Home' Trinidad and Tobago Guardian : July 20th 2014 Contents JULY 20 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
PERSONAL FINANCE | SBG21
One of our biggest fears is that we
haven t saved enough for retirement.
It s time to stop worrying about it
and start doing something. The fact
is, there are a growing number of
The answer may not necessarily be working in your
current job through retirement. Many of us don t realise
it, but we may not all be healthy enough to do that.
In fact, according to the Employee Benefit Research
Institute, 47 per cent of retirees left the workforce
sooner than they had planned.
"I think that when people are in this position, they
need to try not to worry and panic, because they have
options," says Sandy Franks, executive director of the
Women s Financial Alliance in Baltimore. "They get
too worried and panic."
But, as with anything, you need to first look at you.
"Knowing what your expenses are can go a long
way in making sure you can have a comfortable retire-
ment," says Herb White, president of Life Certain
Wealth Strategies in Denver
But after that, there are other ways for retirees to
actually earn---or save money---many that you probably
haven t thought of.
1. Can you turn your hobbies into extra
White says one client, a former engineer, now teaches
the clarinet, bassoon and saxophone to children and
adults. Another client, a former nurse, became a sub-
Sean Lee, founder of SPL Financial in Salt Lake City,
says among his clients is a married couple who knew
they would need supplemental income in retirement,
but did not want to work. She s already retired, and
he s planning to retire in January. "They didn t want
to go to Walmart or work part time at Home Depot,"
Both turned to their hobbies. Larry Cundick, 62,
was a pencil artist who did Western-style drawings.
Rosalynn, 59, created Western-style glasses and purses.
"They ve turned these hobbies into profitable busi-
nesses," Lee says. "They re to the point that they don t
have to use their retirement funds." Both Buck Cundick
Art and Overlook Street Leatherworks have Facebook
Another option, says Franks, is website Udemy.com,
which offers online instruction. If you have any skill
--- plumbing, baking, cooking or even how to use an
Excel spreadsheet---you can turn it into a course and
offer it though Udemy.com. People pay to take the
course. She says one woman created a cake-decorating
course. "She has 554 students paying her $39 apiece.
"That s about $21,000, an excellent way for a pre-
retiree to create extra income."
Saving for retirement is
a journey that can eas-
ily span a few decades.
And there are so many
that it s impossible to
come up with the perfect plan. You
need to decide how much to save in
order to sustain your lifestyle in retire-
ment and choose the right asset allo-
cation and investments, even though
you don t know how long you will live
or how those investments will perform.
However, there are some mistakes that
almost always make you worse off in
Here are four retirement planning
errors to avoid:
Determining the highest safe
withdrawal rate. It s difficult
to come up with a withdrawal
rate that is safe enough to last a lifetime.
The reality is that no one will ever be
able to come up with an optimal num-
ber when there are decades of retire-
ment to pay for. You need to make
assumptions about future investment
growth, inflation and how long you will
live, which are nearly impossible to pre-
dict, so any calculation will be inac-
That s not to say that the studies
about safe withdrawal rates aren t use-
ful. Withdrawing 4.0 per cent each year
is still a reasonable amount to plan for,
but the only reliable withdrawal strategy
is to stay flexible in an ever-changing
Thinking financial planning
is all you need to do. Having
enough money is only one
component of a successful retirement.
While money can buy conveniences
and solve problems, it isn t the only
thing you need to retire well. Friends,
family and good health are much more
important than seeing a ton of digits
whenever you look at a bank statement.
After all, how will you ever be able
to spend the millions if you are sick
and tired all the time? And what s the
point of living a lavish lifestyle if you
don t have friends to spend time with?
Thinking about money is time well
spent, but some effort cultivating the
relationships that matter and taking
steps to stay healthy is not just nice,
but necessary. You don t want to be
always sitting at home spending time
alone in old age.
Comparing what you ve
accumulated to others.
Someone is always going to
be richer, better looking, more articulate
and nicer than you. If you build your
identity on being the best at something,
then you are bound to be disappointed
one day. It can be difficult to avoid try-
ing to keep up with your neighbors,
and it s best to avoid comparing yourself
to someone else. The next time you see
a neighbour enjoying luxuries you can-
not afford, try to appreciate the success
he or she is having. Not only will this
make you happier, but the person might
even like you enough to ask you to come
Going after every opportu-
nity to boost gains. It s easy
to consume yourself with
trying to maximise every dollar, but
being unnecessarily frugal can damage
relationships with those around you.
Learn to share some of the resources
you have with others, and your life will
be transformed for the better. You can
be happy with much less than you have
right now anyway.
Just think back to the days when you
were young and broke. You were happy
then, and some people consider those
the best days of their life. Try your best
to build a solid nest egg, but don t neg-
lect other parts of your life in the
Retirement planning is important,
so take ample time to figure out a
roadmap to get there. But don t dwell
on every little detail as if there will
always be a perfect strategy. Make the
best plan you can with reasonable
assumptions, and then stay flexible in
retirement and make adjustments when
short of cash?
What to do...
Four ways to ruin
your future plan
Continued on Page 23
Links Archive July 19th 2014 July 21st 2014 Navigation Previous Page Next Page