My family has more than its fair share of peculiar
personalities. We're from west Texas, so maybe countless hours
spent in the sweltering sun chasing horn frogs and playing in
caliche pits brings out a few additional cases of the crazies.
Needless to say, I've learned to never be surprised by the things I
hear at family get-togethers. However, as an investment advisor, I
nearly came unglued when I recently found myself engaged in a
heated family debate about which is the better idea - preparing for
retirement or doomsday.
I couldn't believe that anyone, much less people I'm related to,
would even consider getting ready for doomsday instead of
retirement. I wondered if other people felt the same way, so
naturally, I turned to Google. My search led me to National
Doomsday Preppers Survey
. The survey, which included 1,007 nationally representative
Americans age 18 and over found that a whopping 41% believe
preparing for a catastrophe is a smarter than investing for
I found the results of the survey astounding, but after thinking
about it for a while, it started to make sense to me. Preparing for
Doomsday is probably more exciting, less intimidating, and
definitely easier than readying for retirement.
Unlike most investment vehicles, doomsday products are easy to
understand. With a quick internet search of "doomsday shopping
list," you can find list after list of survival necessities. Most
include pretty straightforward items like batteries, water, and
freeze dried food. While you may not know the intricate details of
exactly how a battery works, you probably have a general
understanding. Certainly, you know the end result; you put
batteries in a flashlight and voilà - you have light.
On the other hand, investment vehicles are not as clear. Sure
you get a prospectus when you buy a mutual fund, but who has the
patience to wade through pages and pages of minutia? Moreover,
unlike batteries, the end result of investing in the stock market
is never totally predictable.
Quite frankly, retirement isn't sexy. Retirement planning
essentially comes down to figuring out how you will pay for mundane
things like groceries, utilities, prescriptions, etc. That's why
you'll never see a movie where after a lifetime of diligently
saving and investing, the action hero du jour spends his days
relaxing peacefully on the golf course. Yet there are numerous
movies where we see our leading man heroically surviving in a
post-apocalyptic world. These movies are not merely entertaining.
They also create a picture of the world after a catastrophic event,
which gives us a starting place to imagine what the future could
look like. However, envisioning your life after you retire can be
Retirement involves a lot of moving pieces, many of which are
still unknown. Today's retiree may not have a clear or realistic
example of retirement. Previous generations lived in a world of
guaranteed pensions. Everything changed in 1974 when Congress
passed ERISA and shifted the burden of funding retirement from
employer to employee. Add that to current longevity statistics and
the recent whipsawing of the stock market, and it's enough to make
anyone feel uncertain about what the future holds.
Retirement doesn't have a defined time period, whereas doomsday
has an exact date; this time it's December 21, 2012. (See
previously predicted doomsdays in the
.) Not all doomsday preppers believe the Mayans had it right, but
most believe a catastrophic event isn't too far away. After the
catastrophe, there will be no need to keep up with the Joneses,
because the Joneses probably didn't buy generator. Everyone will be
in survival mode and maintaining your existing standard of living
will be impossible. In this situation, there will be no reason to
worry about how your portfolio is invested.
With retirement, you may know when it will start, but because
you don't have an expiration date stamped on your forehead, there's
no way to know how long it will last. Common thinking is that your
lifestyle will change and your cash flow needs will decrease after
you retire, but this line of thought is off base. Who you are, as
well as the things you need and want, will not immediately change
just because you no longer go to work every day. In reality, most
people do not experience a significant change in their expenses in
retirement, especially within the first few years.
Here's the bottom line - although I've admitted that I may have
a slight genetic propensity for peculiarity, I can absolutely and
sanely assure you that while Doomsday may or may not ever happen,
retirement will. Focusing on doomsday instead of retirement may be
incredibly tempting and in some weird way, it may even make you
feel better, but it is not going to change the fact that at some
point, you will no longer want (or be able) to work. Your best bet
is to take the necessary steps to prepare for retirement.
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The intent of this article is to help expand your financial
education. Although the information included may be relevant to
your particular situation, it is not meant to be personalized
advice. When it comes to investing, insurance and financial
planning, it is important to speak to a professional and get advice
that is tailored to your unique, individual situation. All
investments involve risk including possible loss of principal.
Investment objectives, risks and other information are contained in
the Snider Investment Method Owner's Manual; read and consider them
carefully before investing. More information can be found on our
website or by calling 1-888-6SNIDER. Past performance is not
indicative of future results.