Going in Style is a 2017 remake of a 1979 comedy, this newer version starring Morgan Freeman, Alan Arkin, and Michael Caine. These three older guys are victims of a corporate restructuring that eliminated their pensions. With pressing health and financial issues, they plan a bank heist to reclaim their lost money. While the film is a comedy, it essentially depicts financial desperation with a smiley face. It’s fun to laugh at their antics, but not so funny when the subject hits close to home. In the most basic terms, individuals who seek our guidance want to know just one thing: Will I run out of money?
In today’s world, traditional pensions cover fewer than 25% of individuals currently in their 50’s. In its place, personal savings, 401-k type plans, and Social Security are primary retirement resources.
Sure, some individuals may inherit money. But the oft-touted multi-trillion dollar generational transfer of wealth, talked about for 25 years or more, has not been nearly what “experts” projected. One of the reasons these wealth transfers haven’t been as large? The older generation has lived longer than expected. This same reason also works against those still preparing for retirement. Increasing longevity makes the financial hurdle much higher.
What’s in Your Control?
Determining if you are on the track to financial success (your money will outlive you) or financial failure (you will outlive your money) depends on several factors. Some of these variables are within your control and others are not.
The most important input that you control is how much you save. A close second is how long you will be saving. Last, but certainly not least, is how you behave. That is, how you react to surprises and events outside your control along the way.
It Is Not About the Market
Noticeably absent from the list above is market performance. Short-term performance clearly falls outside your control. Near-term performance doesn’t matter much as long as you have a sound long-term strategy.
Sometimes investors cast blame at the market for not achieving their goals. It’s always a mistake to blame things you can’t control. Instead, put the blame squarely on the shoulders of things you can control.
Following a goals-focused philosophy greatly increases the likelihood that you won’t run out of money. As Professor Jordan Peterson says in his excellent book 12 Rules for Life: An Antidote to Chaos, “Pursue what is meaningful, not what is expedient.” Ready for a real conversation?