“VALUE TIME – DON’T KILL IT”

Have you ever asked someone what they have been doing and got this reply:  “Just killing time.’

When you are thinking about retirement, do you think more about the task than about your time?  Do you ever wonder if the task is worth the time investment.  What if you aren’t the one doing it?  Would there be someone else who could do it just as well, and for whom the task would be time better spent?

Time is like gold, and good “spending habits” are essential.  It’s just that in this case the units are minutes, not dollars.

If you don’t know where you time goes–that’s a danger signal.  Maybe you have just been “killing time.”  If you can save small bits of time and consolidate them into a chunk of time that can be spent on something worthwhile–that’s like “found money.”

If you can number your minutes and hours, “numbering your days” will be easier.

At bedtime have you ever thought about something you wanted to do tomorrow?  Maybe it was a problem you wanted to solve.  Many times you try to solve tomorrow’s problems instead of sleeping for much needed rest.  The fact is that you can’t solve the problem until you have “hands on” time the next day, or later.  You may be “just killing time.”

Often times, people spend a great deal of time in retirement planning.  Maybe they have the talent and expertise to develop a plan to reach their retirement goals.  Often their field of experience and expertise is totally unrelated to financial planning.  If that is the case, it would be best to get the most  value for your time…don’t kill it.

Find a professional in retirement planning and rely on him for the knowledge and experience to develop a plan that will achieve your retirement goals.  Place the monkey on his back and spend your time on what you love to do……golfing, hunting, woodworking, etc.

A successful plan is one that has a goal of you retiring and remaining retired.

https://burrows.financial

 

“ANNUAL CHECKUP – HEALTH/RETIREMENT”

Most people become more concerned about their health as they age.  This awareness most often causes them to consider, or at least think about, preventive medicine.  Preventive medicine can be messy.  In a perfect world, we’d require helmets only on motorcyclists who we knew were going to crash.  And we’d only do mammograms on women we knew were going o get breast cancer.  But things are hardly perfect, and when it comes to heart disease–the leading cause of death in our country–early treatment of risk factors is particularly important.

That’s because for too many patients, the first warning that they have coronary artery disease is when the paramedics arrive to pull the proverbial elephant off their chest.  About three out of four patients arriving at hospitals for emergency intervention for a serious heart attack had not been previously diagnosed with heart disease.

CT scans can be used to determine whether arteries are blocked.  It’s not a new test, but it is increasingly being recognized as an important tool in defining which patients are at the highest risk of having a stroke or heart attack.

In that perfect world where no one crashes their motorcycle, and all of us have perfect blood pressure, pristine cholesterol levels, tightly controlled diabetes and never smoke, these risk-factor tools would be meaningless and unnecessarily anxiety provoking.  You’ve done all you can, so why worry?  After all, getting older is a major risk factor, though not reversible, practically speaking.

There is not much difference in waking up at retirement age (hospital emergency room) and discovering you should have considered retirement planning (preventive health checkups) very important to have a financially healthy retirement.

In that perfect world everyone will reach retirement and the goals they set at an earlier age have been met and they can actually remain retired without seeking employment.  In that world social security benefits and retirement savings are sufficient to enjoy your retirement dreams.  There are no CT scans during the accumulation period of your retirement plan to measure the risks you face at retirement.  Unless you are a medical professional qualified to analyze a CT scan, you must rely on professionals.  It is the same in retirement planning.  If you need assistance in planning for retirement, get the help from a financial professional.  The goal of a financial advisor is to assist you in reaching retirement and being able to remain retired.

It is time for your annual health checkup.  Is it also time for your retirement planning checkup?

 

https://burrows.financial

 

 

 

 

“PROBLEMS vs FACTS”

What happens on the road between “planning to retire” and arriving at the destination of  actually “retiring?”

Planning for retirement requires “taking that first step.”  Focus on taking that first step and follow the momentum it provides to begin your journey to retirement.  Two things can be expected in following your plan:  PROBLEMS AND FACTS.

What is the difference between problems and facts?  PROBLEMS are things we can do something about.

FACTS are things we can do nothing about:  Therefore we do well not to worry about them.

We apply energy only to things we can change.  We can feel peace and act with courage, because we no longer beat our heads against an unbreakable wall.

Hopefully, there is motivation when you begin the journey.  Motivation is absolutely necessary.  But “motivation without organization = frustration.”  

