Retirement Requires a Shift in Mindset - Replay

Common Sense Financial Podcast

Time is your most precious resource, but how you use it is up to you.

The shift from earning to retirement can be quite challenging, as you have to thread the needle between income, growth, and time.

In this new episode of the Common Sense Financial Podcast, host Brian Skrobonja goes over the most important mindset shift people need to make in order for their retirement plan to succeed.

• It is possible to retire without growth, but it’s impossible to succeed without income. But many people have trouble shifting their mindset from focusing on long-term growth into a consistent and reliable income.
• When you invest long-term, that means not having to withdraw money from your assets for a long time. But once you enter retirement, your timeline moves from the future to the present.
• This transition requires a mindset shift to be made before significant progress can be made.
• Retirement planning is a discovery process that boils down to learning whether or not you have an income gap in retirement and, once that’s discovered, the whole plan is built around replacing that income.
• Without that number, everything else is a guessing game. If you shortcut this step with estimates, you will only compound the issue downstream.
• Retirement seems like a simple concept, but it’s surprisingly complex and solving the issue with old ways of thinking will lead you astray.
• Future performance of investments can’t be determined by looking at the past. An investment doesn’t address the risks you face in retirement. The sooner you figure out that investing is a spoke in a very large wheel, the sooner you can begin to formulate a true retirement roadmap.
• There are common components for retirement scenarios, like the income gap.
• There are also common risks that all retirement plans need to account for: sequence of return risk, market risk, interest rate risk, mortality risk, legislative risk, longevity risk, and health risk. All retirement plans should be built around the idea of protecting yourself and mitigating as much risk as you possibly can.
• Most people’s largest asset is their income, but it’s often not considered for insurance.
• Confirmation bias can hinder our ability to consider alternative perspectives and make the mindset shifts we need to make in retirement. People can find themselves endlessly searching for experts to tell them that they don’t need to change their strategy in retirement because of our natural need to confirm our beliefs.
• The more successful a person becomes, the more valuable their time becomes. To preserve those valuable hours, it becomes increasingly more important to surround yourself with professionals to whom you can delegate responsibilities to free up time.
• Insurance is just a form of delegation. You delegate your risk to the insurance company, which mitigates the risk and increases the quality of your time.
• Delegating the research and leveraging the experience of a professional in retirement planning can help you leverage your time with confidence.

Mentioned in this episode:

BrianSkrobonja.com

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