Consequently, I’ve found that the average investor can easily become paralyzed at the thought of not only keeping up with, but outperforming these benchmarks. This can lead to frustration and to moving from strategy to strategy or advisor to advisor looking for one magic solution to beat the indices. Worst of all, these aren’t your benchmarks, and have no relevancy in helping you achieve your financial goals.

Let’s propose that we put an end to this dysfunctional approach and replace it with an approach that matters to you. I call this approach your Personal Benchmark™. This benchmark, set by you, only applies to you and your financial goals. It becomes a yardstick by which progress is measured over time. Progress toward retiring with the lifestyle you want, paying for that new kitchen remodel, sending your kids through college, or buying that vacation home in the mountains. You deserve a Personal Benchmark™ so you can accurately track whether or not you’re making meaningful progress.

I have a client who asked if this means that he might be settling for a return, instead of expecting to beat the market. I told him that if settling means realistically working towards achieving all of his financial objectives, then YES. Some of our clients who go through our process discover that they need to either temper their goals or save more money. Either way, our objective is to make it personal and realistic.

We want something we can track every year, and make corrections to along the way. I believe that the reason clients come to us is because we can develop the strategy, tactics and tools to put them on the track towards getting to their financial destinations. We measure success by achieving your goals – and those start with achieving your benchmark.

There’s a myriad things that makes retirement a frightening reality including:

• What am I going to do to occupy my time?
• What will my spouse think of me being home all the time?
• Will I be healthy long enough to do all the things I dreamed of doing?
• Will I be able to retire comfortably?

While we’ve worked with clients to help solve many of those issues, let’s focus on the question “Will I outlive my money?’ You are faced with some of the most important financial decisions you’ve ever confronted, when you choose to retire. And it’s the sheer amount of choices that makes this both difficult and important. To illustrate this, let’s use Tom and Maria as our hypothetical retiring couple.

When they decided to officially retire, they had 4 categories of money to sustain their retirement (you may have all or some of these):

• Social Security
• Pension
• Retirement Assets
• Savings

Since they each had these, there were 8 pots of money to integrate and optimize so that they could retire the way they had dreamed about. These can be irrevocable decisions that can cause irreparable financial harm if chosen with out proper planning.

Let me illustrate this point by using Tom and Maria’s Social Security as an example. Most people take their Social Security when they become eligible at age 62. If you were to contact your local Social Security office, they would most likely encourage you to start taking it once you’re eligible at age 62 – at least that’s been the experience of our clients who’ve visited their local office. Taking early Social Security can be a huge mistake under the right circumstances. If you are of reasonable health, have the other income or savings to sustain you until 66, and have some degree of longevity in your family then it typically pays to wait until age 66 (your Full Retirement Age according to Social Security). Why is that? Let’s walk through some numbers.

For every year that you delay taking Social Security, your benefit increases by 8% plus, since Social Security is indexed to inflation, the inflation rate (CPI). This means that if your Social Security benefit were $1,000 at age 62,waiting until age 66 would give you a benefit of $1,464.10 (assumes 2% CPI). That’s a 46% increase! In the case of Tom and Maria, delaying Tom’s Social Security to age 66 was an increase of over $240,000 in benefits over their lifetimes.

While waiting until age 70 to begin Social Security would provide an even bigger monthly benefit, not everyone can afford to wait that long. Why is it important to maximize your Social Security benefit? If you’re married, then it’s because your spouse will get the higher benefit of either his/her own or yours, whichever is greater.

While there are many intricacies with regards to Social Security this should give you a flavor of the importance to do proper planning. It’s such an individualized process – there’s no cookie cutter approach to retirement planning. You will need a customized plan based on your specific needs and goals. That’s why we developed the Retirement Income Optimizer™ – to provide you with a specific plan that seeks to help you successfully navigate your retirement.

This is a hypothetical example and is not representative of any specific situation.  Your results may vary.  No strategy assures success or protects against loss.

Part of getting older is making sure you’re prepared for the unknowns that life throws your way.  Most of the time that means identifying the risks you haven’t planned for and mitigating those risks.  That may mean for your investment portfolio, your home, your retirement income, your health, and your life.

What happens if you’re trying to eliminate a risk and you’ve found out you’ve waited too long?  For example, your current health problems keep you from qualifying for health insurance. I experienced one of these situations first hand and I’m hoping you can learn from my family’s misfortune.

About 8 years ago I spoke with my mom about long-term care insurance.  After meeting with her and her CPA she decided that it was a good idea and we should go ahead and apply.  I told her that she’d be receiving a call from the insurance company and they’d ask her a series of questions.

A couple of weeks later I received an email from the insurance company stating that she’d been denied coverage.  I was outraged and immediately dialed them up.  She was in great shape physically and I couldn’t imagine why she had been denied.

Everything came crashing down on me when the nice woman at the insurance company told me that Mom had been denied because she was irate with the person that called her on the phone – she had no idea why the insurance company would be calling or what it was all about.  So they denied her.  Because part of qualifying for long term care is a memory test and she failed miserably.

And now my sister and I knew something was wrong with Mom.  Suffice it to say, my mother was diagnosed with Alzheimer’s.  And she didn’t have long term care.  So she began “self funding” her long term care with her retirement assets.  We began with in-home care which she had a hard time tolerating and when the subject of 24 hour care became necessary my sister and I knew she would be extremely agitated with someone staying with her through the night.  So we had to make the hardest decision of our adult lives – putting Mom into assisted living.  We did lots of research and found a facility in town that we thought would be a good fit.  And so the spending escalated. She starting off spending about $7,000 per month; as her disease and her need for care have increased, so have her monthly expenses.  They’re currently around $9,000 per month.  She’s been in assisted living for 6 years and has spent nearly $600,000 of her retirement savings.

Failing to plan early enough can cost you dearly.  We don’t like thinking about these negative aspects of life and yet we really should.  There are lots of articles written about the ins and outs of long term care so I won’t labor that issue.  What I will tell you is that now there are more innovative ways to get long term care than ever before and you should have a professional review these options with you.  Make sure your consultant has access to a variety of solutions and not just one carrier.  The volatile markets and crazy headlines have kept lots of money in money markets and CDs earning close to nothing.  One thing you can do is deploy some of that capital to properly mitigate your risk of needing long term care.  And it’s never too early, because in spite of what Mick Jagger sang in 1964, time is not on our side.