April 14

Can I Still Retire?



Hey everybody – I hope things are going well for you.  I hope you are staying well and that you are doing everything that all of us are supposed to be doing, and following all the protocol that your community is laying out for you, and I hope you are taking it seriously, but not so seriously that you are scared; seriously enough that you are careful, but not so serious that you are frightened.  We want to make sure that you know that we care about what is going on with you as much as we care about what is going on with us.

I feel like we have a community here that stretches from coast to coast.  We talk to people all the time from Seattle WA to Miami FL, from NY and Maine all the way to California, and we just want to make sure that you know you are on our minds and on our hearts, and that we care about what is happening with you.  

I have been getting a question quite often, and I just want to repeat the question to you, and then tell you what I have responded with.  Some people have asked me “now that this downturn in the market has happened, am I still able to retire? Are my plans for the future thrown off dramatically?”  You know, there is no way to say “it’s all going to be perfectly fine”.  There is no way to say “it is all going to recover in 6 months or whenever”.  We are not trying to respond with some prediction.

"So what I want to encourage you with is don’t focus on what you think you’ve lost.  Focus on what you have kept thus far."

What we do want to respond with is that we are where we are because we really thought through all the different decisions that we made.  We considered all the different options of each one of those decisions, and we decided what was best for us.  Along that way, we know that we took some caution, and we know that we took some chances.  The caution is supposed to offset the chances that we took.

For instance, someone was wondering “do I still get a chance to retire this year?”  The market has gone down 30%, and they just weren’t sure that they could do it.  Here is what I helped them focus on:  some of the investment money that they have is located in the G Fund inside TSP.  The G Fund is the guarantee of preservation; there is no way you can lose any money in it.  When we look at what you need over a period of time, let's find out how many years of income your G Fund holds, so that you have time for the market to recover, and you won't have to use the rest of your TSP balance.  

What I want to encourage you with is don’t focus on what you think you’ve lost.  Focus on what you have kept thus far.  What you have is not really a pile of money inside your investment account.  What you have are pieces of property called Mutual Fund shares.  Those shares are up for sale at times, called a share price.  A share price reflects really not so much as what your piece of property is worth, but also it reflects how people feel about it.  And when people are feeling bad, like they are now, they are going to try to low-ball you.  So as long as you are not looking to sell something, you can ignore what is being offered for what you own inside your retirement account, and focus on what you have saved inside your retirement account, the fund shares that are called the G Fund shares.  These are the ones that you have that make you feel better, and help you know that no matter what happens in the market, and no matter what happens with interest rates, you are going to have enough money to do what you want over the period of time that you design to use it.

Let’s think about this: if you've protected yourself and took some caution and also took some chances, they offset one another. Right now we need to see how that caution is going to work out, and trust the market to be resilient.  It has always been resilient; there is no reason for us to doubt that.  We don’t know how quickly it will rebound, but we know in the end it will be resilient.  So until then, we have to be resilient.

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I want you to believe in what you have decided. I want you to believe in what people are out to do.  Most of us are out there trying to create value for others, because creating value for others actually creates value for ourselves. Trust that sentiment. Trust that intention.  And trust that the instruments that we use, the investments that we use, are going to be resilient.  And let’s toughen up our own resiliency and be able to wait out whatever amount of time it takes for that to bounce back. Just be grateful that we have the things that we have held on to, that we have saved.

I hope this helps you. I am more than happy to hear from you, send an email and let us know how you're doing or leave a comment on this post!  I can’t wait to hear from you, I hope you are doing well.  

Have a great day!

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