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3-2-1 Retirement Newsletter (1-9-2020)

Three insights, two findings, one action (January 9, 2020)

5-minute read

Terrific Thursday!

Welcome back to another 3-2-1 Thursday. I'm on a mission to deliver the most useful retirement newsletter on the web. I hope this week's edition keeps pace.



I. The hardest part of retirement is accurately defining it

The hardest part of solving a problem is accurately defining it. And when it comes to retirement, unless you clearly define what you want from it, you’ll probably end up with something less than you want. Defining retirement begins with getting clear on two things: the goals and the risks of those goals. Accurately defining your goals and the risks that stand in the way will go a long way in solving retirement problems. 


  1. Lifestyle - consistent and sustainable spending
  2. Longevity - lifetime spending no matter how long retirement lasts
  3. Legacy - assets for subsequent generations
  4. Liquidity - sufficient reserves for unexpected contingencies


  1. Longevity - running out of money
  2. Market - investment volatility
  3. Spending Shocks - unexpected expenses

II. Unfulfilling vs. Fulfilling Retirement


  • inadequate planning 
  • undefined and unmet goals
  • undefined and untreated risks
  • unfamiliar with key decisions facing retirees
  • over- or under-spending 
  • worrying about the market 
  • fear of running out of money
  • involuntary work
  • going it alone


  • planning planning planning 
  • meeting the four goals of lifestyle, longevity, legacy, and liquidity
  • treating the three risks of longevity, market, and spending shocks 
  • consistent and sustainable spending 
  • not going it alone
  • familiar with the key decisions facing retirees
  • not worried about market performance
  • team of trusted financial, legal, and tax professionals

III. Retirement does not rise to the level of your goals. It will fall to the level of your preparation.

Your goals are your desired outcome. Your preparation is the planning and action that will get you there. This year, spend less time focusing on outcomes and more on planning and actions that precede the results.


I. Retirements at Risk: A New National Retirement Risk Index

The National Retirement Risk Index (NRRI) measures the percentage of working-age households at risk of being unable to maintain their pre-retirement standard of living in retirement. It addresses one of the most compelling challenges facing the nation today: ensuring retirement security for an aging population.

Key findings in the NRRI show that:

  • The retirement landscape is shifting dramatically, making the outlook for retiring Baby Boomers and Generation Xers far less optimistic than for current retirees.
  • Fifty percent of households are “at risk” of not having enough to maintain their living standards in retirement.
  • Explicitly including health care in the Index further drives up the share of households “at risk.”
  • Saving more and working longer may substantially improve the outlook.

Source: https://crr.bc.edu/special-projects/national-retirement-risk-index/

II. Target your retirement.

If you're worried about retirement, you're not alone. Social Security benefits are not as generous as they once were. Employer pensions are increasingly scarce. And we're all concerned about how much we'll have in savings for retirement, likely to last decades. There are things you can do to dramatically improve your retirement prospects. The three most powerful things you can do are control spending, work longer and use home equity.

To help illustrate the impact of these three things on your retirement, the Financial Security Initiative at Boston College has created a tool that lets you see how controlling your spending, working longer, and using your house could improve your retirement prospects. The tool will give you a projection that provides a reasonable yardstick to see what these three things could do for you, and it helps you come up with a workable plan.


I. One task you must complete to successfully transition into retirement.

Well-established research indicates there are 15 developmental tasks you need to complete while still working to transition into retirement. 

We’ll look at one of these tasks for our action item this week and reveal a new one each week.

The completion of these tasks does not suggest a person should retire. However, failing to complete the tasks will put a successful transition into retirement at risk.

This week’s task is related to leisure and activity: You should determine the proper balance between work and leisure time.

Why this is important:

  • It will prevent boredom from excessive leisure and protect against work burnout.

  • It will establish clear boundaries between play and work.

  • It will enhance overall retirement for the retiree and partner.


Have a Question? Want to chat about it?

Get In Touch

Until next week,

Mark Sharp, CFP® RICP® EA