Broker Check

5 Keys to Retiring

September 12, 2018

What does retiring well look like?

How much money do we need?

How long will it last?

Can I run out of money?

What will my lifestyle be like?

What if one of us gets sick?

All of these questions are of paramount importance to people approaching retirement regardless of whether you are a doctor, entrepreneur, stay-at-home dad or mom, or any of the other myriad of noble professions that exist. As holding a doctorate of business and a third generation financial advisor, I would like to suggest a few keys to helping you towards retiring well.

1)     Begin with the End in Mind.

I have a dream (several dreams to be honest) one of them involves enjoying the fruit of good tilled earth and building things with my own hands. The dream is to own a ranch in one of America’s untamed wildernesses like Montana, Idaho, or Wyoming. I love mountains, the crisp cool air and the hard granite beneath my feet. I love forests, with their earthy smell and the crackling of leaves as I walk. I love wide open spaces where the wind carries the scent of rain miles in front of the approaching storm and you can see sunsets and sunrises that stretch for miles. But most importantly, I love my family and want to have the chance to spend time in such a place with my wonderful wife and sons.

This is an end that I hold in front of me. It motivates me to work hard and do the best that I can for my family and those people I have the opportunity to help.

What does beginning with the end in mind look like for you?

2)     Prepare for the Unexpected.

My wife and I had just been married a month when we got the medical confirmation that she was pregnant! We were terrified and exultant all at the same time. Needless to say, this was TOTALLY unexpected. Now before everyone jumps on the birds and the bees talk about how to prevent such surprises, don’t get lost in the weeds. It was a surprise but as Ms. Reba told me once, "sometimes life gives us surprises but they can be some of the happiest things that happen to us."

To retire well you must prepare for surprises: the good, bad, ugly, and awesome. This involves a few main things.

  1. Build liquid savings separate from retirement accounts up to 25-50% of your income (and increase this as you get closer to retirement, ending at 2-5 times your yearly needed income) this will let you ride out a job loss early on or a down market in retirement.
  2. Own the proper insurances to protect against disaster, sickness, disability, and death.

3)     Pay Yourself First.

I had a couple walk into my office a while ago and they brought all of their financial documents, they told me all of their account balances, and they asked me to prepare a strategy for them to retire well. Mind you, this was my first time meeting this couple professionally and they were in their late fifties. After a hour listening to them and pouring over their documents, it became apparent that I was going to have to do the only thing I hate about this job. I had to tell them that unless they were willing and able to make some big changes to their spending and lifestyle, I couldn’t help them. They had no history of paying themselves first and were unable to commit to doing it now and as a result, despite desiring to help them retire well, I was unable to do so.

This is a basic economic principle. Investing in yourself and your family is the only way to have a healthy financial future. This means the first thing you buy with extra money is some additional retirement wealth. When you do this you are investing in your future i.e. the rule of thumb is:

  1. Invest first.
  2. Spend later.

4)     Increase Your Margin AND Take More Risks. 

Would you like to get to retirement and have all of your bills paid, all of your needs met, saved what you wanted to save, created a legacy, and still have money left over? OF COURSE! The key to this is having margin and taking risks.

Margin comes from building retirement income streams that also includes a portion of your assets that are guaranteed* and cover your costs and needs. It means having enough money in accounts that are not exposed to the market’s volatility that you can leave any investments alone in the event of a market crash until they recover.

Taking more risks is something you can do when you have margin. If you are dependent upon your market investments to provide your retirement income then you can’t afford risk. Imagine retiring January 1st, 2008…. That would not be a pretty picture if you were heavily invested in the market.

5)     Don’t Leave It to Chance.

This is my final point, find an advisor that you know, like, and trust. Have them develop a plan and routinely ask them what if questions like those listed in this article or the following: What does the end look like if…., What happens if this unexpected event occurs…., What if I pay myself first this much…., What if I have this much margin, how much risk can I take?

I don’t know everything, despite having over a decade of university education in business, but I have an awesome team and we are all in this career because we want to help people.

*All guarantees are based on the claims paying ability of the issuer.

Remember, money is a terrible master but it is an awesome tool.

Dr. Tomas “Thor” Parks, D.B.A. Assistant Professor and Financial Advisor

Penn Mutual Carolina Partners 6000 Fairview Rd., Suite 1425 Charlotte, NC 28210    

PHONE: 704.362.6788 FAX: 704.366.5851 MOBILE: 330.618.3934


Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit. ~ Aristotle

I hope I shall possess firmness and virtue enough to maintain what I consider the most enviable of all titles, the character of an honest man. ~ President George Washington