What is your financial strategy?

I recently learned of a website that appears to be helpful for those trying to save for retirement or other goals or to get out of debt. Choose to Save is fairly basic, but some of the tools and links are helpful. I took the Retirement Personality quiz. The decisions we make about our finances are rooted in our personalities. If nothing else, this quiz is an eye-opener to how other people deal with decisions affecting the future. It might be a wake-up call to those whose savings “plan” is to put aside what is left each month, which unfortunately is usually nothing. Lots of people in denial as to spending and savings habits.

 

The main point of course is that without any strategy or plan, you are unlikely to reach a satisfactory retirement. Do you feel that your situation is hopeless so why bother? If you do not take any active steps to prepare for retirement, then you will probably not fare very well. It is wishful thinking to count on never losing your employment or thinking you will always be healthy enough to work in later life. You need to take steps now to position yourself for retirement whether that is paying down debt or figuring out likely expenses (there is a calculator on the site) so you can figure out how to live within your means.

 

I do believe the professional financial planning community and brokerages, etc. mostly give advice to sell products or earn commissions or annual fees. However, if you are within reach of soon-retirement, you do need to figure out what your basic expenses might be and how they match your projected income. This site will help.

 

We retired in 2007. Individual medical insurance has eaten up large amounts of cash, but even so we have lived modestly and not really dipped into our IRAs for living expenses. That is fortunate considering that our investments like most people’s retirement investments took a hit when the recession arrived and the stock market fell. And of course one earns peanuts on non-retirement savings as well. Still, God has provided for us and though we may not travel as much as we would like or purchased the pick-up truck my husband covets <smile>, we were able to use some equity from our house to move into a retirement community and buy some new furnishings. We did visit a financial planner in December 2008 for a one-time evaluation. She suggested funds that might be more appropriate to our investment horizon and risk comfort. We did the adjustments ourselves rather than pay her a fee for that service. Being rather frugal, paying a percentage of our funds each year for management just doesn’t sit well. I am also transitioning into low-cost mutual funds such as index funds. We try hard to utilize our savings in an efficient manner by reading resources relevant to our situation. Choose to Save is one such site. You might also find Scott Burn's articles interesting. Just don’t float along without giving thought to your future.