The Perseverance Mission Parallels A Sound Retirement Strategy

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One of the greatest scientific feats of recent years took place on Feb. 18th, 2021 when the Perseverance Rover touched down on Mars.  

This exciting mission could reveal secrets about the red planet that will lead to a greater understanding of our own world as well as convincing evidence of past life on another body in our solar system. The potential implications of such a discovery are mind boggling!

On a much more personal level, the entire Mars mission is also a great model for building your retirement plan. Here are a few simple lessons we might learn. 

Retirement planning may not be as exciting as “the final frontier” of space, but there are many valuable lessons and parallels that could help you “boldly go” in your golden years. 

1. Start Early

The Perseverance mission wasn’t slapped together at the last minute. It actually began in 1994 when NASA came out with the Mars Exploration Program and then it was updated in NASA’s 2014 Strategic Plan. Those comprehensive documents clearly laid out the goals, objectives, and processes behind all of NASA’s efforts for the next decade and beyond. 

Similarly, effective retirement planning takes time. The steps you take in your twenties and thirties will lay the solid foundation for your sixties, seventies, and beyond. Simple things like starting an IRA, maximizing your 401(k) contributions at work, and intelligently controlling your use of credit can make a gigantic difference. 

It may seem impossible to expect the average 25 year-old to think 40 or 50 years down the road. But you don’t need the same level of precision and detail that NASA requires. Just by following some general guidelines and learning some basic financial principles, like the benefits of budgeting and the power of dollar-cost-averaging, would be sufficient at such an early stage.

The sooner you start planning your mission to retirement, the better chances you have of success. Let’s say you started at age 35 by saving $100 per month. Assuming a 5% annual compounded rate of return (which is reasonable) you would have accumulated over $83,225 by age 65. But if you were really smart and started at age 25 instead of 35, that pool of money almost doubles in size to $152,602.  

If you look at it another way, to reach that same goal, you would have to save over $183 per month instead of $100 if you delay your start date to age 35 instead of 25. Of course, it’s reasonable to assume you would be earning more money in ten years, but if you carry that logic out further to say, age 45, now you would need $372 per month to get to that same $152,000 at age 65.  Your target spirals further away and the energy needed to reach it increases the longer you delay the launch. 

While you are young, time is your greatest savings ally, so take maximum advantage of it. As you get older, I guarantee you, time becomes a lot less friendly. I think Einstein proved time actually speeds up with age.

2. Build a Multi-Disciplined Team

The Perseverance mission was developed and is operated by experts from over one hundred different scientific, engineering and other disciplines. Specialists in physics, chemistry, biology, math, materials science, computers, electronics communication, and geology, just to name a few, have all come together to plan and execute this mission. It would be very hard to find a scientific field that was not involved in this mission in some major way. 

Retirement planning isn’t rocket science and the team of experts you need is tiny by comparison. But a few good people can really make an impact at different life stages. 

As a newer investor, you really don’t need a lot of help. There are hundreds of on-line platforms and simple investments that will serve you perfectly well for many years. When your situation gets more complex and the dollar amount of your portfolio climbs into six figures, find yourself a great financial advisor. They have the broad knowledge and big picture view of the overall mission needed to keep you on course. Plus they will work in concert with the other experts you need to succeed. 

Your retirement journey begins by building wealth in what’s called “accumulation phase.” Here you want growth-oriented investments with good liquidity, diversification, and reasonable fees. Chances are you will start off in a mutual fund or ETF (exchange traded fund) of some kind. This is one of the easiest investment vehicles you can use and nearly every advisor is well versed in how they work and which ones to recommend based on your specific needs.  

The next hire on your team should probably be a good tax professional or accountant. These folks can keep you out of trouble with the IRS, which is a nightmare no one wants. When you’re just starting out, taxes are not likely to be a big deal. But as your situation gets more complex, you want to find someone who doesn’t only look in the “rear view mirror” meaning they only review what you did in the past and tell you what you owe Uncle Sam. You really need someone who is going to look down the road ahead and tell you what to do going forward to minimize the increasing tax bite.  

