The Art and Science of Retirement Planning
Doug Nelson is author of the newly released Master Your Retirement and shares these wisdoms for retirement income planning.
There is an art and a science to retirement planning, both of which are extremely important to master your retirement. You can’t just focus on one and expect things to work out well in the end – both components are necessary for success.
Consider this simple mathematical equation: 5 + 2 X 10 – 1 X 100
What answer did you get? The correct answer is -75. This is the correct answer because mathematical equations are based on mathematical laws. Things need to be done in a particular order, otherwise you end up with completely different results.
With this in mind, what are the really important mathematical laws that need to be applied to every retirement planning situation, and in what order should they be applied? This is the “science” of retirement planning.
Now consider the assembly of a jigsaw puzzle.
A jigsaw puzzle is often a beautiful, colorful image with significant detail when properly put together. Yet, before you begin, this image is chaos, broken into hundreds or thousands of pieces.
When starting to assemble a puzzle, the first step is to turn all the pieces upright and organize them into meaningful groups. Once you put all of the outside pieces together, you then start to fill in the puzzle one section at a time.
What if we applied the same approach to the “art” of your retirement plan?
What if you laid out all of the pieces of your retirement plan by making a list of all of the many different things you wish to do, the places you wish to see, the people you wish to be close to, and the things you’d like to learn. These are the different pieces of the puzzle.
What if you then began to prioritize each of these items by placing them into various priority groups? The highest priority group are those things you wish to do first. The second highest priority group may be those things you wish to do in three years. There may also be things on these lists that you want to do annually, such as visiting with the kids and grandkids. In the same way you are organizing the pieces of the puzzle, you begin to organize the pieces of your retirement years.
This is the “art” of your retirement planning process: assembling a wonderful, detailed and diverse picture of this next phase of your life.