Where is the Finish Line?

Where is the Finish Line?

If you have ever registered to run in a race, one of the first questions is, “how far is it?”   Most of us, especially if we are not active runners, would be scared to learn we need to run a 26.2- mile marathon when we thought a 5k race, 3.2-miles, was already a big deal.   Planning for your retirement can feel the same way.

When is enough?   How do you know that your retirement nest egg is adequate?   Unlike road races, where the distances are pre-determined, we each get to set our own race.   When planning your "ideal life", as I like to call it, you decide what your retirement will look like.   You can do some things to achieve tremendous success and “run a good retirement race?”

  • Begin With the End in Mind – Dr. Stephen Covey, the author of Seven Habits of Highly-Effective People, included this as one of the critical habits.   Goal setting is crucial in a solid financial plan.   If you begin your retirement planning process with a well-established goal, it will be more successful.   Elements of a decisive goal include:
    • Name – Apply a compelling name to your goal, so there is emotion in the plan when you say the words.   This is powerful and should not be underestimated.

    • Date – When you put a date on your goal, you are putting some definition in place.   This is akin to deciding how far you are going to run in a road race. 
    • Amount – How much will it cost for the goal?  This is crucial to a successful financial plan.

An example might look like this—Financial Freedom by June 30th, 2025 that will provide $10,000 a month of spendable income.

Think about your goals regularly.   Who will you be with when you are experiencing your goals?   What will you be feeling?   Keeping these thoughts in your mind regularly will help you do more activities (e.g., watching your spending, saving more, etc.) that will help you be successful.

  • Benchmark Your Present Financial Reality – Before you get to the finish line, you must begin at the starting line. What have you assembled for your financial journey?   Do you have a pension, 401(k), Roth accounts, taxable investments, Social Security, and cash savings?   How is your investment diversification?   What about your tax diversification? Are all of your retirement dollars in tax-deferred accounts that will be taxed upon withdrawals, or have you added tax-favored accounts along the way?  Do you have much debt?   What kind of debt, and what are the payments and interest rates?  Establishing where you are now, financially, sets the stage for determining what you will need to arrive successfully at the finish line.

    Bridge the Gap – After you have established your goals and benchmarked your present financial situation, the math exercises begin.   When you factor in investment assumptions, inflation projections, life expectancy, tax rates, and many other factors, you can start to determine what work remains for a successful plan.   You are striving for a financial program that provides evidence that you “won’t run out of gas” before the race is finished.

 “It always seems impossible until it’s done.”

Nelson Mandela

  • “What If” Planning – Even the best financial goals and plans will need modification.   Your life has likely changed multiple times from where you initially thought it would take you.   Considering alternative outcomes can be very powerful in your plan.   “What if I work three years longer?” “What if we buy a vacation home?” “What if I take Social Security earlier or later?” All of these adjustments will result in significant changes to your plan.   The more confidence you have that your plan will withstand changes provides a mental boost when events or markets change in the future.   For a runner, this is akin to training in hilly conditions, even when you primarily run in a flat area.   Eventually, there are always hills we must conquer. 
  • Probability of Success – Testing your plan is the difference-maker that may keep you out of trouble well before you get to it.   Many retirement calculators use static assumptions (e.g., average rates of return, constant spending, etc.) when reality reminds us that most things change and change with regularity. It is often quoted that the S&P 500, one measurement of the investment markets, historical rate of return is approximately 10%.   The chart below proves the return of the market is neither predictable nor constant.   Some years that market provides extraordinary returns, while many years are muted or negative.   This becomes even more important when you consider the cessation of new investment contribution, and the withdrawals for lifestyle expenses, in retirement. 

 Market results

  • Don’t Forget to Cross-train – Runners often train to do other activities (e.g., cycling, weight lifting, swimming, etc.) to strengthen their muscles and reduce injuries.   In your financial plan, it is easy to fixate only on your investment portfolio.   While that is a critical part of your plan, it is not the only part.   You also will want to cross-train by looking at risk management, cash management, budgeting, estate planning, and tax planning.   This holistic approach will provide you a well-rounded financial plan that will hold up better against threats (e.g., increasing medical costs, lawsuits, severe property damage to your home, the negative impact from taxes, etc.) beyond just the investment markets.

By preparing for your “retirement race” using these approaches, you will build financial endurance.   You will live each day with more confidence, and when the challenges arrive, and they always do, you will respond better and manage your emotions when many other “retirement runners” are wilting.

Serious runners train to have great races.   You will even hear runners discuss the “runner’s high,” which non-runners roll their eyes.   But, there is little doubt well-trained runners will fare better in a long race than someone that never trains.   Your successful financial plan is no different.   If you set reasonable goals, have a proper “training plan,” aka financial plan, and then challenge that plan to consider multiple outcomes, you can arrive at the finish line feeling great and prepared to live your ideal life.   Can you already hear the crowd cheering for you? I know I am cheering for your success!

What does a comprehensive financial plan look like?


Commonly, athletes hire fitness coaches that enhance their training programs and give them a competitive edge. In the financial world, a Certified Financial Planner is your financial coach and can construct a “training program” to provide you with the winning edge in your retirement race.  If you want to learn more about our "coaching" services, let's have a conversation.

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