Do You Know If You Are Going To Make Any Of The 11 Biggest Retirement Mistakes Many Retirees May Make…That Could Cost You A Fortune And Jeopardize Your Retirement Security?

 

Because if you're not sure, you aren't alone!
 

I don't know if you know this or not, but according to the Social Security Administration 96% of Americans are not able to fund a retirement that will last for their lifetime…allowing them to live the lifestyle they wish to live! This is the case for highly compensated people as well as average wage earners.
 
Pretty scary stuff, when you think about it! Do you know why this is? Well, in our opinion, it's because people simply aren't given the proper knowledge of how to correctly handle their finances when they retire from the company, or when they change jobs! This is true, even though most retirees have accountants, lawyers, stockbrokers, company provided assistance, etc.!

It's frightening when you think about it, but your retirement doesn't leave much room for ANY mistakes. Right? I mean, this IS NOT A DRILL! This is your one shot at retirement, and you…Cannot Afford To Make ANY Mistakes! Period.

See, do you really know, (and I want you to be honest with yourself), EXACTLY how to make  the RIGHT decisions on issues like:
 

• With the price of the stocks all over the place, how do you decide if you should sell some or wait? If you want to diversify, which shares should you sell? What about the tax consequences? Should you buy traded options to protect the price? How should you handle your company benefits? Do you know how to decide what to do with your stock, and stock options?

• Should you take a lump sum distribution? If so, how? What should you do with it? How much in cash, how much elsewhere? Who should be the new trustee or custodian? Will your retirement distribution money be subject to IRS penalties you've never heard of? Should you receive money now or wait until later?

• Are you protected from traps the IRS has set, as well as from other retirement financial disasters that can actually cause you to lose much more than the IRS ever could take?

• What would happen if someone became ill and needed long term nursing care? Who pays? How much? What if you don’t have enough money? What does the government do?

• Do you know how to avoid having as much as half of your money being grabbed by the tax man?

• Are your assets titled in the absolute, most dangerous way? (Hint - Most retirees make this enormous mistake!) Have you set up a virtually bullet proof asset protection plan?

• What kind of insurance should you now have? Do you keep what you had, or change it? Are you going to be over-insured and waste money on needless coverage? Do you know how to figure out which choices will best suit your family's new situation? And most important…do you know if you will be likely to have enough money, after taxes, to live your life the way you wish to...for as long as you live?

Have you analyzed all the options and choices available to you so you can make educated decisions from a fully informed standpoint?
 
These are just a few of the questions you must have answers to! If you don't... you're likely to be the next victim of the greedy IRS, or to run out of money! If you make even one big mistake... look out! After all, you only retire once, so you cannot afford any mistakes! You must make the right decisions the first time!
 
These issues demonstrate how retirees are constantly at risk to see their retirement security and peace of mind diminish, or disappear all together.
 
The world is a much tougher, and unforgiving place than it was years ago. There are so many things to know. So many rules and regulations. So many pitfalls and traps.
 
The government wants as much of your retirement nest egg as they can tax their way into! Some  retirees will get hit with income taxes they've never even heard of! We've seen you get soaked with tens, or even hundreds of thousands of needless and completely avoidable income taxes! (Yes, even with a CPA "helping".)
 
Inflation, recession and the crazy markets are always lurking out there, inevitably waiting to gobble up more of your estate. Then there's the kids, or grandchildren, and their demands on your resources.
 
There's a lot to deal with.
 
And, let's face it. Who has the time to sit and read every tax law, investment option, insurance issue, and so forth? And, even if you had the time to read all this stuff, would you really understand what it means?
 
That's why we've prepared this step-by-step, down-to-earth report for you.
 
We wanted you to have an easy to understand set of facts, that cut right through all the baloney, and tell you the biggest mistakes retirees make...and more importantly, how to avoid them!
 

You Need To Know How To Avoid The Traps That Are Set For You!

 
So let's get into these important issues, and see if you're making any (or all) of these mistakes!
 

1. Listening To The Wrong People!

 
It never ceases to amaze us how many intelligent people take advice about their retirement from people who are totally unqualified to give you this critical advice!

For example, when we see retirement messes, (which we see virtually every day) and we ask where they got this information that has screwed them up so badly, we inevitably hear things like:

•             "My brother-in-law told me to do that. He used to be an accountant at Westrand Corporation, you know!"

•             "I asked the guy who's office was next to mine for all these years. I figured he must know what he's doing, since he's friends with the boss.

•             "I read an article by June Brant Queen in Newstime, that said all retirees should do..."