I have found that in most cases the strongest plan is the simplest one.  This is a plan that establishes clean lines for the goal and the ground rules to travel the road to success.  It is important to devote sufficient time to “inspect” the vehicle where retirement funds are accumulated rather than concentrating on what you “expect” from the investment.  After all, would you buy a car without inspecting it?  By continuously inspecting where funds are placed, is a great aid in preventing disappointment in the expected outcome at the time of retirement.  Most people don’t have the time nor expertise to continue to inspect your investment in the future.  If this is the case, find someone who is worthy of your trust that can perform that important function for you.  The important part of planning for retirement is making sure that you can stay retired.

The end results of your retirement plan will actually recognize and reward you for your efforts.  This means that you can feel like that recognition and reward says, “a job well done.”

The following are examples of the needs for retirement planning:

• A compelling purpose:  A great commitment to a great cause.
• A clear perspective:  Don’t let fear cloud the view of the future.
• A courageous persistence:  Move ahead despite the odds.

https://burrows.financial

 

 

 

“DOUBLE VISION”

When Moses was preparing Israel to enter the promised land, he had to give them a vision of what it would be like.  Many of the people had not witnessed the miracles in Egypt.  This new generation needed fresh inspiration and a vision for their future.  If they were obedient they would grow healthy and strong, and enjoy great prosperity.  The other vision was the results of disobedience.  From then on, the people could clearly see the blessings of obedience and the curses of disobedience.

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In a sense, planning for retirement is enhanced with double vision.  It’s very similar to the toss of a coin.  There are two sides to the coin…heads and tails.  Quite often people make their choices on retirement planning by tossing a coin.  Maybe “heads” leads to good planning and obedience to that plan and “tails” means no plan and/or depending on a company 401(k), a small IRA, and social security benefits.  “Tails” is not necessarily bad.  It may require all three elements as well as the increase in contributions.  “Heads” may not be the answer if you make a decision and sit on it without making adjustments during the accumulation period.

The vision for how retirement will be if you have a plan must have obedience.  By that, I mean to continually make the necessary adjustments and decisions to make that retirement dream come true.  The end goal is to enjoy the prosperity of your efforts and make sure your retirement funds outlive you.

The vision for how retirement will be without a plan, disobedience, is not so pretty.  It often leads to hardship because you outlive your retirement assets.

One vision requires a lot of work.  The other vision allows you to just coast along through life without a care.  One vision brings prosperity, while the other leads to hardship.

Retirement planning requires decisions and obedience to the plan.  That’s where double vision comes in.  That’s the power of vision from two angles.  Such a vision helps people sort out what they will do, because they can think with the retirement in mind.

https://burrows.financial

 

 

“BEARS AND BULLS”

BEARS AND BULLS…PREPARING FOR THE NEXT RECESSION.

The stock market has experienced a pretty good run the past five years.  The Dow Jones Industrial Average is up 57%.  A bear market occurs approximately every 5 years.  The average decline is 39% with a duration of 1.5 years.  The average time to break even is 5.2 years.

A CHAIN REACTION.  The concern with a bear market during retirement is that your assets could lose value.  If that causes you to tap into your portfolio for income to cover living expenses, you may risk taking valuable cards off the table when the market steadies.

So, what if you are not retired?  It doesn’t affect your current income, but it is a setback in the future growth of your retirement plan.  Maybe you are planning on retiring in 5 or 6 years and are looking forward to another 50 or 60 percent growth and your retirement assets are really going to finance your retirement dreams.  Suddenly there is a 39% downward adjustment in the market.  If history repeats itself, you are looking a five to seven years to get back to where you are today and the future appreciation you were expecting and depending on have vanished.

I don’t know what to expect from the market.  I know that it goes up and it goes down.  In a recent poll 34% of the economists predict that a slowing economy will veer into a recession in 2021, up from 25% in February.  What’s more, another 38% expect it to occur in 2020.  The New York Federal Reserve puts the probability of a recession with a year above 30%.

If your retirement assets are at risk in the market, it may be time to brace yourself and take steps to prepare for the next recession.

If your company 401(k) plan is invested in your employer’s own stock, you may be taking a  big risk.  If the economy weakens and it hurts your company, you could be a two-time loser.  If you lose your job, you don’t want to lose a large chunk of your retirement savings as well.  Explore whether you can roll it over into a qualified plan that will not be affected by market risk.

