By Fritz Schafer, with contributions by Chris Schafer
“Don’t kill the goose that lays the golden egg!”
The first time I heard my mentor, Michael Brooke, say this to a client I was wondering what he meant. He explained that he was advising a retired couple who wanted to give quite a bit of their retirement nest egg to their children. Michael was explaining to them that although it seems that they have enough money now to last forever, if they withdrew more from their account than their financial plan called for, they could be in financial trouble. The goose was their financial plan and they needed to keep it healthy, so it could continue to provide for them for many years to come. We have seen this play out with clients who retire with a pension that has the option for life time income or a lump sum. Sometimes, clients who take the lump sum see the large balance in their IRA and have tendency to withdrawal more than their financial plan recommends in the early years, and then have to deal with the consequences later in retirement.
As we write this particular blog the Ohio State Buckeyes are preparing for the College Football Playoffs. At the same time their defensive coordinator Luke Fickle has just announced he has accepted the position of Head Football coach at the University of Cincinnati. Unlike most new head coach hires, Coach Fickle plans to remain with Ohio State until after the playoffs. My Brother Chris is an Ohio State graduate and I am a University of Cincinnati graduate and we both like this decision. Why? Well Chris likes it because Coach Fickle is a big part of Ohio State’s winning ways this year, and he does not want to see that disrupted right before the playoffs. I like it because it shows commitment to a plan to achieve a goal. It may be better for Cincinnati in the short run if Coach Fickle left now and began recruiting for the Bearcats. It’s true he may miss out on some recruits this year as other programs will have a head start. However, it is my hope and my belief that he will bring with him from Ohio State the type of program that makes a long-term commitment to a program to make it successful year after year.
At the time of this writing I am also near the halfway point in my marathon training, and it is tough! The miles have increased from week to week, the weather is getting nasty, and I have been fighting a bad cold with a persistent cough that just wants to linger on an on! I will be honest; I have had to take some days off to stay healthy both mentally and physically. I have had to revise my marathon plan so that I can see it through. But now that I am on the back-end of my cold and I have had more rest, I feel motivated to get back on my training plan. Sometimes “life happens” and plans need to be changed or modified in the short term. But don’t lose sight of the end goal.
To give you a quick idea the week ahead looks like this:
Monday – 8 miles easy pace
Tuesday – 8 miles – 6 with half mile intervals at a fast pace
Wed – Rest and recover
Thursday – 11 miles – 8 at race pace
Friday – 7 miles easy pace
Saturday – 8 miles easy pace (or a 1.5 hour trail run)
Sunday – 15 miles
Weekly total – 57 miles.
That is the plan, but what happens if I can’t do it? What if I get sick again? What if it snows or the streets ice over? What if my poor old leg muscles just can’t handle that kind of mileage? Any of these can and will happen throughout the course of training, just as many things will come up throughout the course of your financial marathon. Do I scrap the plan all together? Maybe I will stop training for a while until I recover and begin again. Maybe I keep training, but adjust my expectations, and plan for a slower race. Or, maybe I switch to running the half marathon instead. The obstacles I’m faced with will help guide my adjustments to my plan.
We ask our clients to keep us informed for significant changes in their life that may impact their financial plan. Examples might be large unexpected expenses, big purchases, career changes, house changes, job changes, divorces or marriages, inheritances, children and grandchildren. Many times no adjustment to your financial plan is necessary. However, when adjustments are necessary, we are there to help our clients through those issues. Stick with your plan; remember your retirement plan is the golden goose that will provide.
Return to Words of Wisdom