Friday, January 7, 2011

5 Ways to Mess Up Your Retirement Plan

Like most people, thoughts of retirement cross your mind every time you dread going to work. Sitting on a sandy beach, looking out at the surf, without a care in the world, is my retirement dream. Maybe it's yours. It's not going to happen for me.

According to statistics, only 25% of baby boomers are able to make that dream come true. I'm not in that 25%. That 25% have assets and savings lined up to live the dream. Even though the boomers have decent assets, they're not enough. The result is, there will be some full or part time working occurring well into their retirement.

You may ask how I got into the statistic of the 75% of who aren't ready or able to retire someday. It' was easy, I just followed these simple rules:

  1. Don't be on a budget. Spend all the money you earn.
  2. Don't save your money in Mutual Funds, IRAs, 401ks, or investments of any kind.
  3. Don't live on what you make. Use credit cards irresponsibly. Run up their balances and only pay the minimum.
  4. Don't have a car you can afford. Buy, lease, or rent an expensive car. Have a payment until you old and gray.
  5. Don't live in a house that's affordable. Buy a house where the payments are half your monthly income.

If you follow these five rules you will be on your way to financial ruin in no time. These things, if done correctly, will keep you poor, your whole life. I will attest to the fact that the rules do work. Because I have done them all.

For me I'll be working well into the future. My investments are meager at most. Social security is not enough and can we really count on it in to days atmosphere, forget about it in 20 years.

What does the future hold for me? When I reached 65, I was going to sell the house and downsize. My original plan was to count on the house value appreciating, so when I sold it, I would have enough cash to generate an income and a comfortable life. That's out the window.

My plan 'B' is to keep working. My business generates a good income. A lot of the work is done by me. As I get older and can't do as much, I would hire more help. That plan would work well. I would be able to work well into my 80's. It's hard to imagine myself that old.

Trying to plan events over the next 25 years is presumptuous at best. Planning ones future with a wife and 6 childrens' needs can be hazardous. Financially, even in a bad economy, I'm still heading in a positive direction. Things can completely change in the next 5 to 10 years and I still may be able to make it to that beach. I'm exploring new directions to increase business, who knows where they may lead.

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  1. Only 5 ways? There are hundreds! :-)

  2. There are definitely a lot of ways you can mess up. It all comes down to planning in the end. If you have a plan and stick to it, you should be ok. If you are looking for some advice to get going on that plan, try At least it's better than not planning at all.


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