 

And so on. Everyone's got an opinion about what you should do with your retirement. Unfortunately, just because they are your relative, or are involved in some area of finance unrelated to retirement planning, (like the person at the bank who takes applications for checking accounts and CD's) or write articles for national magazines, doesn't mean they know the answers to your retirement problems and questions!
 
I cannot stress enough how important it is for you to work with a specialist in retirement planning that knows this area backwards and forwards, inside and out! Someone who knows how to integrate and coordinate ALL areas of your complicated financial situation and sort it all out for you!
 
After all, how many times are you going to retire? Shouldn't you be sure that the advice you're getting is right for you, and not generic, not given in the context of your ENTIRE financial situation…or just plain wrong?
 
Be sure to find a retirement specialist, just like you would look for a cardiologist if you had a heart problem.
 
Would you ask your brother-in-law or another executive to analyze your electrocardiogram? If not, why would you ask him to analyze your entire financial situation?
 
Doesn't that make a lot of sense?
 

2. Not Understanding The Tax Consequences For Investments, IRA's, Pensions, Etc.!

Another true story. Our clients, Perry and Edie, found out too late that the IRS demands you remove certain amounts out of your IRA once you reach age 70 1/2. (This happened BEFORE they became our clients.) Anyway, they were totally devastated when they were hit with all the penalties and interest when they didn't take money out of their IRA the right way. They had received information from the company's human resources department that was close, but not EXACTLY right. And, when they did what they were told, they got hammered. Over $21,000 in penalties and interest, all because they missed the correct amount required, even though they thought they did it right!
 

Their story is just one of many problems that retirees run into because of a lack of the proper knowledge about qualified retirement plans.
 

"Uncle Sam" Is A Relative You Should Give As Little As Possible To!

Other tax issues that retirees frequently get messed up on are:
 

• How much should you withdraw from retirement plans?
• When should you withdraw from the plans?
• Should you let qualified plan money sit inside the plan, and use other money to live off of?
• Is living off the income generated by investments one of the worst things you can do?
• Should you take a withdrawal from your IRA to pay off your car or vacation home, so you'll have lower monthly payments?
• Should you stop working at a certain time to collect Social Security now?
• Should you wait to apply for Social Security? Or, should you work part time? And, how does that affect your Social Security payments?
• What about the taxes on your Social Security income? Are there legal and safe ways to reduce it?
• What about the taxes on the interest in CD's or other bank accounts? Is there a better way to invest to reduce those taxes? Or, will living off interest, and leaving your capital untouched cause you to lose money because of inflation?

Or,....

I think you get my point.
 
There are literally dozens and dozens of tax decisions you must make, whether you want to deal with them or not!
 
Let's think about a simple example here. If you were to save $400 a month in taxes, simply by knowing the laws, and how to legally reduce your taxes, that's $4,800 a year you'd have that you didn't have before!
 
What could you do with an extra $4,800?
 
What about saving even more off of your income taxes? We show people how to do it all the time!

Could You Use A Few Hundred (Or A Few Thousand) Dollars Extra Cash Each Month?

If you want to make sure your income, estate and gift taxes are as low as legally possible, you need to work with a qualified retirement specialist, who can lay out all your options for you...allowing you to make an informed decision, as opposed to an emotional decision!
 

Or, worse, not even knowing you had to make a decision, like Perry and Edie who found out the hard way. Now, you may be thinking, "Well, I know about the required withdrawals and all that. And that's fine". But, what don't you know, that someone else does know?
 
When it comes to tax planning, there is little room for making mistakes. Don't try to know it all yourself, or depend on others who don't study these things every single day for a living!
 
Did you know that each and every year, there are thousands and thousands of tax rule changes? Some of them don't affect you, and others do! Last year, in the most complicated, ridiculous tax law we've ever seen passed, they changed over 1,100 Code Sections! Plus, the 1997 tax law alone created things like SEVEN types of capital gains when there used to only be two! In fact, the new law is so complex that you have a great chance of messing up your financial situation by overpaying your taxes without even knowing it! Recent laws have added even more complications and confusion.
 
The tax law is no place for amateur night. You HAVE to do proper tax planning BEFORE

you make even a single financial decision. Why? Because EVERY FINANCIAL DECISION HAS A GOOD CHANCE OF BEING AFFECTED BY THIS NEW COMPLEX TAX LAW!!
 
So don't play tax roulette, and hope your numbers hit. Make sure you are as sensible about your tax planning as you are about your health!
 