Ideally, your financial advisor and tax specialist will work closely together to pro-actively minimize the pain of taxes. Get these folks talking as early as possible. Some of the best strategies you will want to use in retirement need to be started years before you actually retire. One example of this which you’re hearing a lot about these days, is a Roth IRA conversion. That can be a fantastic tool, but it has to be in place for five years before you can use it. So don’t wait too long to build your team of experts.  

Depending on your family situation, it will also help to have a good insurance agent and estate attorney. Both become more critical as you get older, but starting early, especially with insurance, can make a big difference because the costs of various programs can increase dramatically as you get older. 

3. Patience

On TV shows like Star Trek or my new fave, The Mandalorian, traveling through space is a snap. You simply hit warp drive and you’re there before the next commercial. By contrast, Perseverance’s trip to Mars, our closest planetary neighbor, took a full seven months to travel the 293 million miles in a circular route that was needed to anticipate Mars’ changing orbit position during that time. 

The journey toward retirement may take decades and will absolutely require many course corrections along the way. Not only will your needs change at different life stages, but the financial markets are far more dangerous and unpredictable than empty space. There are hazards like bear markets, inflation, rising interest rates, and damaging government policy, not to mention taxes!  

It’s essential for success to maintain a long-term perspective. Reacting to short-term market swings and media sponsored uncertainty is tempting but 90% of what you see on TV or read on-line about the markets is designed for one reason: to keep you tuned in and subscribed to their service. It’s hype and fluff with extremely limited value.  

Professional investors running billion dollar pension plans or wealthy family offices ignore this news feeding frenzy. They focus on broader trends and cycles and are not captivated by the second-by-second gyrations that mean nothing.  

Over the course of my 38-year career, the Dow Jones Industrial Average has climbed from 890 to over 33,000! That’s an average annual return of 10%...or 37 times your money! Do you need any other statistic? Of course it didn’t go straight up, and there were moments when it felt like the world was ending. But if you simply held on and rode out the storms, you would be one very happy investor today. 

4. Discipline

NASA is about as far from an impulsive organization as you can get. For any mission to succeed, these folks have to think, plan, and act literally decades ahead of the end result. The intense gratification of landing Perseverance successfully on Mars was so delayed and disconnected from the initial idea that only the most serious professionals with highly disciplined minds could accomplish this feat. 

The journey toward retirement isn’t nearly as unforgiving, but it still demands an ability to think ahead and make decisions today whose impact may not be felt for years in the future. One major habit that will be invaluable to you is the ability to control your spending and delay gratification. 

I’m absolutely not saying you shouldn’t enjoy yourself while you’re young. But every $10 dollars you spend at age 25 is potentially $300 you will not have in retirement. To help you develop this “frugality instinct” use a simple technique called the “One-Day Delay.” 

Whenever you see something you want to buy that costs more than $20…wait 24 hours. If at the end of that day you still really want that thing…go ahead and buy it. I’d bet that 80% of the time you will find that you can’t even remember what it was you so badly wanted. You were acting on impulse. Our society today is built around impulse and we all are victims. With a single click you can have almost anything you desire shipped right to your door in less than 24 hours. This hyper-convenient consumerism can be insidious. Now you can even do this with food. Click…I’ve got boneless wings!  If Uber Eats existed twenty years ago I’d be long dead by now. 

Patience and financial discipline are two other powerful allies for retirement planning. A small degree of self-denial while you’re young may prevent forced denial when you’re retired. Trust me, whatever transient joy you get from buying something today at age 30 or 40 will pale in comparison to the peace-of-mind you will have knowing you’re financially secure at 65.  

I have doled out this “fatherly advice” over the years to my two teenage daughters and I’m proud they both have savings and their own small stock portfolios built entirely with money from their part-time jobs. Helping your kids develop financial discipline and some basic skills will be among the greatest gifts you could ever give them. 

The Search for Life

So this all leads us to the big question: Is there life after retirement? In many ways that’s totally up to you. By planning early and following a few simple steps, the journey during your golden years can be joyous.  

Perseverance has the tools to search for past life on Mars and the results could have a staggering impact on our world. You have the tools to make that same dramatic impact on your own life. It’s up to you to use them. 

My greatest retirement wish for you is summed up by everyone's favorite Vulcan Science Officer: “Live long...and prosper!”