If you’ve met your health-insurance deductible, it may be the time to get those expensive medical procedure you have been putting off.  Recessions mean sudden layoffs and that means losing benefits.

At some point in our lives, our doctors may need to give us a stress test to determine how physically fit we are.  At some point in our retirement planning it is necessary to give our investment portfolio a stress test.  This may be that time.  It’s great during a bull market.  Every month stocks go up.  You get richer and richer, and you feel smarter and smarter.  In the last two recessions, “smart” investors suddenly felt really dumb when their stocks halved in value.  Rebalance now!  Or, even better, capture your gains and rollover into a plan with no market risk.

Sometimes I believe we are hemorrhaging money.  We have to have this and that and then something else.  Take a look at the costs and expenses that are just our wants and not our needs.  In most cases, we will discover we are really spending our retirement funds now instead of during our retirement years.

Take that money that you are hemorrhaging and shore up your emergency fund.  Be ready for those huge bumps in the road to retirement.  Be prepared for those bumps without having to reach into your retirement funds.

When you reach retirement and begin to live on your savings, hopefully your funds will outlive you.  That should be the goal of every retirement plan and it takes a lot of hard work and wise decisions.

https://burrows.financial

“STEPS TO RETIREMENT – WHICH STEP ARE YOU ON?”

Retirement is a major transition that unfolds over many years, as we move from the life we know into the life we will get to know.  Retirement can trigger feelings of excitement and liberation, but also fear and anxiety.  For many people retirement entails a leap of faith after decades of routine.

Many people experiencing the steps to retirement do not realize how dramatically their lives will change.

Many people are financially able to retire but are not ready to retire because their job is their identity…without work, what and/or who are they?

Some people spend more time planning a vacation than planning retirement.  A vacation is over in a short period of time.  Retirement lasts a lifetime.  It’s very important to think about your identity and what you’re losing, and how you get a new identity.

There are no cookie-cutter, one-size-fits-all solution.  Constructing a framework for your retirement should start at least three to five years before the planned date.  (The accumulation of retirement funds starts years earlier.)

Many pre-retirees do not fully comprehend how dramatically their lives will change.

Perhaps no other stage of life triggers such intense feelings of excitement and liberation.  It can also cause fear and anxiety.

Some people are lucky and know exactly what their retirement looks like, while others must figure it out as they reach their goals.

 

Three years to retirement – anticipation:  After you’re past the imagination stage and its fantasies, hopes and wishes, you reach the anticipation stage.  This is reality.  Money matters, but there’s plenty of guidance for retirees about your financial portfolio; but what about your emotional portfolio.

Being emotionally grounded going into retirement will probably lead to better, more mindful financial decisions in retirement.  Maybe you will be surprised and discover retired life requires less money than you expect.

In the anticipation stage, what are your plans on how you’ll spend your time in retirement.  Retirement is not the end of work but the beginning of a late-career transition.  Identifying goals in retirement and having perseverance in pursuing them leads to better retirement.

 

One year to retirement –  check-in:  What are you going go do the first month after retirement?  What will you be doing six months after you reach retirement?  After you have visited with the grandchildren and have done the traveling, what are you going to do day by day?

 

Year 1 of retirement – liberation:  You made it; you’re free to be…who, exactly?  The initial “honeymoon” period may be exciting when being old is new again.  Often, the loss of structure and routine can cause sadness and depression. 

Learn how to have fun again, to make new friends, to have less structure, to try something and fail at it.  Take a deep breath.  Be resilient and resourceful.  Discover all the opportunities available in liberation.

 

Three years post-retirement – reorientation:  The honeymoon is over and it has been over for a while.  You are a year or so into the reorientation stage of retirement.  You’ve taken twists and turns, and, finally, you are settling in.  Retirement is a reality.

Retirement is a time to reinvent yourself and pursue what you’ve always wanted but never dared to chase.  Instead of finishing the book, add a chapter. 

As the reorientation stage unfolds over a decade or two, start paying attention to your legacy.  This is the reconciliation stage.  It’s not about material wealth you leave in a will; it’s how you will be remembered.  This is an opportunity of a lifetime—the chance to distribute the wealth of knowledge, depth and wisdom you’ve acquired just by being alive.

