Personal Governance. Don’t be a plumber with leaky pipes
There’s an old saying that “plumbers have leaky pipes”. It’s based on the premise that we are all too busy to look after our own needs because we put others first. This scenario can sometimes be a reflection of retirement planning – we get wrapped up in life’s events that we forget to take care of our personal retirement needs.
The beginning of the year is a great time to reflect on what steps to take as retirement approaches, be it two or 20 years away. Think of this as a time for “personal governance”. Just like a plumber should look at their own pipes to deter any issues from arising, it is important for us to analyze our retirement plan before it’s time to retire.
How do you go about implementing a personal governance process? Define the expectations of what you want your retirement to look like – determine how much income you will need, your target date for retirement and how you will manage life needs when you are out of work. You need to do this regularly (at least yearly) and if you haven’t done so yet, start now. Although we are often too busy with the day to day speed of life to look far ahead, it’s important we sit down and make the time. Look at your current financial position in terms of planning for retirement and look at your goals – are you a year closer to realizing the desired outcome?
The first item on a retirement planning checklist should be scheduling an annual review of your current position and future goals. A deadline will help you make this happen. The key elements to review are the level of your current retirement savings and how they are invested. Saving money is trading off today’s spending for a more secure and rewarding retirement. Likewise, look at your investment mix to see if it is appropriate for your long-term goals – for many this will mean discussing your asset mix with someone that specializes in this area and is not swayed by current economic news or market fears (or market optimism).
Now is the time to take out your agenda and make a date for your personal governance to ensure you are making progress to a sound and enjoyable retirement.