Retirement just doesn't happen on its own

One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? She asked. Where do you want to go? was his response. I don’t know, Alice answered. Then, said the cat, it doesn’t matter. Alice in Wonderland, Lewis Carroll, English Author, 1832-1898.

In the next 10 to 15 years there are 77 million baby boomers planning to retire. Seventy-five percent will face unexpected financial difficulties, including having to go back to work.

Unfortunately, many people won’t realize how ill-prepared they are for retirement until it’s too late. You don’t have to fall into this category. Take the time today to take stock of your life and work to be part of the 25 percent who will realize their dreams.

The road to successful investing is paved differently for each of us. One investor’s road may have curves, turns and bumps, while another’s may be steady and straight. Common to both however are a few basic principles that remain true no matter which road you take.

Discipline is required to obtain financial success. As with many things in life, the trade offs of short-term gratification for long-term substantive results isn’t always easy, but the results are worth the effort.

Start with a financial checkup. Think of taking a snapshot to provide a clear picture of where you are today; your present reality. Find out what you have to work with and the shape that your current portfolio is in. Do you need to save more, re-allocate your assets, add more growth or income investment vehicles?

Speaking of vehicles, before a road trip I always check over my car. When my husband and I take out our RV for extended travel we have a detailed checklist we run down to avoid any potential problems that could interrupt our plans. The checklist procedure has saved the day enough times that it’s now a habit.

The culmination of proper planning is peace of mind and a sense of security that allows us to follow our dreams without the worry of financial insecurity.

This past week I was fortunate enough to see two individuals experience a sense of excitement while describing the realization of their dreams. One person already enjoys early retirement and will soon be traveling to Europe; another family will embark on a cross country road trip visiting family and friends along the way. How were they able to reach these goals? It didn’t happen overnight. Here are a few suggestions that may help you join the 25 percent of retiring baby boomers who’ll enjoy financial success, however you vision it.

Define your goals. Commitment is half the battle. Writing them down, both short-term and long-term. Document your progress by updating them at least once a year.

Start now. Procrastination is our worst enemy. Though there’s no perfect time to start investing, so now may be the best time of all.

Invest in what you know. If you don’t understand how an investment works, how will you fully understand the risks associated with it? Is it worth placing your hard-earned money in this type of investment? No.

Don’t forget inflation and taxes. Inflation and taxes decrease purchasing power. Consider investments that minimize the impact of taxes and inflation when appropriate.

Be true to yourself. Your portfolio design should be based on your goals, time horizon and risk tolerance. Understand that what may work for your friend, cousin, or co-worker may not work for you because one size does not fit all.

The more the merrier. Diversification of your investment assets may bring the positive benefits of reduced risk and stable returns to your investment portfolio basket.

Time, not timing is your friend. Trying to correctly predict the ups and downs of the market is a risky, if not impossible, task. Most of us fare far better by keeping investment assets in the market the entire time. It’s time in the market, not timing the market.

Know when to fold ’em. Many of us don’t know when to get out of an investment. If it’s heading south and most likely won’t return to previous form, face the music and consider getting out before your lumps get too big.

Seek the advice of a qualified financial advisor for coaching through the ups and downs of the emotional investing roller coaster and remain focused on long-term goals.

Diversification does not ensure a profit or protect against a loss. Investments are subject to market risk, including possible loss of principal.

Darcie Guerin is a financial adviser and branch manager at Raymond James & Associates Inc. at 606 Bald Eagle Drive, suite 401, Marco Island. Contact her at Darcie. Guerin 

@raymondjames.com, 389-1041 or toll-free (866) 343-0882.