Don’t takeoff until you have checked the fuel level!

Jul 14, 2014

“This is your pilot speaking. Welcome aboard… please fasten your seatbelts and prepare for takeoff…  Our flight time today will 8 hours and 47 minutes… We will be landing  at 11:43 p.m. local time and during our flight today,  we expect to level off at an altitude of 11,000 feet… the weather ahead is clear , however  head winds may cause us to adjust our course  to avoid anticipated turbulence.”

You are settled comfortably in your seat. You’re relaxed, calm and ready for a safe flight to your favorite holiday retreat. Your thoughts are focused on the fun and relaxation that awaits you at your destination.  You have not spent a single second wondering: Does this plane have enough fuel to make it to our destination?

You are confident that someone has already done the calculations. They have taken the flight’s length along with altitude, speed, headwinds and any potential detours into consideration.

The trust you’ve put into the airlines to take care of these things is backed up by the regulations that keep the company in check and the knowledge that if they fail to do so, they will ultimately be held accountable, with severe consequences, if the plane should go down.

We put this kind of trust in people and institutions all the time. They have been required to develop a comprehensive, time tested system with effective checklists to make sure every possible variable has been considered.

When it comes to retirement, leaving the work force compares to a plane lifting off the runway. With that in mind, people should be able to feel a great deal of confidence that their savings and investments will be able to afford them to be comfortable for the entire second half of their life.

Unfortunately, the vast majority of financial planners are unwilling to assume the responsibility of ensuring you will safely complete your retirement journey. Unlike the airlines, the financial services industry do not see themselves as being responsible for answering the important questions such as: How much is enough? How long will the money last? Have we covered all of the contingencies?  Will I outlive my money?

The financial services industry is satisfied with merely delivering solutions that will make us ‘Better Off’.  These solutions may get us closer to our destination – but is that what we are really looking for? Before we leave the security of our pay check behind are we not entitled to a time tested system with appropriate checklists to provide us with the confidence and peace of mind that we will not outlive our accumulated savings?

While all other industries are forced to do everything in their power to keep us safe and secure, the financial services industry has been not been held accountable to ensure that  unwanted outcomes are avoided. At the very least, they should be held responsible for warning us of outcomes that can be fairly accurately predicted?

The danger of outliving our money has been magnified by the fact that most of us are relying on the out of date retirement targets of previous generations. The retirement challenges for Baby Boomers are unprecedented because we are:

  • Leaving work earlier than ever before.
  • Living longer than ever before.
  • Expecting bigger lifestyles than ever before.
  • Saving less than ever before.

If we use the flight from New York to San Francisco as a proxy for the retirement journey of previous generations, then the distance of the retirement journey for Baby Boomers is better represented by the flight distance from New York to Hawaii.

If we continue to rely upon the simplistic Better Off” approaches employed by the financial services industry and fail to take the new longer distance of the journey into account, then metaphorically speaking, there is a pretty good chance that our retirement plans will crash into the Pacific Ocean.

I would love to hear your thoughts and opinions. How confident do feel about your financial future? When it comes to answering the questions: How much is enough? Do you have a substantiated dollar target that you are aiming to achieve? How confident are you that the number is correct?

Have you and your financial advisor been avoiding these questions altogether?

This blog was put in place to provide a forum to open up discussions about how we can build our confidence and achieve the peace of mind that we are going to be okay before we leave the safety and security of our pay check behind.  It is my hope that as a result of the dialogue created at this blog, we will be able to help more people to enjoy a fulfilling second half of life. I encourage you to reach out to other like minded individuals and direct them to this forum.