Flexibility and adaptability: key ingredients for a good retirement
Financial Planning
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Retirement is frequently framed by financial advisors as a milestone and, hence, a destination. The day you finally leave your full-time career and the workforce for good is a particular date and concrete threshold, much like a specific airport is (normally, at least) the final stop for a given flight.
Only retirement is more of a journey than a destination. While that cliché is overused in all manner of personal and career advice, it nonetheless applies to one of life’s biggest shifts. That’s because changes are a transition, which itself is a process, not a static landing point.
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The prevalence of target-date funds in 401(k)s conveys the static idea. The funds automatically become more conservative over time as a saver ages, having guessed likely decades in advance what year they think they’ll set out for their golden years.
But between job hopping — the average American worker holds around 12 during their working years — career shifts, financial setbacks that create the need for more income-earning years, increased longevity and a growing body of evidence for the benefits of staying active and engaged, it’s difficult for someone who’s, say, 28 to decide they’ll retire at 68. Maybe that date will come sooner; maybe it will materialize later.
That’s why a new study from brokerage Edward Jones showing flexibility and a willingness to adapt as essential components of a good retirement is significant.
In other news:
The recent study from Edward Jones highlighting the importance of flexibility and adaptability in retirement planning is significant. Recognizing that retirement is a dynamic and evolving process emphasizes the need for individuals to remain open to adjusting their plans based on changing circumstances. Being willing to adapt can help navigate unforeseen challenges, take advantage of new opportunities, and ensure a more fulfilling retirement journey. Rather than solely focusing on a rigid retirement age, it is essential to approach retirement planning with a mindset of continuous assessment and adjustment. Regularly reviewing financial goals, reassessing priorities, and remaining open to new possibilities can contribute to a more resilient and rewarding retirement experience. In conclusion, understanding retirement as a journey underscores the need for flexibility and adaptability in planning. By embracing the dynamic nature of retirement, individuals can navigate the changing landscape and make informed decisions that align with their evolving needs and aspirations.
The notion that retirement is more of a journey than a destination is a poignant reminder of the evolving nature of this life transition. While financial advisors often frame retirement as a specific milestone or date, the reality is that retirement entails a process of change and transition rather than a static endpoint. The use of target-date funds in 401(k)s reflects the static idea of retirement planning, where investments automatically become more conservative as individuals age, assuming a predetermined retirement year. However, the complexities of modern life, including career shifts, financial setbacks, increased longevity, and the desire for continued engagement, make it challenging to set a fixed retirement date decades in advance. Personal circumstances and priorities may shift, leading to retirement occurring earlier or later than initially anticipated.
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1 年Like everything else in life, you should ask a pro for advice and guidance -- but you need to understand their advice. Educate yourself on investing (growth vs dividends; equities vs bonds vs real estate; mutual funds vs ETFs) and don't hesitate to ask your advisor to explain the differences to you. A good advisor will be happy to do that.
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1 年True!
Financial Educator & Coach. Specializing in Retirement Planning. Let me be your compass.??
1 年The article makes some good points but i believe it it’s important to have a goal in mind when you put your retirement plan together. I call it your Financial Independence Number. That is the amount you need to have saved to be able to “retire”, not have to work again and not have to worry about outliving your money. Obviously that is a dynamic process. The goal may change based on the obstacles along the way, and the plan may have to be modified. That is why it’s important to partner with a guide to help you manage those obstacles!