead.  Similarly we can schedule our increased savings-target to begin some months from now.  And you might think, “Oh well the pattern just won’t change then” …but research proves most people (including you and I) can decide today to change a future behaviour …and we’ll succeed in doing so.

In fact a third of us are prepared to commit right now, that we’ll increase our savings at least 10% in six to twelve months.  This should be an active prescription in our financial planning processes, because if an advisor doesn’t catch this, clients will hardly take the action that is needed. Adding this to the agenda for each financial update meeting will help us capture savings to expand &/or hasten retirement goals and abilities. *

3. "Optimize value of selling my business."

This relates of course only to those who can anticipate having a business to sell.  It opens some vital questions we've raised in chapter 2 of A Lifetime Of Wealth.   What kind of businesses can be eligible to sell?  .. What preparations can expand the revenues and multiples of such business to gain a more lucrative exit?  .. What behaviours, roles, and relationships among internal staff and external advisors will advance these objectives .. What are the milestones and goalposts:  what inning or quarter are you in, and when does the game end?   .. If you’re already in overtime, what vital steps can hasten optimizing your value, and prevent sudden firesale or liquidation?

Our survey shows 25% seeing the value of optimizing their business for a lucrative exit.  Are you among the 25% ...or the 75% who don’t yet see how this option could help? And if 82% of business owners over age 50/55 haven’t begun any formalized exit planning, are they by default putting their business valuation at risk?  Discard other peoples’ answers and averages – simply let's consider our own business interests, now and future.  What are you and I willing to do now!

4. "Expecting a good Inheritance." 

Pic _ fan of paper currencyOur surveys reflect a wise or a cautious perspective, with 6% saying they’d include inheritance in their retirement planning.  Despite the forecast $1Trillion wealth-transfer from aging seniors to the baby boomer generation, just 6% of boomers feel this belongs in their financial plan (and just 3% of younger respondents).

Somehow the word is out: older seniors may spend that $1Trillion on personal needs and health-care.  In fact the fastest-growing demographic in our society today is the >85  (even the >100).

Plus we can see that boomers themselves, as a group, have spent too much, borrowed too heavily, and aim to spend their fortunes on personalized lifestyle options (and medical services) over the next twenty to forty years.

If an average inheritance these days may range +/- $80,000 per heir, that’s not a huge fortune.  Of boomers who inherit money, some will spend it instantly, some will pay down debt, and we’re left with the question of how many will actually safeguard life and retirement with this found-money. (Capture the magnificent impact of “family values” in this discussion, chapter 3 in A Lifetime of Wealth.)

5. "Winning a Lottery is my only hope."

14% in my surveys say they’re looking for that coveted lottery windfall to right-side their retirement dreams.  Even 7% of business owners/managers checked here.  Some surveys on the web suggest up to 70% see winnings as a key value for their future.

Not us of course!  You and I know there’s  0% chance of winning.  And then unless we get the riddle of how to keep that money, there’s 100% of losing it.  (See chapter 4, A Lifetime of Wealth on how to sustain winnings and windfalls and avoid losing all!) 

Other insights for NEW OR UN-RETIREMENT.

There are other insights beside the five above.  Some 35% or more say they will work longer in the same or a new career.  Let’s call this New Retirement – or Un-Retirement – a future that you design as freely as possible for yourself (an area of Retirement Lifestyle Coaching).

Re-careering can be full- or part-time; hopefully it pays at least your personal exemption for tax purposes, or enough to cover discretionary travels and interests aside from other revenues paying your fixed expenses.

This can include continued involvement in family business or employee buy-out, participating in preferred-shares &/or reduced portion of common shares.  You'll want to hear Beth’s Story as she moved from selling her own business into devising a new lifestyle for herself, and mentoring a next-gen entrepreneurial venture with her children (see http://guaranteedincome4life.ca/blog/beths-story-sold-business-now-angel/).

With health, good planning, even a little luck, early-retirement earnings of one kind or another can continue to expand our future and delay drawing down our savings.

 * Interesting too, in another survey question, one in five are willing to “cut trips or expenses now to boost retirement savings.”  If we can harness the motivation expressed in 1 and 2 above, we’ll certainly see a happy surprise as our retirement nest egg expands. It doesn’t mean cutting all travels, living on a shoe-string today.  For TODAY is the day we have now, and tomorrow is never certain.  We want to be living vitally rich experiences in every horizon of life, as much today as in our future.  So it’s a balancing act, to enjoy life fully today even as we are willing to commit 5% or 10% extra savings, even arrange a more lucrative business-exit, to enlarge and secure our future.

Pic Live Your LifeEnjoy All This and More!

Congratulations on the thoughts you’ve had as they popped into your mind during this discussion.  I hope you wrote them down.  What are your ideas to increase your financial resources for retirement?  .. How can you migrate or amend your current lifestyle in some big or small manner that gives you more of an activity or experience you want to be enjoying now?  .. If you were to design the movie and step into it …step into your own future, what do you want to be doing? ..how will you be enjoying yourself? ..who is there with you? ..what  resources will we need to secure so you can enjoy all this and more?

Let me know.  Send me note.  Add a comment below.  Let's speak together ....

Brian Weatherdon, MA CFP CLU CPCA CRC, MDRT.   905-637-3500 x 223
627 Guelph Line, Burlington, Ontario. L7R 3M7.   1-877-937-3500 FREE x 223
Ret.Coach SEALCertified Financial Planner.  Certified Retirement Coach.
brian@SovereignWealth.ca 
 

 

2 comments

  1. Brian Weatherdon is a respected advisor to Baby Boomers. This is why I was so honored that he endorsed my book, “In Search of the Baby Boomer Generation,” and wrote a review on Amazon…

    Thank Your Brian for your contribution to the Baby Boomer Generation…Rick Bava–Author of–“In Search of the Baby Boomer Generation,”

    • Delighted Rick, absolutely

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