By Brad Thomason, CPA
I like the word ‘might’ a lot. I find it to be one of the most frequent tools I use when I’m working, especially on planning and advisory exercises.
Not such a big fan of ‘will’ and ‘won’t, and their close kin. Hardly ever have a use for them when I’m in the workshop, so to speak.
Might makes people squirm, it’s true. When you want the definitive, and the conditional is all that’s on offer, it grates. Grates on me, too.
Would I like to be able to say, “Oh yes, I’m sure this investment approach will certainly turn out just the way you hope?” How about, “Listen, you won’t ever have to worry about that?” Come on. You know the answer.
But people who have been fully inoculated with might just seem to instinctively understand that they can’t just make a plan, check it off the list, set it down forever and go on to the next thing. That sort of approach would make them nervous. They start thinking after awhile that maybe they ought to check back on it, just to make sure everything is going OK. It probably is, right? But, like, I mean, what if it isn’t?
That’s good. That’s the right mindset, and the right action step. Check back. Check in. Internalize the fact that this whole retirement thing is a process, not an event.
You do not have to develop any kind of super-human abilities to pull this off. It still riles me up when I work on something that doesn’t end up going the way I want it to. Makes me furious, at times. So that’s hardly the mark of some sort of transcendent being.
But what is never in the equation for me is an expectation that things – investments, projects, business initiatives, whatever - will always go the way I want them to. As a result I’m never surprised when something comes off the rails. Don’t like it. Don’t enjoy having to get Plan B (or D, or F…) ready to go. But it’s not a shock. I have learned to accept that it is just a feature of the landscape, and I can keep on working towards whatever the goal is. Annoyed or frustrated though I may be.
Being a feature of the landscape, it’s not something that ever goes away; and in turn, isn’t something you ever get past. You do not graduate to a level where uncertainty leaves the equation (at least not while you’re still here on Earth). So it remains something you always need to keep an eye on.
All of which gets us back to might.
Ultimately it comes down to a decision. You just decide that might (or maybe, if you prefer) is going to be a good enough answer for you – not necessarily because you like the answer, but because it’s really the only legitimate one on offer. Then, you orient your actions to that reality. For goals that require long-term planning and execution, that means you just check in from time to time to see if what you expected and planned came to pass or not. Reassess and adjust as necessary.
There will always be the crowd that has to operate on the basis of wills and won’ts, even when such notions are nothing more than surface-level illusions. But if having the best chances for a successful retirement outcome are important, I don’t think being part of that crowd is going to help you. Some of them get away with it. But in the cases where they don’t, any comfort they sought from a simplistic world view, back in the beginning, often gives way to profound discomfort later on.
And profound discomfort is one of the few things that we can classify definitively: It’s safe to say you won’t like it.
By Brad Thomason, CPA
If I told you that there was a well with 100 gallons of water in it, and you knew that you used 5 gallons of water every day, it would be plain to all parties how many days the water would last.
If you had access to such a well, you would not be particularly concerned about water for the next few days.
But neither would it be lost on you that there was some significance to each trip to the well.
As a response you might consider whether or not there was something you could do to increase the amount of water in the well. Though you’d need to find a method that didn’t put what was already there in great jeopardy.
Or, you might go looking for another source of water, so that you could delay going to the well at all for the time being.
You might give some thought to trying to cut back on your water consumption. But as soon as you started to think about it a little voice in your head would point out that even if you could cut back some, you likely couldn’t cut back a lot. Certainly nowhere approaching zero. Especially if you weren’t being wasteful with the water in the first place, then there might be very little if anything you could actually do to decrease your consumption by any quantity that would matter.
Finally, even if you couldn’t find a suitable replacement, maybe you could at least get a little from somewhere else so that you could take a smaller amount from the well each trip. Even if you did that for only part of the time, it might make a difference.
How many annual trips to the retirement well do you have? When you draw out a year’s worth of money, how much is left? Are you sure you want to start going to that well, especially if you have the option to work a bit longer? Even if you no longer want to work all of the time, have you looked at the potential impact of having an ongoing income that’s quite a bit smaller than what you were accustomed to during your career – not to try to live off of, but just to slow the rate of withdrawals? It might surprise you how much difference a seemingly small amount could make.
Real wells fluctuate with rainfall and other factors, just as retirement finance is affected by investment returns, inflation and medical expenses. So neither is exactly as static as I described above. But loosely interpreted, it’s not a bad analogy. I bet you get it.
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