All these steps required planning and continuously adjusting to circumstances.

 

https://burrows.financial

 

“ARE YOU TOO YOUNG TO THINK ABOUT RETIRING?”

Almost everyone thinks about retiring.  But their thoughts may differ somewhere “between A to Z.”

More people say they want to retire before age 60—IS THAT WISE?  When it comes to retiring—especially if you hope to retire early—look before you leap.

Each person in “thinking” about retirement may have one or more of the following thoughts:

• Retirement is so far in the future that there’s no need to act now.  There’s still plenty of time.  After all, I’m only ______years old.
• I don’t need to start saving now.  I can play “catch-up” when I am 50.  The government allows me to save more in both the employer plans and IRA’s, so it must be OK to wait.
• I can ignore all the retirement planning tools available because they are too complicated or just too time consuming.
• I am healthy so I can work until age 75 or beyond.
• I am enjoying “living for today,” so it’s okay to accumulate debt right up to the day I plan on retiring.
• I can invest in individual stocks of my choosing.  I can do as good as the retirement plan offered at work.  I’ll just close my eyes and pick three options that sound best.
• I don’t need to contribute to my 401(k), because right now there are so many better uses for cash.  Or, maybe I will contribute what I can spare and not worry about the level where I can earn the full employer match.
• I’ve been waiting so long to buy that boat or RV.  I deserve it.  It’s so easy to get a  401(k) loan.
• I’ll take my Social Security at age 62, needed or not.  It’s my money and I’ll grab it when I can.
• I will make sure all my savings are in tax-favored plans.  It doesn’t matter that they aren’t easily accessible in case of an emergency.  I can’t be worried about the income taxes and potential tax penalties.
• I can cancel my long-term-care policy I’ve had for years.  I haven’t needed it so far, and I probably never will.  I have other plans for that premium.
• I have heard people talk about the power of compounding and/or triple compounding, but that’s just a lot of gobbledygook.
• If there’s a big drop in the stock market, I’ll just shift into bonds.  There’s no point sitting around and losing everything.
• I don’t need to worry about inflation after I retire.  It’s been low for years and no doubt it will stay that way.  Besides, I won’t be spending at today’s level after I retire.

These are only a few of the things to consider as you think and plan on retiring.  It is never too soon to start planning or too late to make adjustments to address a change in goals and circumstances.

Have a great day and plan on doing some planning!

http://www.burrows.financial

 

“LOOKING BACK vs. LOOKING FORWARD”

It would be nice and comforting to look back and expect the future to achieve the same results.  The past may have included many easy times and much joy…there also may have been hard times and much sadness.  Maybe you want a repeat of the past or never going through those times again.  History may repeat itself, but that may lead to failure or success.

Looking back allows us to see wrong decisions and make corrections that will affect our looking forward planning.

If you are like most people, you have been thinking of retirement since you started your first job.  Thinking about retiring and planning to retirement are two very different things.  If you have only been thinking about retirement, you have probably only looked forward to the golden years and believing Social Security Benefits will be enough.  Social Security was only aimed at providing supplemental retirement income.

So, let’s now look back.  Many people have qualified retirement plans such as 401-Ks and IRAs.  The majority of these plans have been invested in the stock market and, though their investments have been at risk to market volatility, have realized great returns.  Others have in various non-qualified plans to supplement their retirement income.  Stocks have returned a glorious 7% annually over the past century (total return, net of inflation).  Continuing on the same course, they’d deliver very comfortable golden years to you.  But they won’t do that.  The stock market is now poised to deliver not even half its historical return.  Estimated future returns of approximately 3% annually over the next several decades will be quite disappointing.  Price/Earnings Ratios are double what the historical averages have been and could result in a substantial downward adjustment in the market.  If that occurs, retirement plans may fall short of providing for your retirement income.  The mathematics is quite simple:  if you planned on withdrawing 4% (annually) of your nest egg and the return is down go 3%, the principal will begin shrink.

This is bad news for retirees and future retirees.  If you are still working, plan on working longer and saving more of your paycheck.  If you’re retired, live frugally, and consider returning to work.

It is easy to read the historical looking back, but looking forward requires expertise in developing a retirement plan that manages principle risk and the flexibility to make adjustments during the accumulation period as you take aim at the future years of retirement.  The bumps in the road are continuous as you continue looking forward.

