During my day job (J), I meet many clients to look at their personal finances. More precisely, my mandate is to create financial plans and help clients with more than $250,000 invested with the bank. So, most of them are in their 50s. Unfortunately, I come across a lot of people who don’t have a financial plan and have never discussed retirement planning. At one point, it’s like they feel that it’s too late or they are too ashamed to talk about retirement planning. Like most things we don’t like to do, we all hope that time combined with magic and prayer will take care of our retirement planning ;-).
So if you don’t have a plan at 55, is it too late for retirement planning?
The quick answer is no (especially since you might not even retire at 65  but perhaps closer to 70 or 75 😉 ). However, some things may need to change if you want to have a comfortable retirement:
Look at reality
The very first thing is to look at your net worth, your budget and how much you are saving in your retirement account right now. Like an alcoholic, you need to acknowledge that you have a problem before starting to solve it ;-).
Once you have your statements in order, make an appointment with a financial advisor that is able to create a retirement plan. He will key your information into his software and be able to tell you about how much you have to spend annually during your retirement years. Warning; this will be a reality check!
Make a real effort
Some people talk for years about the day they will stop smoking while others don’t say a word and just do it. This is similar to retirement planning. Making a genuine effort will be the key point in your plan. It will hurt, I swear it will. Therefore, you will have to bite your tongue and put the damn credit card away if you want to pursue your dreams.
Change your lifestyle
Instead of living in a state of constant frugality (read frustration), you can deliberately decide to change your lifestyle. Instead of cutting out things, try doing things differently. Don’t cut out your morning coffee from Starbuck’s, but bring it from home. Eat out only once a week and bring nice meals instead of a stupid sandwich in your brown bag ;-). Consolidate your debt, look for lower interest rates (transfer your balance on a 1.99% credit card  😉 ). By slowly changing your habits, you will see the difference of making progress in your retirement plan without being frustrated.
Don’t be a gambler
The temptation is great but you must resist. If your financial advisor does a projection at 7, 8 or 9% returns, don’t buy his BS. If you try to invest seeking the equivalent of a home run, you will more likely end-up striking out. Invest steadily with good investment strategies instead of trying to find the next RIM or the next mining company about to explode. This will only distract you from your original retirement plan and delay you ability to retire.
Respect your asset allocation and retirement plan
Making efforts, avoid gambling and establishing a retirement plan is only good if you stick to it and follow it to the letter. Review your retirement plan once a year to make sure you are making progress and that you are not late. Doing this exercise once is not enough, you need to revise your retirement plan annually ;-).
If you want to learn about how to find a good financial advisor, try this series I wrote a while ago:
And if you are looking for asset allocation advice, I am currently writing a series over at Green Panda:
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