3. Choosing The Wrong Pension Option!

Let me illustrate this mistake with a real life example from a client of ours who was an executive at a company.
 
The client Louis, had retired a few years ago, and his wife, Janet, had not worked outside the home, and had no pension of her own. When Louis left the company, he was given a range of choices of how to handle his pension pay out if he were to die before Janet.

The choices were quite confusing, and they both decided to take the higher payout now, counting on the life insurance Louis had to cover Janet if he died. (With the help of Janet's sister's husband's brother, who used to be an accountant, of course.)
 
Anyway, Louis died just one year after retirement in a tragic accident. Janet was left with no pension income, but did get Louis' life insurance proceeds.
 

 
In a matter of only four years, Janet had to get a job because the amount of insurance money was way too low for her needs. See, what seemed like a fortune to them, isn't really a fortune in dollars and expenses.
 
What did they do wrong?
 
They made a critical decision like this from the seat of their pants, without having someone prepare a detailed financial projection of which option would best meet their needs, before making the irrevocable election!
 
If Louis and Janet had done this, she would be receiving a much higher income, and have the insurance proceeds to boot!

Now, does this mean that all retirees should take the lower pay outs and have the survivor get some sort of a pay out? No, not at all. There is no such thing as any strategy that applies to some or all retirees!
 
Your situation, is your situation. It is as unique as your fingerprints.
 
And just like no two fingerprints are alike, no two retirements are alike.
 
Please promise us you'll not take "canned" advice, particularly when it comes to monumental decisions like choosing a retirement pay out!
 

4. Misunderstanding What Medicare And Social Security Does And Doesn't Pay For!

 
We see it all the time.
 
One spouse telling us how shocked they were that the $4,000 a month nursing home expense for their very ill spouse, isn't covered by Medicare or Social Security.
 
"But I thought Medicare covered medical expenses!", they exclaim.
 

 
Yes, Medicare does cover medical expenses. But, it only covers certain ones, and only after you have paid a deductible!
 
Many, many medical expenses aren't covered by Medicare, and are usually picked up by a Medicare Supplement policy, or out of your pocket.
 
But, those supplements still don't cover extended nursing home care. Not a penny. Zilch. Nada. Zero.
 
Here again, we have an un-planned for situation that can literally wipe out a family's retirement nest egg, that nine out of ten retirees don't have any clue about!
 
Warning! (By the way, did you know that in order to qualify for state support from Medicaid, you literally have to spend your net worth almost down to zero first? You have to clean out all of your estate, assets, investments, and so forth until you are worth under $2,000! It's only when you're nearly flat broke that Medicaid kicks in to help you! This is not a solution that we recommend you implement!)
 
Don't make the mistake of thinking that Medicare or Social Security are going to take care of you. They don't!
 
Sure, they cover many things, but there are still huge, gigantic gaps that if you don't plan for yourself ahead of time, you'll never have them taken care of!
 
You must know what the government does help you with, and what they don't help you with!
 
And, you must have a plan to address the almost unknown areas that could cause your family some real problems! Don't wait until you've been completely wiped out before you figure them out!
 

5. Getting Caught By The New 20% Withholding Penalty For Lump Sum Distributions!

Are you aware of the tax law that has caught thousands of unwary retirees in its ugly web?
 

If you are retiring, or transferring a lump sum distribution from a company plan at a later time, and you don't follow the paperwork rules exactly right,  you could end up having 20% of your money withheld from your distribution!
 

And, to make matters even worse, you can end up paying taxes and penalties if you can't make up this 20% difference out of your own pocket!
 

 
For example, if you were getting a $200,000 distribution, and you had it go to an IRA, but didn't fill out the paperwork correctly, you could end up having $40,000 withheld from your transfer!
 
And, if you didn't have the $40 grand lying around to put into the IRA to make up for the withholding, you will be taxed on that $40,000, even though you didn't get the money! (Which could cost you anywhere from $6,000 to as much as $16,000 in taxes depending on your bracket!)

No, we are not making this up. This disaster was passed by Congress to nail unsuspecting retirees with lump sum distributions. Why? Because the government is looking for any way to get their hands on large chunks of money, that's why!

But wait. There's more. If you are under 59 1/2 years old, and this happens to you, you get to pay an extra 10% penalty on top of all the extra taxes! Yes, this is just one tax trap that is waiting to get a lot of retirees where it hurts the most, when they can afford it the least!
 
How do you avoid this?
 
