How to Have a Proactive Retirement Plan
Updated on Oct 15 2019
Ted Jenkin, ranked the #4 Financial Advisor in the U.S. by Investopedia, took some time to chat with us to discuss the importance of saving income, investing wisely and preparing for retirement.
It’s no joke that America is not prepared for retirement. Emotional spending is rampant in our consumerist and social-media-driven culture, and sadly many seniors are relying on Social Security to get them through retirement.
Many people are living longer in the 21st century with technology and healthcare advances and a meager savings is not enough income to sustain a happy day-to-day retirement lifestyle.
Ted Jenkin, founder and CEO of oXYGen Financial, comments:
“People are unequivocally not saving enough for their futures. They succumb to lifestyle inflation, which means – in theory – that their income expands. The problem is that expenses have a tendency to expand for more luxurious lifestyles as they make more money. One of the main culprits is social media, as there is peer pressure and images of luxurious vacations, gourmet dining, fashion and remodels that encourage people to spend more money.”
Preparing for a Successful Retirement
Many Americans have a large emotional response to the “fear of missing out.” The digital age and social media have changed life for many seniors as they have never had instant access to others’ lives on that scale and the issue is that social media is a facade.
“When was the last time you saw images of people saving money and living conservatively on Facebook or Instagram? You don’t as that’s not what people post and it’s feeding the consumerist culture,” notes Jenkin.
He’s right; people tend to post the vacations and life’s extravagances, rather than cutting coupons or bragging about being frugal. In fact, Jenkins is working on rewiring that emotional response to get people to be proactive with their retirement planning and in the mindset of thinking about recreating a paycheck for retirement. One of the key ways to do this is to save strategically and invest in a balanced portfolio with the help of an expert financial advisor who can help you create an investment time horizon that works for your unique situation.
A philosophy Jenkin uses with clients is to create investments that act as a pension plan. He notes, “Find investments that will recreate your paycheck, whether using real estate, etc… There’s no substitute for this type of investment because, when the market goes up or down, you have a dependable chunk of income. This way you have a guaranteed monthly income to subsidize other assets.”
‘Recreate’ a Paycheck to Live Off Your Retirement Income in Advance
Testing to see if you can live off $50 or $100K for a given period of time will determine whether your retirement income projections were right and whether you’re really ready for retirement.
“For people who are approaching the ‘end zone’ of retirement,” Jenkin discusses, “it’s important to act ‘as-if’ you are living in retirement financially a year or so before retiring. If you need ‘x’ amount of money for retirement, you need to experiment to see if your lifestyle lends itself to that income and spending. Verifying that lifestyle isn’t a hypothetical, but rather a reality is telltale.”
Many seniors are actually worried about overspending and running out of money in retirement, so they’re not enjoying their retirement. “There’s a major psychological shift when it comes time to burn your capital. You’ve saved all this money and now you’re miserable because you don’t know how to spend it. There’s a balance of emotionally being able to stop spending money, but also being secure enough to spend money to enjoy life.”
Practicing for retirement before retirement hits is not only a wise financial move, but also an important emotional move as you’re mentally preparing yourself for the shift in living. Educating and empowering yourself about your financial future can give you peace of mind that you’re really ready to take the hurdle.
Create a Retirement Lifestyle That Keeps You Engaged and Happy
Retirement is more than having free time or a break from your nine-to-five gig. A happy retirement is creating a nest egg you can depend on that will enable you to have the adventures you’ve dreamed as well as maintain purpose and engagement in life.
According to Jenkin, it’s recreating a daily lifestyle that makes you happy. “It has been my experience that even if you quit your day-job, those people who have a side-business or hustle or stay engaged in the community through volunteer or charity work, are the ones who really reap the rewards of retirement.“
It’s no secret that engaged brains live longer. You have to stay active mentally and physically and set yourself up for retirement success with strategic financial planning and goal-setting. Many seniors today are actually committing suicide as they are so unhappy with the monotony of retirement life with no money or stimulation.
“If you’re only living off Social Security, it’s a drab situation,” notes Jenkin. “Retirees are just starting to get engaged in social media and the image that people are ‘doing better’ is taking a toll. Emotions and feelings of inadequacy affect people at every age, which is why it’s so important to prepare for your golden years as much as possible.”
Recreating a daily routine you enjoy is important. Educating yourself is the first step to a successful retirement is part of the process and a professional financial advisor can help take the stress out of everyday financial decisions will help you breathe easier about your financial future.
Jenkin says it perfectly:
“The biggest thing beyond the money is having a plan on how you’re going to stay active. Whether you have $400,000 or $5M, the idea of retirement is to enjoy it all. To do this, you have to be proactive.”
About Ted Jenkin
Ted Jenkin is the founder and CEO of oXYGen Financial, a financial services company based in Atlanta which now manages more than 1.2 billion in assets under management (www.oxygenfinancial.net). He is the weekend personal finance expert for CNN Headline News and a featured guest writer for the Wall Street Journal and CNBC. Ted has six advanced designations from the College for Financial Planning. He lives in Milton, GA with his wife Genna and their three kids.
A successful retirement takes planning, not guessing. If you haven’t been proactive with your retirement planning, here are three key ways you can recover so that you don’t need to worry about your financial future.
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