The GOT system offers a viable and practical alternative to relying on outdated MPT tools. Although still widely in use, MPT-based calculators and analyzers can sometimes lead retirement savers to make decisions that aren’t in their best interest. That statement alone should trigger concerns from the mindful fiduciary.
Education
So one wants his epitaph to read “Here lies John Doe. He beat the S&P 500.” There needs to be an easy-to-understand and easy-to-implement system that properly reflects both your goals and the consequences of failing to meet those goals. Retirement savers want and need a system that represents a better way to set and meet retirement goals.
Many professionals and most of the current generation of finance professors have long ago removed “risk” from their investment decision-making algorithms. These forward-thinking folks recognize the greater importance of managing retirement saver behavior over managing irrelevant investment risk as it pertains to meeting or exceeding the goal of retiring in comfort.
You’re the one ultimately responsible for all decisions, from picking and choosing what you do and buy to determining how to manage your assets and cash flow stream. Oh, and did we forget to mention this is for the rest of your life?
It’s understandable, given the many hats plan sponsors wear, that mistakes will be made. The challenge is to not dwell on them, but to have a reasoned and determined process to address and correct them.
As you reach your seventh decade (that would be turning age 60 for those who forgot your first decade includes only your single digit years), you find yourself fast approaching that universal goal line known as “retirement.” Don’t let the nearness to the final goal may fool you into inaction.
Thanks in part to media reporting, retirement savers objectives are often misplaced. Striving for a high return or outpacing a particular index does not make for a successful retirement savings strategy.
“While it is preferable to start at a young age, you are never too old to start making good financial decisions. If you have made mistakes in the past, it is important that you recognize where you went wrong, and start taking the proper steps to fix any issues you may have created, so that you can move towards a healthier financial state.”
Comprehending the tax code is not an activity for the faint of heart and most retirement savers would faint if they saw the actual codebook. The problem with current tax code is that it may not be the same in the future. This realization can have profound impact on the retirement savings strategy one undertakes.
Quite the opposite from being “over the hill,” those in their forties may find they’re still slogging up hill in terms of saving for retirement.
