Retirement Planning | It’s Like your Junk Drawer…

December 8th, 2009 categories: Charlotte Real Estate & More

Retirement Planning | It’s Like your Junk Drawer….you know you think about it once in a while, even start to work on it then anything, anything comes up and you leave it for another day! Well as we approach 2010 which should be a reprieve financially compared to 2009 (Rhonda thinks stringing colored lights on our Christmas tree for the 1st time is a sign)…our friends Jeff & Jeff at Karp Financial Strategies have some thoughts and ideas on how to get your retirement planning on or back on track!

ps. much of the information applies equally well if you are thinking of buying or selling a home in Charlotte next year – financial prudence is a powerful tool!

From Karp Financial.…”Are you “thinking” about retirement? As early as 1968, the co-authors of the book, Social Security: Perspectives for Reform, observed: “There is a widespread myopia with respect to retirement needs. Empirical evidence shows that most people fail to save enough to prevent catastrophic drops in post-retirement income. Not only do people fail to plan ahead carefully for retirement, even in the later years of their working life, many remain unaware of impending retirement needs.”

Twenty years later in 1988, author Venita Vancaspel discussed financial literacy in the United States in her book, Money Dynamics for the 1990s. She wrote: “There is an educational void in our nation, and unfortunately we are raising a generation of financial illiterates. Even many college graduates cannot figure simple percentages. They are not teaching the one subject that they will need to live well in our free enterprise system – how to manage money. This vacuum is so great that the average couple cannot begin to confront the financial uncertainties and the multitude of choices they face in our complex society.”

All stages of life require us to make financial decisions and plan for economic security. No other life stage, however, is likely to create “the financial uncertainties and multitude of choices” as does retirement.

In 1998, author Robert Stoneman noted in his book, High Finance, Hard Sell, that millions of Americans were finally starting to understand that they must take more responsibility for their long-term financial security. He wrote that many individuals were turning to financial planning books, magazines, and television programs for money management and investment knowledge.

Stoneman also observed that millions of others were making little headway because of financial illiteracy. One of the biggest challenges facing financial companies was to “persuade consumers to forego things they could have now on behalf of building wealth and security for their future.”

Inarguably, many individuals today would be in much stronger financial positions had they focused earlier on building future wealth. A 1991 study by researcher, consultant, and President of Money Quotient, Carol Anderson, investigated factors that either enhance or hinder resource management and asset accumulation for retirement planning. Resource management in this context means using our personal resources (time, energy, skills, money) to achieve our goals efficiently and purposefully.

A surprising result of the study was that the variable “thinking about retirement” proved to be a stronger predictor of pre-retirement resource management than any other variable tested, including whether one was expecting a pension, the level of family income, and age. In addition, “extent of thinking about retirement” proved to be nearly as powerful a predictor of retirement asset accumulation as did family income and was decidedly more influential than education level, occupation level, proximity to retirement, and pension expectations.

These findings demonstrate that engaging in reflective and productive thinking about our future retirement can influence our financial planning for it and help to counteract potential negative influences such as lower income, lower occupation status, and lower education levels. The study also indicates the importance of how cognitive processes – thinking – can influence financial behaviors, motivate planning activities, and initiate positive change.

What was written more than forty years ago remains true today. It is important to spend time now planning for your future.

Are you “thinking” about retirement? Feel free to contact us to answer any questions and help guide you through “thinking about retirement”.

Jeffrey R. Karp, CLU, ChFC, CASL™
Jeffrey P. Kendall, Karp Financial Strategies
704-658-1929

www.karpfinancial.com
* Securities and Investment Advise offered through LPL Financial, member FINRA, SIPC
* Article was prepared by PEAK.

This entry was posted on Tuesday, December 8th, 2009 at 11:14 am and is filed under Charlotte Real Estate & More. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. reseller hosting said at December 22nd, 2009 at 11:56 pm

   I really like your writing style, its not generic and extremly long and tedious like a lot of blog posts I read, you get to the point and I really enjoy reading your articles! Oh, and merry Christmas!

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