Introduction

You’ve worked a full-time job for thirty to forty years, and you’re used to getting a regular paycheck. At this point, you probably operate on professional autopilot. Much of your time is accounted for. You work at least forty hours a week—it’s your routine. You’ve grown used to it.

All of that is about to change. Retirement is approaching, and soon those regular paychecks will stop showing up in your mailbox or bank account. Your sense of financial security may well be challenged. The transition can be dramatic and, if you’re unprepared, extremely difficult.

Or maybe you’ve already retired, and you’re in the midst of making the adjustment to this new phase of your life. You’re looking for someone to help you on the journey.

The truth is most people start their retirement planning with little to no assets or investments. Throughout their careers, hopefully they’ve lived within their means, made prudent financial decisions, and tried to save. Now the reality is hitting them that they need to create a new source of income for their retirement years. It’s not enough to merely save and accumulate money; they have to become more thoughtful investors as they will soon be in the distribution phase of their investing lifetimes. They’re going to live off that money for the rest of their lives.

It can be difficult for people to wrap their minds around this change. This is why it’s so important to put a solid plan in place to successfully navigate the transition. There may be many ways to be successful, and you might be able to achieve it in some other way. The plan I share with you in this book has worked for my clients over the years.

Time Is Running Out

A good portion of the clients I’ve worked with have been career engineers. In fact, engineers or employees of engineering firms make up approximately 60 percent of all the clients at my firm Keen Wealth Advisors. They come to us for advice because they are planners by nature. They understand that it takes years of thinking, planning, and preparing to even begin to get a big project off the ground.

They also have vast expertise in their fields, so they understand what it means to be specialists. They are fully aware that when it comes to retirement planning, they know what they don’t know, and they’re willing to seek advice.

As retirement approaches, they’ve begun to realize just how different life is going to be, and they have a limited amount of time to ensure that everything is lined up correctly to prepare for it. In fact, they only have one chance with the resources they have accumulated, so they can’t afford to make any major mistakes. Realizing this, they look for specialized help, so they can get it right.

Time is a priceless commodity, and, not to be morbid, there’s an end date for each of us. The years go by increasingly fast, so we shouldn’t wait to get our affairs in order. Beyond retirement, you want to ensure that your spouse or children are taken care of, that they won’t be taken advantage of by an unscrupulous advisor, broker, or salesperson—or even a scam artist or disingenuous future spouse—when you’re gone.

Trying to navigate all the complexities of tax law, estate planning, investment rules, and finances on your own, along with all the emotions involved, can become a full-time job, yet the whole point of retirement is to not have to work so hard anymore. You need to put a plan in place that allows you to delegate this work.

Avoiding Emotional Mistakes

When you’re first starting out in your career and trying to build wealth, it’s easy to make bad investment decisions, especially when you have a limited perspective on the markets and economy. Maybe you’ve learned some hard lessons along the way, but with retirement drawing near, you can no longer afford to make major mistakes.

The news media loves to announce that the world’s coming to an end anytime the market is off by a few points in a day. Investors who lack the training or coaching to put this volatility into perspective are prone to make emotional decisions about their investments that can prove to be catastrophic. The most common emotional mistake people make is to sell their investments at a bottom in the market. Another mistake is to over-invest in the latest fad.

Often, when the market goes through a correction and experiences a downturn, people feel scared and get out of the market entirely. Then they find themselves sitting out while the market rebounds by 30, 50, 100, 200 percent or much more. I’ve spoken to individuals who got out of the market in 2009 and never got back in. Meanwhile, the market has rebounded by over 380 percent from March 2009 through March 2019 with dividends reinvested since the recession, and in these cases, they have cost themselves seven figures.1 That’s the damage an emotional decision can make to your long-term financial well-being.

Other times, people see a news story promoting some stock or industry, and they believe the hype. They buy in heavily without understanding how the specific investment fits into their financial plan. It’s a spur-of-the-moment decision, and it can cost them a lot.

You can’t afford to make these kinds of mistakes at this stage in your life. You need someone who can see around the corners, helping you develop a disciplined process that will ideally help you take advantage of market volatility while keeping you smartly allocated.

You’re going to be somewhere financially during your journey in retirement. The question is, will your journey be with discernment and intentionality, or will it be random?

Putting a Plan in Place

When we talk about making a financial plan, we’re talking about creating a living, breathing roadmap that deals with every component of your retirement, taking into account all spending needs, rules and regulations, Social Security, wills and trusts, healthcare, and taxes.

The engine to that plan is the investments you make in accordance with your individual considerations, bearing in mind what those investments need to produce for you and your family in the form of income and growth over time—coupled with your tolerance for risk and volatility.

Rough times are inevitable, and there will be turbulence along the way. You will deal with illness, market corrections and disturbances, possibly job loss or other unfortunate events. As they say, when it rains, it pours, so you need a plan that will help you weather these challenges. You don’t want to find yourself scrambling or responding emotionally. With a plan in place, you can sit back calmly and say, “Here are the things I’ve already committed myself to, and here are the goals I know I want to achieve. I don’t have to let this current problem derail my thinking. My advisory team has my plan and is looking out for me.”

We see so much anxiety in people as retirement approaches—a fear of uncertainty, a concern about the unknown—but once clients have a plan in place, it’s amazing the difference it makes. Six months to a year after retirement, when they’ve successfully navigated the transition and realize the plan is working, they seem ten years younger.

They find themselves sleeping better at night, feeling healthier and happier than they have in a while. Often, they describe the retirement years as the best part of life. They have wisdom and experience from their decades in a successful career. Not only can they appreciate everything they’ve been through, but they can relax and look ahead to rewarding years made possible by a life of discipline and persistence. They have the capital, resources, and financial security to pursue the passions, health, hobbies, and family time they’ve always dreamed of.

As their financial advisor, seeing clients enjoy a successful retirement is one of the most rewarding parts of my professional life.

Common Dangers and Opportunities

In twenty-seven years of professional experience, I’ve conducted over fifteen thousand private meetings with clients. I’ve seen the planning and investment strategies that work, the most common dangers people face, and the opportunities that exist in their lives and in the markets. I’ve observed the recurring themes and the mistakes people make.

In this book, I want to clearly and succinctly describe the things I’ve seen working for people over the years, as well as the dangers that can derail your retirement plans.

When I first started in this industry, many people still depended on their pensions to see them through retirement, but even then, the paradigm had begun to change. Today, very few people have pensions or any other monthly income stream they can depend on. Though most people will receive Social Security, rarely is it enough to cover everything they need. Retirement planning and long-term security can simply no longer be entrusted to the government or corporate employers. More than ever, the responsibility lies with the individual to plan and...