Are You Talking Yourself Out of Saving? ~ YOUR MONEY WITH ALEX TALCOTT

By: Alex Talcott – June, 2017

Alex Talcott, Vaura ConsultingSaving for – and even thinking about – retirement can be overwhelming. While it’s natural to worry about your financial future, be careful not to let preconceived notions prevent you from saving for tomorrow. My wife is a therapist by trade, so we talk about the kinds of things that challenge people fully aware that action is needed to get where they want to get in their lives. If you find yourself having one of the following doubts, consider reframing your thinking. A shift in perspective may be what you need to get on the right track.

“Retirement is a long way off.” It’s easy to get wrapped up in your current financial obligations, telling yourself that you’ll prioritize your retirement next year. However, like many worthy aspirations, a sound retirement plan takes time and discipline to achieve. If your financial independence seems far away, remind yourself of the power of saving early. Time allows you to tackle your retirement goals in smaller increments with the potential for compounded growth. Retirement ages will likely come to you and peers faster than you think, and your future self will thank you for planning ahead.

“I’ll prioritize retirement after paying for my child’s education.” With the long rising costs of college, it’s understandable and even necessary for you to help your child obtain a quality education. However, your nest egg should be the top priority. Once you reach retirement, you have limited options if your savings come up short. Alternatively, your child can secure financial aid to pay for college, including scholarships, grants, work-study programs and loans. You simply don’t have options like these to help fund your retirement. While retirement deserves the most attention, you can devise a strategy to simultaneously save for both important goals.

“My retirement dreams are too expensive.” If your dreams of traveling through Europe or starting a new hobby seem expensive, give yourself a reality check. Start by comparing your dreams to your current nest egg. Calculate (or seek help calculating) the amount you need to maintain your lifestyle, cover potential unexpected expenses (such as healthcare) and achieve your retirement bucket list. If your savings come up short, create a plan to fill the gap. Lofty dreams will force you to ask the tough question, “Do I want to adjust my current lifestyle to achieve this retirement dream?”
“I won’t be able to retire when I want.” It’s true that more Americans are working longer and delaying retirement. Some simply prefer to remain active contributors in the workforce, but many others are forced to postpone retirement until they accumulate sufficient resources to retire comfortably. If you dream of retiring early, carefully assess whether your nest egg is sustainable over several decades. You’ll want to make sure the money you withdraw in the early years of retirement doesn’t put you at risk of outliving your assets.

“I can’t afford to save.” If this phrase comes to mind, give your self-talk a flip. It may already be obvious to you, but instead think “I can’t afford not to save”. Setting aside even a small amount of money each month can make a big difference, as your assets can grow with the benefit of compounding. Get expert advice on where and how to save. Then consider increasing your monthly contribution to continue to build.

“My family will help me.” Perhaps you’re expecting a generous inheritance, or hoping that your adult kids will provide a financial cushion if you experience an unexpected expense. Regardless of who you believe may come to your aid, it’s best to take your financial security into your own hands. Life is full of uncertainties that could impact the bank accounts for both you and your family members. Knowing your future is under financial control may give you, your children and your parents peace of mind.

It’s not too late to correct misconceptions about the importance of saving for retirement. Consider working with a financial advisor to create a plan for your future. Together you can determine your savings targets and explore a wide range of strategies to meet your financial goals. It’s time to talk yourself back in to retirement; you deserve it.

Alex Talcott, JD, is a Financial Advisor with Ameriprise Financial Services, Inc. in Portsmouth and Bedford, New Hampshire and Middleton, Massachusetts. He specializes in fee-based financial planning and asset management strategies and has been in practice for 10 years. To contact him: (603) 319-3108; 25 Chestnut St., Ste. 300N, Portsmouth, NH, 03801;
Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.
Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2017 Ameriprise Financial, Inc. All rights reserved.