By Dennis Miller
I have a friend who says, “Why make a decision today if it can be put off until tomorrow?”
While that might sound cute, waiting until the transmission on your car is totally broken and having the vehicle towed to a dealer for a trade-in certainly isn’t the optimal way to negotiate the price of a new vehicle. You can’t drive around and shop at other dealers to get a decent price.
Unfortunately, this is the way he has lived his life. The more difficult the decision is financially or emotionally, the longer he drags his feet. What he has yet to understand is that doing nothing is also a decision and can turn out to be very, very expensive.
If you don’t want to follow in my friend’s footsteps, I have three suggestions:
1. When you see storm clouds on the investment horizon, don’t ignore them and hope they will go away. Ask any Floridian who has walked outside during the calm of the eye of a hurricane, and they will tell you it is quite peaceful, yet the storm clouds are clearly in sight. In a matter of minutes it can go from calm to absolutely terrifying, since the strongest winds are closest to the eye.
2. Many decisions in life are difficult both financially and emotionally. I have come to believe one is better off by “fighting the panic and trying to draw a realistic perspective.”
3. There is an old saying, “When the student is ready to learn, the teacher shall appear.” It is unrealistic to think that when we see there is a problem (certainly protecting our life savings would fall into that category), we should immediately have all the answers. Seek help from folks who may have been down the road before you. Don’t be shy about contacting a number of people you respect. You will likely find – as I did – that many folks are glad to share their knowledge. I learned a lot, I was ready to listen, and indeed, more than one teacher magically appeared.
The biggest challenge faced by retirees and those soon to retire is how to generate income during retirement. It’s not like we can work extra hours or ask the boss for a raise. And given that the Fed is committed to near-zero interest rates until at least 2015 and our three most recent COLAs for Social Security were 0%, 0%, and 1.7% we’re not getting a raise any time soon. So the question you have to address right now is, “how are you going to produce enough income during retirement so that you don’t have to draw down your savings and potentially live out your final years poor and reliant on someone else?” You may have your own plan, but if you don’t then I suggest you get a copy of my Money Every Month income plan. You can get a free copy here.