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You Can’t Retire on Testimonials

You Can’t Retire on Testimonials

According to a study done by the Center for Retirement Research at Boston College and reported in Bottom Line, half of retirees in the future will not have enough money to sustain their current lifestyle when they stop working. That’s an increase from 44% just three years ago. Large drops in investment and home value are obviously part of the cause.

Make sure you pay yourself. You should be using revenues to fund your life style, pay your business expenses, fund retirement options to the maximum allowed by law, build a vacation fund, build future expense needs (e.g., college educations, weddings), and maintain an emergency fund to cover anything from natural disaster to prolonged illness. (And, of course, obtain intelligent insurance coverage such as disability and comprehensive medical, along with umbrella liability and errors and omissions.)

The younger you are, the better your opportunity, but the more probably you’re putting this off. Create separate bank accounts if you must, but make sure that you’re not living the good life now and creating a rough life later.

© Alan Weiss 2010. All rights reserved.

Written by

Alan Weiss is a consultant, speaker, and author of over 60 books. His consulting firm, Summit Consulting Group, Inc., has attracted clients from over 500 leading organizations around the world.

Comments: 4

  • Gareth Price

    March 28, 2010

    Great advice Alan – if you’re self employed you don’t get any of the corporate perks that put this stuff on autopilot.

    It’s easy to “forget” to put money aside when it’s been a good month and you feel you deserve something nice.

    My wife and I recently took a Dave Ramsey course which was an excellent wake-up call that we should get started in this area while we’re still young (compound interest blows my mind).

    Mr Ramsey’s advice: get (and stay) out of debt, build an emergency fund, never pay retail, save money and build wealth.

    Between his advice and yours I’ve gone from hand-to-mouth survival to having a stable financial base to grow my web development practice from. Thank you.

  • Alan Weiss

    March 28, 2010


    1. Some debt makes sense in order to fund major purchases or experiences which you can plan to pay off.
    2. You always pay retail for Bentleys and Bulgaris and fine meals in great restaurants. Let’s not be miserly.
    3. Wealth is discretionary time. Money is fuel for wealth.

    Mr. Ramsey and I aren’t quite so eye-to-eye.

  • March 30, 2010

    One of the key advices to long term success indeed.

    “Pay yourself first”, associated with “the first sale is to yourself” makes a quite interesting road to travel.

    BTW, the bank becomes much more friendly when you do have some retirement funds that can be used to back your credit lines.

  • Alan Weiss

    March 30, 2010

    When the bank has a $100,000 relationship with you, you’re just a customer. When it’s a million, you’re a partner.

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