Make sure that you get expert help in filling out the paperwork for making your choices of how to receive your lump sum! We cannot tell you how many times we've worked with retirees who thought they had it all figured out right, who did it on their own, or even with "help", and ended up really screwing up big time!

6. Owning Your Assets The Wrong Way!

One of the biggest mistakes we see is retirees who own their assets in ways that subject them to all kinds of unnecessary risks!
 
For example, the most common way that retirees own their home, investments, bank accounts, etc., is in joint tenancy with rights of survivorship.
 

While this is a simple way to own assets, in many cases, it could be a huge mistake!!!

Why? Well, some of the reasons are:
 

• You could pay way more in estate taxes than necessary! (We have an executive who came in to see us after his parents died, and wanted to know if we could help him save the 45% of his parent's estate being confiscated by the IRS, which of course was hopeless, since it was all after the fact.)
• If one of you has a liability problem (a car accident, for example) both of you could lose everything!
• If your marriage goes down the tubes, they can clean out the accounts!
• If your kids are on the accounts, if they go bankrupt or whatever, YOU could lose YOUR money!
• Many retirees put their kids on some of their accounts, which later ends up costing gift taxes, and can screw up your family's finances if someone goes into a nursing home.

Joint tenancy is, in many cases, a financial disaster waiting to happen!
 
(Now, we are not giving you any legal advice, just pointing out some potential problems!)

Some of our clients have Living Trusts they set up before coming in to see us, and think they've protected their estate. Not necessarily true! A Living Trust may help protect assets, but in may cases it does nothing to protect your assets from liability or other problems. In fact, most of the time, they don't even protect your assets from income or estate taxes!

See, many attorneys just listen to your situation and set up your wills, trusts, etc., without analyzing and coordinating all the issues you should consider and just set you up in a simple, but sometimes dangerous way! (For example, would you be surprised to learn that over 75% of our clients find out that the Living trust doesn't cover a large percentage of their assets because things haven't been titled properly…even though the client is "working" with an attorney?)
 
You have to take a look at the way you own your assets in the context of your whole financial situation, so you don't risk losing everything you've worked for because you've placed your assets in jeopardy!

Asset ownership is a serious yet often overlooked area that can turn into a gigantic mistake!    

7.  Falling into the Seven Deadly Investor Traps with Your money in stocks and mutual funds.

We call them deadly not because of a tendency toward violence, but because these traps rob and kill your retirement dreams, and massacre your peace of mind toward your portfolio.
 
There are various symptoms of being victim to one or more of the 7 deadly investor traps.  It usually can begin with a gut feeling that your money isn’t being prudently managed or something just doesn’t seem to fit.

If you are continually second guessing yourself or your broker about the decisions being made.  You may be always wondering and worrying if your broker or advisor has your best interest at heart if you are victim to one the traps.
 
Your portfolio may not seem to be performing like it should.  Maybe its flat in up markets and down in bad markets.  Or you feel that you were implicitly or explicitly led to believe you would get above market rates of return and it just doesn’t happen. You could be experiencing another sign of falling into the investor traps.
         
Falling victim the traps can be summarized by a massive state of confusion, fear, anxiety and stress in regards to your investments.  Once you realize one or more of these symptoms may describe you, the question becomes what are the traps and how do I avoid them?

Seven Deadly Investor Traps!!!       

1. Gambling with your money.  This is not to say all gambling is bad or all investing is gambling.  If you have extra income and can afford to go to Vegas or enjoy buying a lotto ticket go for it.           

Where I take issue is when people to it with there lifelong savings!  And a lot of times the investors aren’t even aware the big wall street firms are doing it.  The investing community likes to lead investors to believe they know what the markets are going to do next, but the evidence shows this just isn’t true. 

There are 3 main types of speculating and gambling with your money that you must guard against.  It begin with stock picking to try to pick the next hot stock or group of stocks.  Even if you buy and hold a mutual fund, a lot of times the manager is practicing stock picking inside of your fund.  On average American mutual funds turnover 100% per year.

This means your entire portfolio is bought and sold once a year, usually without your knowledge! The second form of gambling that often takes place is market timing.  This is when assets are moved into or out of a portfolio based on economic forecasts.  For example, because of a war your broker expects international stocks to perform poorly so you move all your money to U.S. assets. 

This doesn’t “feel” like gambling if seems like wise management but reality is losses can mount up much quicker with a concentration into any category. Prudence says to stay properly diversified (assuming you a properly diversified to begin with, which most people are not). The third and final form of speculation in your portfolio to be avoid is track record investing.  This entails going with the manager that had stellar performance in the past assuming that the results will continue.

