Comfortable Versus Competent

Dear Valued Financial Partners and Friends,

It’s one thing to feel comfortable making financial decisions before and during retirement. It’s quite another to be financially competent during those same time periods.

Working with retirement dollars just before and during retirement may be successfully compared to hypothermia. In the final stages of hypothermia people often feel calm and comfortable. Quoting from the Mayo Clinic’s official website, “Someone with hypothermia usually isn’t aware of his or her condition because the symptoms often begin gradually. Also, the confused thinking associated with hypothermia prevents self-awareness. The confused thinking can also lead to risk-taking behavior.” People making it to retirement may share a similar state of mind.

Spending-down assets may seem easy, but financial decisions made before withdrawing even $1 from retirement accounts or signing employer or Social Security forms may well determine how long your money will last. (Neither Social Security’s nor your employer’s representatives will have all the facts about your total financial picture.)

We could share dozens of stories about costly financial mistakes and risks that didn’t need to be taken. In retrospect, many of those financial decisions affected both the husband and the wife. Ultimately, most of those uninformed decisions had the greatest impact on the quality of life of the surviving spouse. Here are other areas of concern.

Overconfidence: Just like entitlement is the first step in theft or fraud, overconfidence usually leads to unwise financial decisions. Retirement decisions are often a one-time-only proposition, without a chance for a do-over. Retirement planning can be complex and many things can go wrong. Our experience may help eliminate or reduce these costly decisions.

Enamorment: You have worked hard to build your retirement nest egg, but may have never worked with the size of the dollars in your nest egg. Enamorment with those very dollars could lead to your financial downfall. Even if your dollars have reached a critical mass that will sustain your lifestyle, beware! We all know of lottery winners, professional athletes, and others who have earned or inherited millions of dollars only to have that money gone in just a few years.

Too many people make financial decisions based on their coworker’s or neighbor’s situation. We help you make financial decisions based on your unique financial situation. Our competence can help you feel comfortable and confident. Let us help you. Remember, your financial success is our passion!

Bullish Best Wishes,

Roger M. Smedley, CFP®


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