A Retirement Plan is Worthless.

But retirement planning is everything

Stealing a good line. General Dwight Eisenhower said, “Plans are worthless, but planning is everything.” He had reason to know. He and his team planned the invasion of Nazi Europe and succeeded even though things didn’t go according to plan.

The First Law of Retirement

That’s the first law of battle. No battle plan survives contact with the enemy. Same is true of a retirement plan. No retirement plan survives contact with the realities of retirement.

But the act of planning in advance better prepares you to respond to the unexpected. Because you’ve anticipated the predictable and familiarized yourself with the controls, you can focus on responding to the true surprises.

You can believe it coming from a General of the Army and President. Eisenhower earned both titles.

Change the Game

We were reminded of this famous quote by J.B. Bernstein, the famous sports agent behind the real life story in the movie and book, “The Million Dollar Arm.” J.B. distilled his life lessons from a successful business career into a speech and book. He was the luncheon keynote speaker at a recent meeting. Thank you, to the Iowa SMART Conference by the Iowa Economic Development Authority and Iowa’s big utility companies. #ThisIsIowa.

The movie is good. J.B. was if possible, even better. The title of his speech is, “Sometimes to win, you have to change the game.” That’s also the subtitle of his book.  J.B. offered five things that successful people invariably do that explain their success. Planning was one of the five. He repeated an old saw, “Failure to plan, is planning to fail.” But he also explained why it’s true. Without a plan, you end up firefighting predictable and preventable problems rather than focusing on and solving the unpredictable. You get bogged down. And regrets come not when you’ve done your best and fallen short. Regrets spring from failing when you know you could have been better prepared.

Sneak Peaks

More on J.B. Bernstein’s five defining predictors of success in later blog posts. www.twitter.com/jbberstein @jbbernstein

Also coming is more on some big demographic trends for both Baby Boomers and Millennials from the conference. Just a teaser. The New American Heartland, where the American dream still works, has a bright future. Millennials, welcome to the land where you can afford a house. And your trailing parents aren’t far behind.

Retirement Regrets

But for now, what’s true in war, what’s true in business, is also true for Baby Boomers approaching (or in) retirement. You need a retirement plan.

Failure to plan leads to regret.

Don’t expect everything to go according to your retirement plan, but you’re better prepared if you do plan.

Retirement Equation = resources (income) > expenses?

It pays to think about both sides of the retirement financial equation. What do you have or need for savings? Income sources? That’s the resources side of the equation.

How can you adjust your lifestyle to match your savings and expected cash flow? That’s the expenses side of the equation.

Too many people treat their expense side as fixed and immovable. Not true.

The full-time recreational vehicle (RV) market and tiny house movement both have large cohorts of Baby Boomer retirees. Many retirees are motivated by the resulting lower cost of living compared to the traditional suburban stick and brick lifestyle. How the Trailer Park Could Save Us All, Pacific Standard Thes folks are reducing the expense side of the equation.

Retirement Planning > Financial Planning

And another big lesson, retirement is more than a financial conundrum. You really have to plan all the aspects of your life including health, relationships, purpose, and more. (See our blog post on, 6 Whole Person Dimensions of Wellness.) A financial plan is a good start, but a retirement plan goes beyond the money. Retirement has to be more than sitting on your hands in a dark room. Boredom and isolation are not healthy.

Surprises

Things you can’t fully control or anticipate?

  • The timing or cost of a health crisis. We’re reminded of this by a friend our age. He’s similarly prepared with a retirement plan. He lives below his means. He accumulated a good nest egg. At 60, he’s dealing with a serious cancer diagnosis. But having planned and prepared he’s dealing with the surprise change in plans. He retired earlier than “the plan.” But his planning means the cost of care isn’t an overwhelming issue. He’s now riding his Harley and visiting places and friends. His prognosis is good. His adjusted plans are better.
  • Down market events. You don’t want to retire in a year like 2008 when the stock market panics and heads south. But you may have no choice. If you know what your living expenses are, and what your cash flow needs to be, then you can revisit the math and make adjustments.

Retirement Plan Contingencies

You do know that both issues are possible scenarios. This is why contingency plans matter. If X then Y. It’s the logic behind Teresa Ghilarducci’s advice to be prepared to retire at 62. Great if you want to work longer and can, but it’s not always within your control. The economy, employers, and the health roulette wheel may have a say. See, How to Retire with Enough Money: And How to Know What Enough Is, by Teresa Ghilarducci and our summary at http://ccrclifecast.com/2016/03/31/retire-at-62/

Retirement plans won’t pan out exactly as anticipated. Life is too unpredictable. But you’ll be better off for investing time and effort in retirement planning.  A retirement plan is worthless, but retirement planning is everything.