Football season has arrived again and millions of fans are building their fantasy teams, talking strategy and arguing about which teams are in the best position to make it to the Super Bowl.
Football debates can go on for hours, so let’s take a quick time-out to focus on what America’s pastime can teach us about winning “The Retirement Game”.
Just like in football, financial penalties can seem like they are coming out of nowhere (“What are game are you watching, ref??”), but a little bit of careful planning and awareness can keep you from being sidelined by unexpected expenses and life events.
4 Penalties to Avoid in the Retirement Game
Holding is the illegal restraining of a player on the opposite team who is not then in possession of the ball. It’s one of the most common penalties; players often resort to holding their opponents because they’re outmatched and they may panic. Offensive holding results in a 10-yard penalty, and defensive holding results in a 5-yard penalty and automatic first down.
The Counter – Don’t be afraid to get in the game
If you feel outmatched by your financial situation, don’t panic. There are a few plays you can make. Your 401(k) is a good place to start. If your employer matches contributions, make sure you are contributing enough yourself to get the full amount from your employer. Otherwise, it’s like throwing away free money! It’d be like throwing a football game on purpose! If you’ve maxed out your 401(k) contributions, you can look into other accounts, such as an IRA or Roth IRA to save even more. Ideally, you want to be saving 10 – 15% of your income for retirement.
In football, a delay of game often happens when the offense doesn’t start a play on time. The offensive team is penalized 5 yards for a delay of game.
The Counter – Start saving now
A lot of people are delaying the Retirement Game without realizing. In fact, about one-third of Americans approaching retirement age say they’ll delay retirement and continue to work full time or part-time. But for many Americans, working into retirement is not an option. They are forced to leave work earlier than expected because of a health problem, disability or change within their company. It’s important to take this into account when setting your financial plans. You can earmark income from a part time job for fun things like travel and entertainment, but don’t count on that money for your necessities. Don’t penalize yourself with a delay of the Retirement Game, start saving early.
*Source: Chicago Sun Times 07/04/17
The intentional grounding penalty is called when the quarterback purposefully throws the football to an area of the field where there is no chance a receiver could complete the play. This occurs when plays fall apart and can’t be carried out as planned. The quarterback is usually sacked, and the offense must start their next down further from the touchdown zone.
The Counter – Create a plan that reaches the goal line
You can create a game plan for your finances by building a budget to track your income and your expenses. However, budgeting isn’t a one-time thing. You need to check in with your budget each month to make sure you’re carrying out your game plan and not spending more than you should be. Don’t let your retirement game plan fall apart, stay on top of your budget and you’ll land in the end zone.
In football, only eleven players are allowed on the field at once, in the huddle and at the line. This usually occurs when a team makes an improper substitution, and the offending team is penalized 5 yards.
The Counter – Only share the plan with key players
When it comes to your finances, you’ll want to keep the number of players involved low. Your finances should be on a need-to-know basis only. Hold monthly or quarterly money “huddles” with your spouse (and any adult children who should be made aware) to make sure everyone has a solid grasp on the game plan. And, of course, you’ll want to consult with your financial professional. Beyond that, be wary of letting anyone else influence your finances. Don’t try to keep up with friends, neighbors or relatives. Stick with what you know works for your family in the long run.
Reaching the Goal Line
Winning NFL teams start each season with one goal: To win the Super Bowl. Just like them, you should also set goals. By planning ahead and getting started early, you are much more likely to achieve the retirement of your dreams.
So, what does your dream retirement look like?
Some people want to relax with family, play lots of golf and get really good at playing cards. Others dream of traveling and exploring the wonders of the world, they want to see the Taj Mahal, ski in the Alps, and visit volcanic hot springs in Iceland. Maybe ride the London Eye, tear up at the Grand Canyon, or climb the Eiffel Tower.
Whatever your dream retirement consists of, the earlier you begin planning, setting goals, and budgeting, the better. Sit down with your spouse and decide together what you want your future to look like. Then, get started. By reading this, you’re already on your way to a Super Bowl retirement. Good luck.