You've likely heard it said that planning for retirement is like steering the Queen Mary across the ocean. You start off. Then you make mid-course corrections to ensure you reach your destination.
If that analogy doesn't do much for you, that's understandable. The Queen Mary, a luxury ocean liner built in the 1930's, last sailed in 1967. It's moored in Southern California. It's an iconic attraction, a hotel and venue for special events. It's allegedly not even supposed to be named the Queen Mary.1 You probably have never had the opportunity to steer a large ship, much less one as old and as immobilized as the Queen Mary. An analogy that's hard to relate to isn't powerful.
But the concept of mid-course corrections is an important one in planning for retirement.
Many variables are beyond our control. Markets don't always go up. The unexpected happens: job losses, unanticipated expenses, kids coming back home, etc. Life, especially one's financial life, can be unpredictable.
That much is unforeseeable shouldn't absolve us from taking responsibility for making adjustments over those factors we can control. We shouldn't let our financial life bounce around like a ball in a pinball machine, ricocheting back and forth as circumstances slam us up or down.
Taking care of one's health may be a better analogy. And at the risk of too much information, I'll illustrate the point with a personal story.
Growing up in the Midwest in the '50's and the 60's, we didn’t pay a lot of attention to nutrition. Meat and potatoes, soft drinks on special occasions, fast food as it became popular, trips to the Dairy Queen for ice cream treats—these are some of my childhood food-related memories.
And I wasn't particularly athletic. I didn't enjoy team sports or exercising. So, I was a chubby kid. In the '60's, smoking was cool, and as I headed off to college, I took up the habit. A few years later, as a recent college grad, I was overweight, and hypertensive. I was disqualified for the draft.
But mid-course corrections along the way changed the trajectory.
My wife's first husband, natural father of our oldest daughter, passed away at 30 from cancer. Before we married, three years after he died, I resolved to stop smoking. Jessica didn't need to lose another father to cancer.
At the age of nine, Jessica was diagnosed with lupus, an incurable autoimmune disease. My wife got more serious about our family diet. No more fast food. Watch the salt. Eat healthy.
Eighteen years ago, I participated in a health fair. I discovered I had elevated cholesterol levels. That led to medication and annual check-ups.
A few years later, I started training for marathons and half marathons. I addressed a midlife crisis in a way that was cheaper than a sports car and safer than an affair. But it got me off the couch and helped with the weight.
In financial planning, there are many external factors that impact the success of one's journey from accumulating wealth, to living off one's wealth, to leaving some part of your wealth to heirs or charity. It's easier to be successful in a bull market than in a bear market. But many of those external factors are a matter of the presence (or not) of luck or good fortune. One can't count on good fortune to see us through our life's journey.
But there are areas we can control—how much we save, how much we spend, how diversified we invest, the cost of the goals we aspire to achieve. These are adjustable variables, the importance of which is often overlooked. Periodic reviews of a financial plan enable you to make mid-course corrections, small but important adjustments in the areas you control. Such adjustments can change the trajectory of your journey, replacing disappointment or despair with hope and confidence.
Over the years since her initial diagnosis, Jessica has dealt with her disease with courage and tenacity. She's gotten her MBA, her MRS., and has a good career in the oilfield services industry. But the disease has taken a toll on her kidneys, and now she really needs a kidney transplant.
The mid-course corrections I've made over the years, along with good fortune and blessings from on high, will permit me on June 12, 2019 to be the donor of the kidney my daughter so desperately needs. We'll have kidney transplant surgery at Houston Methodist Hospital, and hopefully, Jessica and my left kidney will become lifelong friends and enjoy restored health together.
I certainly can't take credit for it all. We've benefited over the years from clean water, high quality food, good medical care, health insurance benefits, and much more that many deserving people around the world have not had.
But as I look back on all the variables that have come together to permit what we hope will be a very happy outcome, I am convinced that mid-course corrections have been critical to our success.
If you're not sure whether you're on track on your financial journey, give us a call and together, we'll determine which, if any, mid-course corrections would give you the confidence you seek that you'll arrive at your financial destination successfully.
1 Legend has it that officials from Cunard Line, the builders of the ship, following protocol, went to King George of England to ask permission to name the ship after Queen Victoria, the King's grandmother. Upon being told simply that the ship would be named after "England's greatest queen," the King is reported to have said "My wife (Queen Mary) will be delighted that you are naming the ship after her." Source: https://www.queenmary.com/history/