Maybe it happens, but academic studies show the odds are against you in this scenario and more than likely market rates of returns won’t be achieved. All 3 of the types of gambling rely on some sort of forecast.  But we’ve seen “experts” time and time again get their forecasts wrong.  The truth is nobody knows with anything like certainty short-term movements in the market.

2.  Mistaking a lot of stuff for diversification.  People tend to think if they get a statement with a lot of stuff on it they are diversified.  This is just simply not true. If all of your assets are in a similar category, say the S&P 500, then when that category goes down so will your entire portfolio. 

Just because it consisted of a large number of stocks doesn’t equate to prudence if the stocks move in-step with one another.  We see this more than we’d like to admit from our clients just joining us. This can best be remembered by the tech bubble of the late 90’s that ruined so much wealth for so many people. 

Often investors would tell us they had no idea they were so concentrated, they were led to believe they were diversified.

3.  Mistaking activity for control.  The investing media and huge wall street firms tend to want us to think the more we trade the more we are in control of our portfolio and our money. As in Vegas on the slot machines, the more times you pull the lever the less in control you are because the odds are stacked against you, the more times you trade in your account (or your manager trades) the less control you have. With each trade, you get your returns eaten up by brokerage commissions and spreads so the odds are stacked against you to capture good returns in a control discipline fashion.

4.  Believing all risks are equal.  Many times investors behave in a crazy manner by taking on huge risks.  They then justify that behavior by proclaiming risk and reward (i.e. return) are related. This is true but there is a huge fallacy in that thought that all risks are related.  For example, if I jump off a bridge I am taking on additional risk but there is absolutely no positive return going to come my way. 

The same can be said for imprudent risks investors take in their portfolio.  Not the same as risks that have a high probably of premium return over time which is what successful investing is all about.

5.  Trusting your broker.  People are led to believe by the media hype and the largeness of the institutions that a commissioned broker works for them and their best interest.   The reality is the broker works for the broker-dealer and they promote and sell what the broker-dealer tells them to promote and sell.   Now before you jump all over me, there is nothing wrong with salespeople, they make our country run. But I take issue with the expectation of unbiased advice that just isn’t there.

6.  Believing this time is different. This mistake is repeated time and time again throughout history by mankind.  By definition, there will be something different about it each time, but its also always the same.
 
Our most recent two examples were in the real estate bubble of the 2000’s and the tech bubble in the late 1990’s.  Both times investors were led to believe that there was no need for diversification and prudence because this is the wave of the future.
 
Anytime you narrowly allocate your assets, you are subject to a painful experience at the fall of that category of assets.
 

7. The Final Deadly Investor Trap…The I’ll stop when I Get Even Mistake.   After suffering huge losses in a portfolio due to any of the factors already discussed many investors don’t want to realize or admit to a mistake.  So they disguise the reaction by saying, “well I’m down $150,000, I will stop when I get even.”
 
The reality is this is a HUGE mistake.  The best time to be prudent is always as soon as I can.
 

8. Thinking "Risk" Just Involves Losing Principle!

Here is a big mistake we deal with almost every day.
 
In fact, a client that's going to be retiring, said, "We don't want to take any 'risk' with our retirement funds and stock! We want them to be totally safe and free of 'risk'!"
 
(Have you ever thought about that yourself?)
 

There's More Risk In "Riskless" Investments Than You May Think!

Let's discuss what the definition of "risk" is, in the first place? If you look it up in the dictionary, you'll see that it is defined as "A chance of encountering a loss or harm, a hazard or danger".

Now, you'll notice it doesn't say. "loss of principle". It just is defined as "loss". This is a major distinction we need to make here. Most retirees think "risk" means that you put your investments somewhere, and the $100,000 you started with is now worth far less than $100,000.
 
And yes, this is one type of risk...and a real one at that!
 
But it is only one type of risk. There are others that are just as scary and that can hurt you just as badly as losing principle!
 
By the way, if I told you that you are actually losing real money in the bank, would you believe me? Would you think I was lying, because CD's are insured by the FDIC? I guess this is the time to explain what I mean.
 
If you are making 4% interest on a CD, and you are in the 28% tax bracket, your net, after tax, yield is only 2.88%!
 

Now, that would be bad enough, but we cannot forget about our friend, inflation. Yes, they claim inflation has been licked. That it's gone. Why? Because it's been hovering around 3.5 - 4% for the last few years.
 
Now, that is considered low, low inflation by today's standards.
 
