In this illustration the blue circle represents your entire retirement nest egg. The wants portion of that retirement is always going to be more than your actual needs, but it’s always wise to determine what those needs are going to be before it’s time to retire. The yellow triangle represents the needs portion of your retirement money. Obviously your needs will b
e less than your wants, but because those needs must be met before wants are even considered, it is vital that money to be used to meet needs is set aside and then kept safe within the retirement nest egg. In other words, lock it down so that it will be there for the rest of your life. Knowing what your financial “needs” will be and that they are taken care of should give you some flexibility as to how to invest the rest of your nest egg.
For example, if you want to gamble with the “wants” portion of your retirement money, that’s your choice — there will just be less money to have fun in your retirement years if things go bad. But you can’t gamble with what you need to take care of yourself in your old age. You would be surprised by how many people refuse to even consider what their basic needs will be and how many are willing to gamble with their entire nest egg to try to make more. Don’t be one of them. Lock down money for your needs now, while you have a chance.
There are only three ways your retirement money can go: Up, down, or even. Which direction are you most concerned about? If you say, “even” then I can help you with that, meaning I can introduce you to several options to help keep your retirement money safe and not subject to market risk. If you want your money to go up in value, then just be sure you aren’t gambling with all of it. Remember, use the “wants” portion for this. It really is very simple, up, even or down and decide how much of your money you do not want at risk.
Take care of your needs first and eliminate the downs and you will have a wonderful retirement plan. Let me know if you have specific questions as to how to take care of the down. Contact me at firstname.lastname@example.org or call 801-244-5756.