After 18 years in the National Football League, the Denver Broncos’ star quarterback, Peyton Manning, is calling it quits after a very successful career. We wish him well and hope that he’s made the preparations needed to enjoy a long, comfortable retirement. If he has, he’ll be in the minority. Research shows that an estimated 60% of retired NFL players go broke within five years of retirement; nearly 16% declare bankruptcy.
Fortunately, there’s a lot that Peyton can do to avoid that fate. While most of us won’t be retiring at 39, retirees still have a lot of the same worries as pro athletes. If we had the chance to help Peyton on his journey, it might look something like this…
Congratulations on your retirement! You’ve had an amazing career and we are glad you got to go out on a high note. We’re excited to see what you have planned next. We also want to share some ideas as you make the transition to retirement. We hope you find them helpful.
1. Don't Make Any Sudden Decisions
Take some time to process the transition away from a high-octane career and think about what you want out of retirement. Stop and smell the roses for a while and don’t make any major decisions about your future until you feel comfortable with your new phase of life. Many people who come from high-pressure, competitive jobs feel the urge to do something, anything, when they retire. You might be tempted to fill the void by rushing into a new business, partnership, or buying expensive toys or real estate. Don’t worry about making an immediate decision.
2. Don’t Jump Into Businesses or Investments You Don’t Understand
As a guy with money, you’re going to be surrounded by people pushing every kind of business, product, and investment there is. Don’t get taken in by the hype; think very carefully before you put your life savings into something you don’t completely understand, especially if the person asking is a friend or relative. Caring about someone doesn’t mean you should put your future at risk. You’ve worked hard to get where you are; don’t threaten it by taking too many risks now. Always remember, anything that sounds too good to be true usually is.
3. Work With a Team of Professionals
As a professional athlete, you’re used to working with the best in your business. Expect the same from your financial team. Don’t just go with the guy you went to school with, the one your buddy works with, or the one offering you the moon.
Look for a team who wants to get to know you and your dreams before making suggestions, answers your questions honestly, admits to uncertainty, and doesn’t make a lot of promises. Pick the professionals that are willing to ask you the hard questions and tell you the difficult truths you may not want to hear. Then listen to them.
Let your team be your barrier against hype, promises, information overload, and anyone looking for a handout. Turn to them when you have ideas or questions, or need to talk out a decision.
4. Have a Strategy for Retirement
You’ve got a long retirement ahead of you, one that’s likely to last 40 years or more. Though you’ve amassed a fortune most of us would envy, it’s not going to be enough if you don’t think ahead and make prudent choices. You should be thinking about the lifestyle you can afford in retirement and making sure your money lasts as long as you need it. Have a strategy for good and bad markets and remember that long-term investors have to cultivate patience.
How Can We Help?
Even if you’re not Peyton Manning, most of the advice above still applies. Retirement is a challenging transition and it pays to get it right. We work closely with our clients, long before and throughout their retirement, to understand their dreams and help create personalized retirement strategies that take them where they want to go. If you, or someone you know, have questions about retirement, give us a call at 913.814.3800.
Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.
The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.
Originally published on March 31, 2016 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.