mind the gap, then fund the gap
TRANSCRIPT
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Mind The Gap, Then Fund The Gap
False Expectations
Most retirement plans created for Baby Boomers predicted that the last decade of work before retiring would be a nice gentle ride.
We thought lofty incomes and kids leaving after college would allow us to accumulate a comfortable cushion for the leisure years.
None of this is happening.
The Great Financial Crisis
$Incomes for most people have not recovered to pre-2008 levels.
As of April, US job cuts in 2016 were at a 7- year high.
If you are forced to change jobs, new salary levels will be lower.
This is going the wrong direction.
The Retirement Fund GapA gap has developed between anticipated pay
needed to fund retirement and actual pay.
Your financial planner didn’t factor this in when
he ran your computer simulated retirement
plan.
Economic expansion is now late in the game,
and time is running out.
My Friend Jay’s PerspectivePeople are openly
panicked.
Family expenses are too
high.
In a good economy, pay raises come in at 1-2 points above
annual inflation.People are frozen, hoping this will change, but secretly know
it won’t!
Bonuses only pay down recent
debt.
Nothing is left to build a nest
egg.
You have a retirement account or some savings.
You need a strategy to generate more income.
Your productive years are ending.
Complacency may be your worst enemy.
You are just under-savingThe Best-Case Scenario
You’re rationalizing this as a temporary problem.
You need to go into survival mode.
It will take deep expense cuts to recover from.
You’re on the clock. This is a red alert.
You’re deeper in debt every monthThe Worst-Case Scenario
1Mind The Gap
Change your mindset and act on your
expenses.
Make new habits and lose
the old bad habits.
Commit to afinancial plan.
Get your family on board by walking the
walk.
Making a Backup PlanYou won’t feel comfortable until you have two
years living expenses in a safe bank account.
Identify someplace with a low cost of living
where you can stretch out your savings.
Go through the steps you would take if your
worst-case scenario happened.
You now have a plan, and a backup
plan.
$$The Income Gap
Baby Boomers are aware they will have an income gap.
We continue to see people delaying retirement indefinitely.
3/5 of older workers delay retirement for pay or benefits.
Almost 20% of Americans 65+ are now reported working.
2Fund the Gap
$$
Invest in mentors to help you expedite the
process.
Find communities discussing alternative income opportunities.
Leverage your job for all the benefits and
safety it affords you.
Develop a discipline to grow your skills
and knowledge.
Assess the strengths you can leverage.
Protect YourselfTrading time for money has inherent limitations beyond potential seismic shifts in the economics of careers and professions today.
You may have very relevant subject matter expertise, but be in the wrong circumstances to capitalize on it.
You should make money early in your career by what you do and then transition to making money by what you know.
It takes time and energy to shape it into a form you can monetize.
• Can leverage skills
• Are cheap to set up • Can maximize spending power
• Can be run inexpensively
Online Businesses
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