Retirement is a Marathon, Not a Sprint!

The stock market goes up – and then it goes down.

 

Sometimes it goes up without hesitation, like it did in 2017, when the biggest drop was only around -2%.  Now that’s a great year!

 

On the other hand, sometimes it goes down low & slow, like cooking a delicious brisket on the smoker.  The problem is, “low & slow” isn’t so tasty when we’re talking about our hard-earned retirement dollars.

 

No matter what happens in your life, the stock (and bond) market is likely to be joining you on your journey to, and through retirement… and along the stock market’s journey northward, there will always be times when it works against you.  Sometimes it’ll be big, sometimes small.  Sometimes good, sometimes bad.  Sometimes fast, sometimes slow.

 

…but it will always be with you, assuming you’re one of the very large majority of people who will need to have a portfolio invested in assets aimed at keeping up with inflation over the next several decades (especially considering how much debt we’ve amassed as a country at this juncture!).

 

So, when we think about our retirement plan, estate plan, and our investment portfolio, we have to force ourselves to have a long-term outlook.

 

Retirement is not a sprint.  It’s a marathon.  One could even argue it’s one of those “Ultra Marathons,” considering how long we humans live these days, and for how long we need to stretch our hard-earned retirement savings, but I digress…

 

Allow me to build a story:

 

In your personal “Retirement Marathon” think of the weather being equivalent to the stock market.

 

  • If you’ve ever run outside before, then you know when the wind is at your back, it’s incredible! This is what it’s like in your retirement portfolio when the market is going up.

 

  • There are times when the wind is in your face – and it’s absolutely awful – even a 10MPH breeze in your face feels like someone is holding you back. This is what it feels like when the market goes through a pullback, correction, or long-period of volatility and choppiness.

 

  • Then there are times when, in your retirement marathon, you experience a torrential downpour.  Thunder, lightning, and tornado sirens start going off.  It can certainly make sense to “head to shelter” during these times in order to avoid a catastrophic, life-changing loss in your retirement portfolio, but you can’t quit the race!  You have to get back out there and start jogging again…

 

  • …because putting one foot in front of the other? That’s the equivalent of saving for retirement and/or spending your money when you’re already retired.  If you sprint when you spend, you’ll get exhausted (and so will your pocket!).  If the weather causes you to leave the race (stop saving) and call a friend to come pick you up, you’ll never succeed in your “Retirement Marathon.”

 

The only way that you will succeed is if you 1. Build a plan, 2. Put one foot in front of the other, no matter what kind of weather the market throws at you, and 3. Stick to the plan.

 

When times get tough (and they will, more than once), you should seek guidance from your “running coach,” who is there for you to offer mental and moral support.  This person – ideally a fiduciary financial planner – can help get you into running shape, get you conditioned, trained, diagnose your financial injuries, offer treatments, therapy, and perform the necessary financial surgery needed, when necessary.

 

While running an actual marathon takes a lot of physical and mental strength, money… retirement planning is a very emotional thing.

 

So, whenever you see something on the news, on the internet, or on the radio that makes you want to question whether or not you want to keep running, try to remember this analogy.  Once you have a plan in place, even when the biggest crises occur, you can always go back to that plan, check-in, and get the reassurance that you’re going to be okay.

 

From there, try to focus on putting one foot in front of the other.  Keep a steady pace, enjoy the scenery that life has given us all, and always know that your “running coach” is there to ensure you don’t abandon your plan and instead, relentlessly stick to the roadmap on your personalized retirement marathon.

 

Till next time…

Adam

Categories: Adam Koos, CFP®, CMT®, Educational Articles

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