Retirement: Dreaming Is Okay, But Realistic Planning Is Better

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Retirement: Dream It, Plan It

Retirement: Dream It, Plan It

By: Tammy Kraig, CFP®

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We’re all aware of inspiring adages such as, “Follow your dreams and the money will follow,” or, “Anything you can imagine, you can do,” or, “Reach for the highest star.” While it is important to have hope and inspiration to achieve as much as you can, a problem may arise if dreaming of achieving distant goals becomes a form of avoidance and procrastination.  Yes, you still can write that novel that Hollywood will buy for an insane amount of money.  And, yes, you can still start that website that generates millions.  Keep working at it, but also make sure you also have a realistic view  – and plan – for your future.

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Some experts in aging find that many people fear aging and retirement.  This is normal, but it causes people to avoid planning for their old age.  According to Laura L. Carstensen, PhD, the director of Stanford University’s Longevity Center, “People’s conceptions of old age are so bleak, so disappointing, so dull and dreaded, that either they don’t plan or they plan for an imagined future self as if that person were a stranger sitting somewhere in a hallway in a wheelchair.”

Because people envision such a frightening retirement picture, they end up ignoring the whole thing or pretending their dream will suddenly be achieved and rescue them.  Thus, they end up facilitating their worse nightmare.


What is the biggest mistake you can make when it comes to retirement?

Not planning realistically.

People are living longer.  On average, a 65-year old woman  has 23 years to live; a 65-year old man has 20 years, according to the Society of Actuaries. To succeed in the transition from work to retirement, it is critical to imagine your future life as realistically as possible.  What is it you really want to do?  Perhaps it is travel, or moving to a warmer clime or closer to your grandchildren.  Perhaps you dream of a second career.  Whatever your future is, give yourself the time to envision it and own it.  Once your mind is clear about your future self, you can realistically plan the steps needed to get there and take control of your future.

If there is not enough time to realistically achieve your dream, face the facts and plan for the future you can attain.  In general, according to Carstensen, “People have a really difficult time with ambiquity.  What if I go broke?  What if I never find my soul mate? … What if, what if.”

However, once bad things happen to people, they are usually pretty good at adapting.  So once we can imagine our realistic future, it is easier to begin the planning process, which can help dispel our natural fears of the unknown.  Carstensen says the key is taking the first step, and her advice is to, “Set up an appointment with a financial professional, and tell yourself: ‘I’m not going to leave that session until I have a discussion and come up with a plan.’”

Once you have a clear path to your future, the odds of achieving it go up dramatically.  That’s not so scary, is it?

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Tammy Kraig is a Certified Financial Planner™ professional licensed with a registered investment adviser that provides personal financial advice online for a fee. She specializes in working with couples to help them identify and work toward their investment and retirement goals, long term or short. Contact Tammy for help with virtually any financial need.

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