But, did you know that in the early '70's, when president Nixon instituted price controls, inflation was an incredibly high 4%!

Isn't that interesting?
 
That in 1972, 4% inflation was considered so high, that the government tried putting price controls in place. Now, when inflation is at the same exact level, 20+ years later, it's considered insignificant by our friends in the Capitol!

How can this be? Could it be that inflation has changed, or is it more likely that the government has changed the way they want us to view and perceive it?
 
Anyway, how does this supposed "not so bad" inflation affect our CD example?
 

Losing Money On So-Called "Riskless" Investments Is Very Real!

 
Well, remember in our example that we're at 2.88% net, after tax yield. Now let's subtract inflation from this yield, to arrive at your true change in value, adjusted for the loss of purchasing power:
 

 
Those brackets, by the way, mean a negative real rate of return! Yes, that means that you have a loss of  value, of $62 for each $10,000 you have invested in CD's!
 
Now, if I asked you to put money in an investment that was guaranteed to lose $62 for each $10,000 you invested, you'd run away from me faster than a deer from a lion. Yet, if you have CD's, then you are doing the exact same thing!
 
So, what does a retiree do to get a better return, and avoid the higher taxes on their Social Security and other income?
 
As I said a couple of minutes ago, the real secret is to know what items you can invest in, that are off of the "tax hit list". Things like CD's and bonds get special tax treatment. So special, that they cause the maximum taxes to be paid!
 
What you need to do is figure out how much monthly income you need, and then build a plan that uses the tax- favored items! This assures that you get the cash flow you need, and avoid wasting money on paying the taxes you don't need... with assets that have some chance to keep up with our inevitable inflation!
 

See, the risk we're talking about here is the risk of losing purchasing power! This risk is so profound, yet almost totally ignored by most retirees, that is, until it's too late!

Let me tell you a story about a woman, Grandma Liz.

Liz was a very frugal woman. When she retired at age 65 in 1956, she had a Social Security income of $400 a month, plus a pension from her late husband, that paid her $205 a month. And, Liz had $12,000 in the bank.
 
Now, in 1956, this total of $605 a month income, plus $12,000 in savings was BIG MONEY!
 
Liz's mortgage payment was $81 a month. And with her car payment of $45 a month, and her other necessities, Liz was living on EASY STREET!
 
Let's move ahead to 1966. Now, Liz had sold her home, and pocketed $65,000 from the sale, which was all shielded from income tax because of the special once in a lifetime capital gains tax exclusion. (She sold the home because it was too much for her to keep up, at age 75.)

She had that money, plus most of the $12,000 she started retirement with. But her expenses had increased, especially her rent. She was now paying $150 a month in rent, and most of her other expenses had gone up as well due to inflation.
 

She Ended Up Having To Depend On Her Grandchildren To Take Care Of Her For The Rest Of Her Life.

 
Over the next several years, she went through a lot of her nest egg, by helping out her kids and grandkids, paying for down payments, college expenses, and so on.
 
Now, it's 1982, and Liz is broke. Her rent is $657 a month. Her medical expenses that are not covered by Medicare and insurance are over $200 a month. Her food, clothing, etc. is way up, and she has long since stopped helping the younger folks, because her savings are gone.
 
If she didn't have so many grandchildren that she had helped, now pitching in to help her, she would have ended up on welfare.
 
Liz didn't understand how powerful a risk the loss of purchasing power provides. Believe me, this kind of story can break your heart. The only way to assure you won't run out of money is to have a plan that both meets your income needs, and provides the opportunity to keep up with inflation.
 
Now, no one is suggesting you not keep some money in CD's or other guaranteed programs, because that would be foolish.

But, on the same token, having too much in these type of investments can assure that you have a high risk of running out of money! No one wants to outlive their money. Misunderstanding the risk of the loss of purchasing power is a mistake you do not want to make!
 

9. Paying For The Wrong Kinds, And Wrong Amounts, Of Insurance!

This area is so messed up for most retirees, that you wouldn't believe it!
 
For some reason, when people are retired, many of them hang on to old insurance coverage of all types, just because they've had them for a long time, and are resistant to change. I'm not sure why, but it seems to be the case more often than not.
 
Listen, when you are in retirement, you have little extra room in your budget to waste money on needless coverage, or to be shortchanging yourself on coverage you do need!
 
Many of our retired clients find they can get more coverage in the areas they do need, and eliminate or reduce coverage on stuff they don't need, and save hundreds or thousands of dollars in the process!
 
