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Chapter 1. Tick Tock Goes the Retirement Clock > The Retirement Countdown Plan

The Retirement Countdown Plan

For you to be able to retire on your terms will require a concerted effort. Only a small percentage of Americans have the luxury of not worrying about how they will meet their post-retirement income needs. The rest of us must either be lucky or take action to establish, monitor, and achieve a plan that will result in meeting our goals. The process we will go through to establish your retirement framework is called Goal Oriented Retirement Planning, or GORP for short. GORP is the energy for your retirement plan.

GORP breaks down the process of planning for retirement into small digestible steps that create a feeling of hope and empowerment, not fear and procrastination. But hope and empowerment can only create the proper mindset for doing the work that needs to be done. Once you recognize you have to work to achieve these goals, you need to develop a plan to implement change. On a step-by-step basis over the course of this book, you will learn what is required to establish and meet your retirement goals. The following is a brief discussion of the framework from which we will work. Much greater detail can be found on GORP and applying its principles in Chapters 5, 12, and 13.

Step One: Commit to the Process

Retirement planning is a process, not an event. To achieve your goals will require a commitment of time on a regular basis. You will have to decide if this is a task you want to tackle on your own or one that requires you to enlist the help of a professional. If you choose to go it on your own, you must remember the key limitation is time, and 100 percent of the workload rests on your shoulders. If you work with a professional, you can choose the extent to which you want to seed control of certain elements of the process and take a management role. In Chapter 13, you will find a grid that will help you decide when and how to use a professional.

Step Two: Collect Information

The second step involves pulling together all kinds of data you will need as you begin to conceive and develop your plan. Included here would be information on the following:

  • Income and assets

  • Expenses and liabilities

  • Insurance

  • Legal documents

  • Tax documents

Step Three: Develop a Plan (Strategic)

Once you have collected all of the necessary information, you can start to lay out a strategic plan. It's important at this stage to keep the tactical aspects of the plan at bay until you have completed the strategic aspect. In other words, this is not the stage to start looking at mutual funds or any other investment vehicle, regardless of whether you have listed them as assets or feel compelled to buy them. This is the stage of the process at which you articulate your retirement goals and determine the cost of the individual goals.

Step Four: Implement the Plan (Tactical)

In this fourth step, you are ready to implement the plan. This is the tactical element of GORP where you match assets to goals and look at repositioning assets that have no place in your plan. One of the benefits of GORP is that there is no place for an asset that is not assigned to meeting a goal. This is also the step at which you'll take action on implementing an estate plan and you'll develop a plan for managing the various elements of risk that can impact your goals.

Step Five: Monitor and Update the Plan

The final step is to monitor and update your plan. This involves periodically reviewing your goals and the assets assigned to meeting those goals. It also involves looking at how your life may have changed and how changes affect both your goals and other elements of the plan such as tax, estate, and insurance planning. As you change jobs or are promoted within an organization, your life can change and your goals may be affected by those changes. What if your original plan assumed both you and your spouse or partner would be full-time wage earners and you chose to modify the plan to allow for one of you to stop working for 10 years to raise a family? Or, what if your lifestyle were altered in such a way that your estimate for retirement income was either too high or too low? By continuing to review and modify your plan, you increase your odds of achieving success.

Timely Tidbits

Professional and recreational climbers use GORP too. Whereas GORP in Retirement Countdown is the fuel you use to sustain your retirement, GORP to a mountain climber is a trail mix for energy. Originally, GORP was granola, oats, raisins, and peanuts, but today the term refers to any energy boost mixture.

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