The PBS Frontline documentary The Retirement Gamble has sparked a lot of discussion, both pro and con. One thing that is clear, the show contributed to the discussion about the lack of retirement readiness among many in the United States. I’m hardly an expert in behavioral finance, but I do know that in order for investors to be able to focus on planning for their retirement they need to adopt the right mindset.
Lose the victim mentality
I saw a lot of this on the PBS special and see this written about frequently in the press. The last few years especially have been rough on many of us saving for retirement. Job losses; the financial crises; the Flash Crash; the realization that not all financial advisors have their client’s best interests at heart; the mutual fund scandals of the middle part of the last decade might all be good excuses to feel like a victim.
As my wife used to say to our kids on the soccer field (when they had a minor injury) “…suck it up and get back in the game…” If you feel like a victim you likely will end up as one. Right or wrong saving for retirement is on you, deal with it.
Drink your own flavor of Kool Aid
I love index funds and ETFs and use them extensively throughout my practice. They comprise the majority of the assets for which I provide advice. I don’t, however, use passive index products exclusively. There are solid actively managed funds that in my opinion warrant inclusion in some client portfolios.
There are some folks out there who have an almost cult-like devotion to indexing and John Bogle. Mr. Bogle deserves all of the respect and admiration that he gets and then some. My point is that no single way of doing things is always right in all cases. It’s OK to mix and match funds, ETFs, active, and passive strategies, as well as other vehicles as long as they fit your financial plan and your needs. Don’t let anyone put you down because you disagree with their way of doing things.
Focus on the future, don’t dwell on the past
The past is in the books. Maybe you didn’t save enough perhaps you invested in all of the wrong places. Perhaps you had a greedy “financial guy” whose focus was on selling you products that enriched their bottom line at your expense. Don’t forget your past mistakes, learn from them, but don’t dwell on them.
All you can do in the financial planning and investing world is move forward from wherever you are now.
- Find a fee-only financial advisor who puts your interests first.
- Get a financial plan in place with appropriate goals and strategies.
- Review your investing strategy.
- Beef up your retirement savings.
- Manage your career.
- Take charge
Our retirement savings system puts the responsibility for accumulating enough for retirement on us. Get in the game make sure you have the right mindset and attitude to be successful.
Please feel free to contact me with your financial planning and investing questions. Check out our Financial Planning and Investment Advice for Individuals page to learn more about our services.
For you do-it-yourselfers, check out Morningstar.com to analyze your investment holdings and your portfolio. Please click on the link to get a free trial for their premium services. Please check out our Resources page for links to some additional tools and services that might be beneficial to you.
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