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Money Matters for Seniors
Late Retirement Planning gets Lesson from Olympic
Team
1980 U.S. Men’s Hockey Team
teaches us about late-stage retirement planning
By
Robert Valentine, Certified Senior Advisor
Jan. 31, 2006 - It was February of 1980, at Madison
Square Gardens during the height of the Cold War. It was there, that the
U.S. Men’s Olympic Hockey team took on what experts considered the
world’s best hockey team at the time: the U.S.S.R. It was an exhibition
match meant to be a preview of the upcoming Olympics and the U.S. was
trounced, 10-3.
Fast forward ten days later and after being given
no chance by critics and fans alike, the United States men’s team pulled
one of the biggest sporting upsets of all time by defeating the
U.S.S.R., 4-2. That team would then go on to win the Olympic Gold Medal
and their story would become known as the “Miracle on Ice.”
So how did they do it? How did they go from being
given no chance to pulling off the inconceivable?
Some say it was one of those perfect moments when
miracles happen. Others point to something more solid: the preparation.
The Russians spent their practice days before the medal round sitting
around, studying plays, and generally relaxing. In general, they didn’t
really prepare. The U.S. team practiced as hard as they ever had before.
The coach looked for weaknesses and planned a winning strategy.
Their dramatic turnaround in such a short time is a
solid example of two things: 1) It’s never too late to reach your goals,
and 2) with the proper planning and strategy, you’re more likely to
accomplish great things. This couldn’t be a better vision to have in
your head if you’re nearing retirement and haven’t spent much time
planning and saving for life after work.
While not all investment stories end successfully,
with just the right combination of perseverance, planning, and
sacrifice, you may still be able to retire in relative comfort even if
you got a late start in the game.
Your strategy and frame of mind are the keys when
beginning to save for retirement later in the game. You can sit around
like the U.S.S.R., resting and doing basic review, or you can prepare
yourself mentally for the challenging, (but potentially rewarding) road
ahead.
When faced with the reality of catching up, you
must also accept the fact that you may have to be more aggressive in
your savings habits and your investments than some of your friends or
co-workers who started saving long-ago. You no longer have the luxury of
being as conservative later in life as you may like. You may also have
to consider the possibility of working past age 65.
Most Americans who work today breeze past age 65.
There’s a growing trend of people who love their jobs or just love to
work. Realizing that you may have to work a bit longer is something you
might have to consider at this stage. Now that you’ve sharpened your
skates, and prepared mentally, it’s time to go out and play.
First things first. If you’re starting late in the
game it’s extremely important to take advantage of the catch-up
provision offered by 401(k)s and IRAs. In order to catch up and still
have a comfortable retirement, you’ll want to contribute the maximum
amount to each, plus the extra amount you can add by law. This is known
as the “catch-up provision.”
If you’re 50 and older, the catch-up provision for
401(k)s in 2005 was $4000, and now increases to $5000 in 2006. IRAs
allow you to contribute a catch-up of $1000 for 2006. While it may seem
difficult to contribute the maximum amount plus a catch-up, you have to
ask yourself if you’d rather sacrifice now or worry a lot later.
This helps you stay focused on your goal and every
day needs of retirement. One of the biggest pieces of advice available
today has to do with planning a budget and trying to play catch-up. You
should list your retirement fund expenses first, as the most critical,
before anything else and budget up from there.
Just playing catch-up isn’t the only way to save
this late in the game for a successful retirement. One way to help (be
more comfortable) later on in life is to reduce some of your heaviest
debt right away. By reducing the amount you owe in credit card bills,
car loans, or even your children’s extra college expenses, you ensure
that when the time comes for you to retire, you do so knowing that your
largest debts are behind you. This keeps you focused on the every day
needs of retirement.
Finally, if you’re entering the retirement planning
phase this late and you enjoy working, you might consider doing so a
while longer. Besides the added financial benefit, you’re also
contributing to your personal well-being both mentally and physically.
You may even consider starting your own small business and making a bit
of extra income while setting your own hours. After all, you’ve earned
this freedom; shouldn’t you be taking advantage of it?
There is always something you can do to save for
retirement, even if you think it’s too late. While the 1980 U.S. Men’s
Olympic Hockey team may have been called the “Miracle on Ice,” planning
for retirement this late in your life doesn’t take a miracle. But it
does take a certain amount of self-sacrifice, some elbow grease, and
some trusted planning from a financial professional. These are just a
few of the basic ways to be prepared for retirement this late in the
game. It won’t always be an easy path to retirement savings but with the
right combination of hard work and trusted planning, you may find
yourself with more time to enjoy life after work.
Robert Valentine is a Certified Senior Advisor in
Huntington Beach, CA. He can be reached at (877) 732-2637.
About author
This article was submitted by Robert
Valentine of Financial and Retirement Management. Robert (CA Insurance
Lic #0C23496) is a Registered Representative of and offers securities
through Securities America, Inc., a Registered Broker/Dealer, Member
NASD/SIPC. Advisory services offered through Financial and Retirement
Management, a Registered Investment Advisory firm. Robert is a Certified
Senior Advisor in Huntington Beach, CA. Several of his articles on
financial planning matters that concern investors have been published by
SeniorJournal.com. Robert
can be reached at (877) 732-2637.
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