We recently saw a couple in their late 60's, who were paying over $2,100 a year for coverages they didn't need, and had no insurance at all on things that they really should have in place.
 
By repositioning their insurance portfolio, we showed them what to get and what to get rid of.
 
The net bottom line is that they have an excellent group of coverage for just about anything that could go wrong, and are saving $123 a month that they are spending to have fun! No one wants you to be insurance poor, but we also don't want you wasting money on things you truly don't need, either!
 
The only answer is to have someone objectively review your insurance, and find out what's wrong and what's right! If there was one area that is more frequently messed up by retirees than overpaying taxes, overpaying for insurance is definitely it!
 
Most people we see, have truly bad auto, homeowner, condo, health, long term care, and life policies! All the coverages are bought with all the wrong information, from people who are motivated by all the wrong reasons. I'll bet you without knowing you or ever talking to you that you have more than one type of insurance that is anywhere from kind of bad…all the way to disgustingly bad!
 
This financial area must be reviewed and coordinated, OBJECTIVELY, with all the rest of your finances!
 

10. Planning For Your Retirement When You Are Already Retired!

 
This mistake is one that we see over and over again.
 
People getting "laid off" from a job they've had for years. Or taking advantage of the "early retirement" program offered so they can shrink their payroll. Or, people taking normal retirement at age 65. Or whatever reason.
 
We have people coming in here, constantly asking the same question: "Will we have enough money to make it all the way with the same lifestyle?"
 
This is a big mistake! They have already made all their decisions about options. They have already taken their retirement plans and either had them distributed or receiving monthly payouts.
 
They have made all their choices, and want us to tell them they're going to be OK.
 
I've got some sad news.
 
Many of these people are not going to be OK, because they let the horse out of the barn, and want us to close the door up with the horse still in the barn!
 
If I'm making any sense to you, you'll see that waiting until you reach a certain age to plan for that same age usually doesn't work.
 
Think about Grandma Liz. If she had done a better job of planning 40 years ago, she might not have ended up so broke.
 
We had a client that came to us under these kind of circumstances, and we had the unpleasant job of telling him and his wife that they would be out of money in less than 10 years. Their response was to fire us, because we brought them the bad news. (They chopped off the head of the messenger!) But they were making the same mistake that Grandma Liz made many years ago...only worse!
 
So, if you're not yet retired, do some detailed planning right NOW! Don't wait until you are retired. Now, if you're already retired, it's never too late to start or update your planning. Which brings us to the most important mistake of all to avoid:
 

11. Not Doing Consistent, Careful, Ongoing Planning!

 
Yes, planning is the single, most effective technique to have a safe and secure retirement! It worked during Teddy Roosevelt's days, it worked during Viet Nam, and it works now! See, the reason most of us aren't going to win the retirement game, is that we don't follow this crucial sequence, when it comes to managing our finances:
 

1. Figure out where you are today.
2. Figure out where you want to be.
3. Get a true understanding of the options you have available to you. (Not from biased sources.)
4. Develop a plan that will provide the right "course" to follow.
5. Make the changes necessary to get the plan going.
6. Watch your progress, and make the proper adjustments to keep the plan "on course".

 
Makes a lot of sense, doesn't it?
 
Kind of the same process you go through every day when planning a trip to the mall, or taking the kids to practice, or going on a visit or vacation, etc. Or like you do at your job before making decisions.
 
Could you imagine how you could get through your daily life, or keep the business alive without following this sequence of events?
 
Could you imagine how messed up you'd be if you didn't know where you lived, what time your meetings were, didn't know which roads led to the recreation center, didn't know where the meeting was going to be held, and finally, didn't know which room the meeting was in?
 
I know that sounds stupid, because in our day to day activities, we always know all those things!
 
But, can you really say the same thing about your money? Do you truly know where you are today? Are you certain you have specific goals of where you want to be financially? Can you say that you know all the choices you have available to you? Have you set up a plan to get where you want to be?
 
Or, like most of us, are you "winging it" as you go along???
 
In all the years we've been helping people like you win the game of money, and when studying the characteristics of families who are truly financially independent, we find one common theme.
 
Not their age, nor occupation, nor sex, nor income, nor any of those things.
 
No. The one common attribute is that they make a constant effort to plan for their future.
 
That's it. It may not sound very exotic or romantic. But it's simple, and it works. You know, usually, the most effective things in life, are the most simple and basic. Now, with this ridiculous attack on your future by the government, and the uncertainty of being retired, you need to plan for your own future, more than ever!
 
