Let's Pump Up Your Retirement Fitness

Let's Pump Up Your Retirement Fitness

Saturday Night Live characters, Hans and Frans, were made famous for saying, "we are here to pump you up!" They were over-the-top characters.   They tapped into America's psyche, which is on a perpetual race to get in shape or lose weight. Right along with the physical fitness desire, many Americans pledge to improve their financial fitness. If you hired Hans and Frans to train you, they would likely focus on strength and balance.   Having power and balance go a long way in helping your physical being, but these attributes can also improve your financial situation.

Physical fitness training would prepare a list of exercises to improve your strength and balance.   Likewise, there are some steps or practices you can take to being more financially fit.

  • Investment Diversification
    • We all know the adage, "don't put all your eggs in one basket." In group presentations, I can start that phrase and count on most attendees to finish the sentence.   However, all too often, we forget this as investors.   It is easy to ride a "hot" investment longer than we should or get in on the media-darling investment and add a helping or two to our financial plate.   Before long, portfolios can morph into something far from their origin.

    • Investing needs to be even better defined.   Is your investment approach linked to your financial goals?   Do you have investments allocated across a timeline aligned when your goals require funding? If so, are you taking the appropriate risk for each of these segments of money?   If your goal requires funding in the next 12 to 24 months the stock market is not the place to invest.   On the other hand, the money you won't need for 15 to 20 more years should not be in "safe" assets like bonds and cash.
  • Tax Diversification
    • Just like investing, you need to have good options from a tax standpoint.   For decades, we were hardwired to use tax-deductible and tax-deferred investments for our retirement savings.   That made so much sense.   However, what if taxes go up in our retirement?   When you look at this chart below about the United States' debt-level, it seems likely that taxes will increase to address larger budget deficits and ballooning debt.  

Federal Debt                                                                                                              Source: JP Morgan "Guide to the Markets"

    • When your fitness instructor works on your strength and balance, you will probably hear some mentions about maintaining flexibility.   In your fiscal fitness plan, you also want flexibility – tax options.   If you have IRAs and 401k(s), plus taxable funds and Roth IRAs, you will have choices in retirement on how to withdraw money in the most tax-efficient way.   Without these other tools, you become one dimensional and an easy target in increasing tax environments.


  • Protection
    • Your trainer may mention a proper diet and vitamins to fend off illness and injury.   In your financial plan, you know there will always be threats to knock you off course.   Make sure to review your risk management posture thoroughly, and, where insurance is necessary, confirm you have adequate protection.
    • While not an exhaustive list, these are some things to consider:
      • Do you still need life insurance?
      • If you are continuing to work, do you have disability insurance?
      • Maintain high liability limits on your autos, homes, utility vehicles, and boats.
      • Protect your identity by using credit freezes and many of the ideas shared in our Cybersecurity and Hack-Proof Your Smart Phone webinars.

  • Understand Social Security
    • For many Americans, Social Security is their only non-market-based income source.   The days of the defined benefit pension plan may be numbered.   More Americans have a retirement foundation of 401(k)s and IRAs. This makes Social Security that much more significant.   Growing your benefit to the maximum amount could increase the probability of success for you in retirement. Moreover, if your spouse had considerably lower working wages than you, growing your benefit so the spousal benefits are larger, may be essential.  

Click to learn how to avoid losing significant income in retirement.


Getting and staying in physical fitness shape takes an approach and discipline and financial fitness also needs a similar dedication level.   The rewards will be great when you have reached the milestone of peak financial fitness.   But, like physical fitness, you cannot get the desired goal overnight.   Instead, it is a journey over time that yields the results you seek.   If you need any help along the way, "we are here to pump you up!"