Visit my website and complete the “Contact Form.”        http://www.burrows.financial

“Retirement: Spending vs. Saving”

Many people are focused on enjoying the fruits of their labor in the “here and now.”  As you spend time in the workforce, you earn more as you age and begin to enjoy the “things” your income can provide.  It is very tempting to take the attitude of enjoying today and letting tomorrow take care of itself.

It is never too early or too late to sacrifice some of the current “wants” and “pleasures” to begin making a commitment to provide for the needs of retirement.  Why do we have to do without current “things” while we are healthy, and can’t really afford it and also save for the future?  Why do we save for retirement to do the things that give us pleasure when we can afford it and may not be healthy enough to enjoy them.

In general, people are good at what they do to earn a living and provide for those who are dependent on them.  They are good at what they do because of education, experience, and commitment.  These qualities may or may not be adequate for retirement planning.  People may believe a financial advisor is too costly for their budget.  But, they may be surprised that the cost, if any, is well worth it.  Why gamble on risking your retirement funds if you are not experienced in these matters?  Find an advisor with the experience and “know how” to take the pressure off your decisions about investing in your retirement.

*****

I have believed for a number of years that the stock market has been “overpriced.”  Stocks have sold above historical Price/Earning ratios.  Many economics have believed it possible there would be a 40% downward adjustment in the market.  This would be a disaster for retirement funds invested in the market.

I recently heard a discussion concerning the current market risk.  The past two presidential administrations have experienced flat or small growth of GDP.  The current administration is experiencing over a 3% growth in GDP.  If the prior administrations had experienced a 3% growth in GDP, there would be a huge gap between the current GDP and where is should have been (historically).  Therefore, it appears there would be support for a sustained increase in equities based on current conditions and the increased income to support equity prices.

If your retirement assets are invested in the market, should you continue to be at risk for a downward market adjustment?  Or should you capture your gains and place them in risk-free investments?

Maybe it is time to investment in a product where you can benefit from the gains in the market and not share in the losses.  If the market continues to grow at historical levels, you share in that growth.  If the market has a dramatic downward adjustment, you don’t share in that loss and your investment is not at risk.

Visit my website at:  https://burrows.financial

Complete the “Contact” form and I will contact you.  Or you can call me at:  409-382-0158

 

 

 

 

“ARE YOU ENJOYING YOUR RETIREMENT NOW? – (INSTEAD OF LATER)”

After many years of observing people planning on retiring as well as people who are already enjoying retirement.  Many people are enjoying their retirement funds now, but the problem is they are still working.  If you are a golfer, do you want to spend the funds you will need to supplement your IRA, 401K, and/or Social Security Benefits?  Instead of playing golf as much as you can now and using some of the funds will need for retirement, reduce your golf time now and be able to look forward to being able to afford playing during your retirement years.  Your will enjoy retirement more if you are able to afford the cost of playing golf.

Maybe your are not a golfer.  There are other hobbies or pursuits that need the same considerations.  Your may enjoy fishing, traveling, sports events, or other pursuits, but the same principle applies.  DON’T DO IT ALL NOW AND NOT BE ABLE TO DO  ANY OF IT DURING RETIREMENT.

Many people today fall into the “spending” class rather than the “saving” class.  We all like to have what we want NOW and not worry about all the tomorrows to come.  My hobby is woodworking, creating bowls and furniture that will give pleasure to family and friends.  I would not be happy if I were told it would not be possible for me to continue this endeavor…I couldn’t afford it.

Often, many are enjoying the things that bring pleasure now with funds that could be invested in before tax IRAs and 401-Ks as well as investments funded with after tax dollars.  You may not enjoy your hobbies as much today, but it will bring you much pleasure during retirement.

An illustration of what I am writing about is Scripture about the “prodigal son.”  He wanted his inheritance (retirement) now.  His father gave it to him and he spent the entire amount enjoying himself.  When he had spent his inheritance, he ended up living and eating with the swine…not a good way to spend retirement.  He ended up returning home to his father for his support, much like depending on the  government for total support.  More than likely, he didn’t get to enjoy the pursuits he wasted his inheritance…he was “retired” with no funds available for his enjoyment.

If this describes you, visit me at my website.  Complete the “Contact” form and discover how Burrows Financial can be of assistance.

http://www.burrows.financial

Have a great day!