Make sense? I hope so. Because this topic is very important to us, and to you.
 
It's important to us, because we help people plan for a living.
 
It's important to you, because planning may be the best weapon you'll have to make sure you live the way you want!
 
So where do you go from here?
 
Well, we have two ways of introducing planning into people's lives. Both are easy, and both require no pressure or any "sales" garbage. Another way to look at this, is that a doctor cannot help a patient until he or she does a diagnosis to see what is wrong. And then prescribe treatments based on that diagnosis. So the patient can have a "map" or a plan on how to get well.
 
And, just like that doctor, the first step towards getting well financially, we need to perform a diagnosis to see what "ails you!" Now here's what I'd like to offer you:
 

A FREE CONSULTATION TO FIND OUT EXACTLY WHAT YOU ARE FEELING ABOUT YOUR MONEY. A "DIAGNOSIS", IF YOU WILL.

 Yes, we will do something your doctor wouldn't do. Provide an initial interview and consultation... free of charge! And no, it will not be a disguised sales presentation. Or a "pitch". Or anything, except a brief (half hour or so) time to review what is going on in your financial life, how the change in your status may affect you, and what concerns you.
 
And that's it.
 
If, at the end of the interview, you do not feel like we can help you, or that you don't like me, or that you want to keep doing what you're doing, etc., that's fine.
 
And that's it.
 
You go home, and we leave it at that.

NO PRESSURE.  NO SALES.  NO HASSLES!

 
You see, we know a critical fact:
 

Believe me, I could not be working with so many retirees if I was doing anything to make them uncomfortable! All we do is meet, at no charge or obligation... and my clients take it from there! Another option we make available to people who are interested in exploring planning further, is to attend one of our upcoming free seminars.
 
See, we've found over the years, that some people prefer a one-on-one consultation to investigate whether planning is right for them.
 
Other people, like the idea of attending a group workshop. They feel even less threatened or worried that someone is "going to try and sell them something".
 
And we understand very well, that being part of a group can be much less scary. So, that's why we've been doing these workshops, and will continue to do so.
 
If you're interested in attending one of the coming programs, take a look at the pink flyer enclosed with this report. It will give you the information on the topic of the seminar, the dates, times and locations of the next batch of programs.

If you want to come to one, just call the number on the flyer, and leave your name and address, and we'll reserve your spot!
 
In either case, whether you come in for the personal consultation, or to one of the seminars, we want to educate you, and help you without even a drop of "sales pressure".
 
I can't think of a better way to work.
 
Can you? So why don't you think this over for a couple of days, and see if this makes sense to you? If you have any major skepticism left, or maybe have a question or two, feel free to give me a call. After all, a phone call to learn a few things can't hurt!
 
If you are really not interested or ready, that's great.
 
If you want to talk, that's OK too.
 
You have to understand that I love getting new clients, and as a matter of fact, I am hired by several retirees each month as their financial advisor to solve their problems.
 
But, because I have a steady volume, I never accept clients that aren't really excited and interested in rebuilding their future. I am going to be honest with you. I have so much fun seeing people's lives change for the better, that I would never work with anyone who wasn't excited and looking forward to finally getting the:

Control Of Their Lives Back Through Planning!

Life is too short to "fight" people who don't really want to PLAN FOR THE FUTURE. I hope this discussion of building a map for your life's road makes sense. I also hope you are thinking a lot about your own life, and whether or not you feel in control of it. Or whether it is controlling you!
 
Even if we never talk, I want you to begin to take a new view of your life.
 
One that allows your natural joy and love be the dominant forces.
 
So you and your family can have the best life possible.
 
And that I have shown you how to get rid of those bad feelings that messed up finances evoke.
 
There is too much good in life, to let worry and frustration get in the way. I am always positive that planning may be the best weapon to stop the negative sides, and bring out the wonderful gifts we all have been given!
 
Anyway, I'm done for now. I look forward to talking to you soon, and seeing where we go from here! Take care, and I wish you all the good luck in the world!
 

Sincerely,
 

Eddie Overdyke
 

P.S. If you want to avoid making the 11 biggest mistakes retirees make, you need to learn what they are and how to never make them. This report gives you the knowledge to be sure you don't become a retiree who runs out of money!

P.P.S. Most people don't plan to fail, they fail to plan! Don't hate yourself for falling into this syndrome... to find all your hard earned money has been wiped out with mistakes you could have avoided! It's time to take firm control your own financial destiny... it's all up to you!
 

© 2001 HPA, Inc.