By Brad Thomason, CPA
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I have come to accept what many a chagrinned fisherman before me has also surrendered to:  the fact that February is just not a good month for us here in these ole United States.  Other than Florida, the prospects are just too hit or miss; and even in Florida the circumstances are by no means certain.  Florida gets winter weather (relatively speaking, anyway) too, and passing systems work the same way as that little cup you put the dice in when you play Yahtzee.  Fantastic fishing one day can evaporate by the next, only to reform elsewhere.  Or it might not.  If you go to Florida, and you are willing to move day-by-day, for up to a couple of hundred miles, switching up your target species as conditions dictate, you can do some good in February.  But that’s about the most you can hope for.
 
When friends ask you the week before what the plan is, the first reaction is to guffaw and declare you wish you knew.
 
The old expression about man planning and God laughing seems much too close by to be amusing.
 
There are a lot of things we deal with that we simply have no control or even influence over.  This has led some to question whether planning – for anything – really makes much sense at all in the final analysis.
 
I’ve always thought of having a plan as less a declaration that the people are in control, and more a reference to work back to when circumstances knock you off course from time to time.  A plan represents intent which persists beyond the current moment, and maybe for many decades out into the future.  The paradox of the whole situation is that virtually no one ever pulls off a plan as it is originally conceived, and yet no one who ever accomplishes much over a sustained time period does so without meaning to, and working toward it.  In other words, executing a plan of some sort, such as it may be.
 
We frequently engage in an exercise around here in which we consider the question, “What would I do if I were the king/queen of the world?”  In other words, if you could have things go any way you wanted them to go, what would you bring about?  The fact that you can’t just wave a magic wand and make it happen doesn’t matter.  Answering the question focuses your thoughts and often makes quite obvious what you should be working for.  That understanding becomes this line of intent that I’m referring to.
 
As events play out, there’s no real choice other than reacting to them in the moment, and then taking stock once the moment has passed.  Will you persist with the same approach, or adapt to a different one? 
 
It’s much harder to answer that question if you don’t know how you would like to see things work out in the end.
 
So we plan.  Not because we think we are in control.  Not because we think we’ll be left alone by the universe to do our work uninterrupted.  But precisely because we don’t expect those things.  When things don’t break our way – either because we didn’t control something we could have, or because it was never in our grasp to begin with – we are better off if we can shake it off quickly and get about the business of figuring out what to do as a result of it.  It is in that moment, when instability is running highest, that the existence of the plan reaches its highest importance, too.
 
Unless we’re still just talking about fishing.  In which case, waiting for March is probably the better bet.

​By Brad Thomason, CPA
 
 
A frequent topic in discussions about retirement planning takes the form of questions like Am I on track, and How much money should I have at age X?
 
It’s not hard to see where questions of this type come from.  Getting in position for a successful retirement doesn’t happen overnight, so it’s only natural to want to get some gauge on the progress of the undertaking. 
 
Unfortunately, I think this may be an area (yet another one…) where firm answers are not easy to find.  Consider the following two cases.
 
Our first thirty-year old got a degree, got a good job, has worked diligently to take advantage of opportunities and has been among the most rapid advancers within her profession’s peer group.  She doesn’t have any debt to speak of other than a mortgage, has a written budget which she follows faithfully and already has material, positive balances in all of her savings and retirement accounts.
 
Our second thirty-year old has a job, but is in all respects just a mediocre performer.  A number of younger persons have already out-paced him in terms of career advancement.  He spends more or less what he earns as soon as he gets it, has a lot of toys to show for it, and a collection of credit card statements, as well.  His spending varies widely from one month to then next, and is far more likely to follow what he wants than what he needs, or how much cash is available to pay for the purchase.  Other than a few hundred bucks, he has no savings to speak of.
 
Now if I ask you which one it would be better to be, I think that the near-universal response would be the first.
 
Yet nothing in what I have just presented actually tells you anything at all about the odds of who will or won’t eventually succeed in retirement (where ‘succeed’ means something like having enough money to pay for everything that there’s a need to pay for).
 
What I have told you does not account for the possibility that our diligent subject, despite unassailably responsible behavior, ultimately fails because she lives to be 99 years old; while the other one succeeds – financially, anyway – by having a lethal heart attack at age 72, before he has a chance to go broke.
 
What I have told you does not account for the possibility that our second character wakes up one morning in his mid-fifties, realizes how careless he has been over the course of his adult years, and motivated by both shame and fear, goes on a fifteen year earnings kick the likes of which our buttoned-down first subject would have never even thought about for the simple reason that she didn’t need to think about it.
 
The point is, looking at someone’s “progress” a long way away from when that person will retire has little predictive value.  The further away, the less it has, likely to the point of telling you nothing at all.  Too much can change as the years go by, and some of the possibilities can be quite large relative to the pieces of the equation that were being examined before the event.  Just ask Jed Clampett.  Random events are not obligated to be one particular size or another; they are uncertain both as to occurrence and impact.  Which ends up being a really important, but not-so obvious, part of the equation.
 
Ultimately the measurement which matters most is the one you do at the point that someone is about to pull the trigger on retiring.  On the day you plan to retire, do you or do you not have the resources necessary to consider the upcoming task (of paying for the rest of your life) to be fully endowed?  Note that this is a binary question.  It’s either a yes or a no; whereas the same question, asked every other day leading up to The Day, would have to be answered as some sort of inexact maybe/maybe not (again, because of those random events being possible).
 
In practical terms, people are not going to stop wondering about what their progress is.  But in the midst of that exercise, I suggest that people keep two things in mind.
 
First, the appearance of being on-track is not a guarantee of a successful outcome in the making.
 
Second, being behind in your progress (by whatever method you wish to try to estimate that fuzzy notion) doesn’t impact your ability to make future progress, and do so for as long as you continue to try.  Nor does it preclude you from pushing your retirement date out, should you decide to do so.
 
The only measurement date that really matters is the one that coincides with the day of action, the day that you hang up your spurs and retire.  Even though you can check the score any time you like, remember that doing so is no different than checking in with five minutes left to go in the second quarter, the end of the fourth inning, after round six, etc.  Maybe it tells you something.  But it really doesn’t tell you much.  Although it can certainly lead to you think it means more – for good, or for bad - than it actually does.
 
So if you choose to check early, remember to proceed with caution.