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November 30, 2007 at 07:00 PM
“Resolve to perform what you ought; perform without fail what you resolve.” – Benjamin Franklin
As we transition into a new year, many advisors and our clients will make emotionally envisioned New Year’s resolutions to do two things: lose weight and save more money.
For most, however, their new-found dietary and financial discipline will begin to drift off around the middle of January when they give up on these difficult tasks. When reality settles in it becomes easier to subconsciously admit defeat and settle back into old, comfortable routines. You see, the problem with New Year’s resolutions is that they are usually made quite arbitrarily. When made without much analysis or vision, they include lofty and unrealistic short-term goals leading to despair.
Unfortunately, there are a lot of parallels between New Year?? 1/2 s resolutions and the way many seniors, especially baby boomers, are approaching retirement planning. And while December, with all of its associated holiday parties and feasts, may be the worst time to get started on dietary resolutions, it is the perfect time for us to help our clients establish better financial resolutions.
Many seniors have postponed planning, let alone actually saving for retirement. Surprisingly, many believe that we have no-risk fixes that will help them quickly make up for years of lost time. We know that is a dream that is unlikely to come true. Our job is to help our clients face facts, because their imaginary math doesn’t work in real life. Together -advisor and client- we need to weave financial psychology and the math of what our products do into their current financial situation. Finally, we need to provide them with realistic advice to motivate clients to live within their financial means today while saving at a rate consistent with their age.
