A few years ago Victoria's Secret came out with their "add two cup sizes" bra. I'll admit, I was intrigued, and yes, I bought one. But I found I just couldn't wear it - I felt like a little girl playing dress up. It did make me think though... it is quite amazing how our society markets and encourages us to buy things that enhance reality; things that make us appear that we have something we don’t. This mentality can appear throughout many aspects of our lives and particularly it can show up in how you do your retirement planning. Which kind of bra does your retirement planning fit into? See which description below best describes your plan.
1. The Bombshell Spender - It's All Show But You've Got No Plan
You know the big flashy spenders; the ones with the big car and the big house? I wonder how things really look if you could take a peek behind that cushy padded lifestyle they have? A lot of the time it’s all show and no substance. The lifestyle might be built on a mountain of debt. There may be no savings at all. If this is you, get a grip. Stop pretending and take a good look at what amount of money comes in verses what goes out. You can pay off debt
and learn to live well on less
2. The Classic Overpender - Things Look Good On the Surface
Victoria’s Secret has a collection of bras somewhat like this which they call their Very Sexy collection. They describe it as “the world’s #1 push-up collection, for lift and cleavage beyond compare”. Your retirement plan fits in this category if you are what I call the classic overspender. Every day you like things to look a little nicer than they really are. You don’t spend more than you make; you don’t have a lot of debt, and so on the surface things look good. But you’re not saving enough. You need to realize if you don’t start saving more, your pushed-up lifestyle may require a serious downsize when you retire. You might want to calculate how much you’ll need to retire
so you can start planning appropriately now.
3. The Strapless - No Risk Management Policies in Your Plan
If you have no risk management policies in place, your plan belongs in this collection. The strapless retirement plan is the one where if you make one wrong move, well, things just start to fall out. Being carefree is fun, and you may have the philosophy that somehow it will all work out. Maybe it will; maybe it won't. Sometimes life throws some things at us that we don’t like. Trust me, when that happens, you're going to wish you had straps. Start by making sure you have the right kind of insurance
, as well as having an emergency fund
. Then, as you near retirement, make sure you have at least some sources of guaranteed income
4. The Sports Bra - You're Working Hard Toward a Goal
If you’re working hard toward a savings and retirement goal, this is you. Nice job! You’re putting the time in to read books, articles and finance magazines
. You have a plan and you’re tracking your progress. You’re saving diligently and you’re committed to keeping your finances on track. You know it takes work and you’re going to make sure your finances stay in shape. If you’re not there yet, but you would like your retirement plan to fit into this category start with learning about investing
right now. Just like staying in shape, managing your finances is something you have to devote regular time and attention to. If you need a trainer to help you out, consider searching for a qualified financial advisor
5. The Everyday Bra - Comfortable Because You've Got a Plan
You’ve got a plan in place. You’re saving enough to meet your goals. You have a sufficient emergency fund, the right amount of insurance, and you’re contributing to the right types of retirement plans based on your personal tax situation. When something extra comes up, you save for it before you splurge. If this is you, nice job! I bet you sleep well at night. If this isn't you but you want to get things on track you’ll have to learn the four things you must know about investing for retirement
. People who have their finances in order experience less stress. Everyone should strive to get to a place where they know their retirement plan is one they can live with every day.
6. The Romantic - You Spend on Special Occasions
You save adequately, but then on special occasions you feel the need to spend. Spending on special occasions is ok, but it’s best if you build these extras into your retirement budget
. Maybe you need to cut down on some of the everyday expenditures so there is a little more room to splurge on the special occasions. If you're used to getting bonuses to cover your extras, this works while you are working, but can turn into a problem in retirement when bonuses no longer occur. Extra items often go missing when people make retirement budgets, but if they're important to you, make sure you budget for them.