I asked them a few questions that I suggest you ask anyone you have a relationship with. I promise that it will be a fantastic conversation starter!

Here’s how our conversation started:

Take a look around you for a minute and tell me everything you see. Absolutely everything!

Assuming for a moment that you were all standing in a room with windows, here are some replies you might hear from anyone:

• Carpet
• Pen
• Paper
• Computer
• Chair
• Electrical outlet
• Window
• Car
• Steering wheel
• Tire
• Road
• Bicycle
• Basketball
• Clock
• Extension cord
• Calculator
• Ipod
• Cell phone
• Photo
• Lampshade
• Light switch
• Book
• Newspaper
• Magazine
• Candle
• Shutters
• Boat
• Roofing shingles
• Magnetic white board
• Printer
• Fork
• Granola bar
• Glass of Water

After receiving this extensive list, here’s a follow-up question to ask:

What role did you personally play in the idea, the creation, the design, the manufacturing, or the distribution of any of the items you listed?

Most common answer: “absolutely nothing”!

Follow-up Question:

Given your answer, how often do you pause, take a step back, and have an enormous sense of appreciation for everything you have at your disposal without you having had to contribute in any way, shape, matter, or form to creating or developing it?

How’s that for changing someone’s state?

It really is a great question. You can’t help but conclude: “what an unbelievable world we live in!”

It’s certainly stops any whiner who has an entitlement attitude dead in their tracks.

The Trader Principle

My conversation with Caroline and Michael continued from there about the “trader principle” which is something that I believe everyone needs to revisit on a regular basis.

The trader principle states that it’s immoral to use any form of force or fraud to obtain anything in life, i.e. like anything on the list above.

Instead, in order to obtain what you want, you must offer up and “trade” value. And, each party to the transaction is free to arrive at the decision to part with some value they bring to the table in exchange for another value they have a greater desire for.

So, for example, if Caroline and Michael set up a lemonade stand at the end of our driveway on a hot day and offered up large glasses of cold lemonade (a value), it’s completely moral for a visitor to offer up 50 cents(value to Michael and Caroline) in exchange for that cold glass of lemonade.

Each party arrived at the transaction with a value to offer and they made a mutually beneficial exchange.

In contrast, had someone come by and forced Caroline and Michael to provide them with a cold glass of lemonade without offering up something of value in exchange acceptable to them, it would be immoral and wrong.

And, if they lobbied a third party to somehow extract the cold glass of lemonade for no value in return, that would also be immoral.

The Trader Principle Lesson

First, begin by having an enormous sense of appreciation for everything that has been created by others that makes your life better.

And, don’t stop with obvious technological advances. Just look at that random list above.

Second, understand that in order to obtain the value that others have produced, you have to produce some sort of value in order to freely exchange it with them. Just because you claim to have a want or a need doesn’t obligate anyone to provide it.

And, just as you’re free to decide not to exchange value with them, they are free to exchange value with you or not. No force or fraud is allowed to get what you want.

Third, given this principle, you have to constantly focus your energy on how to be of greater, and greater, and greater value. And, recognize that the level of value is not decided by you or any other third party. It’s decided by the individual you’re asking to part with money (or some other value you desire) in exchange for it.

Finally, soak up the fact that you live in a country where, for the most part, you’re free to pursue whatever it is that you value as long as you don’t use force or fraud to prevent someone else from doing the same.

Both Caroline and Michael agreed that they like living in THAT world. Especially after I described the alternative like the 13^th century world portrayed in the classic novel Pillars of the Earth by Ken Follett.

In that world, the freedoms required in order to exercise the Trader Principle did not exist. Everything was obtained using force or fraud.

A little contrast goes a long way.

Committed To Your Relaxing Retirement,

Jack Phelps, ChFC

The Retirement Coach

P.S.: HELP spread the news! If you have a friend, family member, or co-worker who would enjoy receiving my Retirement Coach “Strategy of the Week”, please pass it on. Simply provide their name and email address to info@TheRetirementCoach.com. Or they can subscribe at our website!

Thank you!

I recently had a great conversation with my daughter Caroline (age 12) and my son Michael (age 10) that I’d like to share with you.

I asked them a few questions that I suggest you ask anyone you have a relationship with.  I promise that it will be a fantastic conversation starter!

Here’s how our conversation started:

Take a look around you for a minute and tell me everything you see.  Absolutely everything!

Assuming for a moment that you were all standing in a room with windows, here are some replies you might hear from anyone:

• Carpet
• Pen
• Paper
• Computer
• Chair
• Electrical outlet
• Window
• Car
• Steering wheel
• Tire
• Road
• Bicycle
• Basketball
• Clock
• Extension cord
• Calculator
• Ipod
• Cell phone
• Photo
• Lampshade
• Light switch
• Book
• Newspaper
• Magazine
• Candle
• Shutters
• Boat
• Roofing shingles
• Magnetic white board
• Printer
• Fork
• Granola bar
• Glass of Water

After receiving this extensive list, here’s a follow-up question to ask:

What role did you personally play in the idea, the creation, the design, the manufacturing, or the distribution of any of the items you listed?

Most common answer: “absolutely nothing”!

Follow-up Question:

Given your answer, how often do you pause, take a step back, and have an enormous sense of appreciation for everything you have at your disposal without you having had to contribute in any way, shape, matter, or form to creating or developing it?

How’s that for changing someone’s state?

It really is a great question.  You can’t help but conclude: “what an unbelievable world we live in!”

It’s certainly stops any whiner who has an entitlement attitude dead in their tracks.

The Trader Principle

My conversation with Caroline and Michael continued from there about the “trader principle” which is something that I believe everyone needs to revisit on a regular basis.

The trader principle states that it’s immoral to use any form of force or fraud to obtain anything in life, i.e. like anything on the list above.

Instead, in order to obtain what you want, you must offer up and “trade” value.  And, each party to the transaction is free to arrive at the decision to part with some value they bring to the table in exchange for another value they have a greater desire for.

So, for example, if Caroline and Michael set up a lemonade stand at the end of our driveway on a hot day and offered up large glasses of cold lemonade (a value), it’s completely moral for a visitor to offer up 50 cents(value to Michael and Caroline) in exchange for that cold glass of lemonade.

Each party arrived at the transaction with a value to offer and they made a mutually beneficial exchange.

In contrast, had someone come by and forced Caroline and Michael to provide them with a cold glass of lemonade without offering up something of value in exchange acceptable to them, it would be immoral and wrong.

And, if they lobbied a third party to somehow extract the cold glass of lemonade for no value in return, that would also be immoral.

The Trader Principle Lesson

First, begin by having an enormous sense of appreciation for everything that has been created by others that makes your life better.

And, don’t stop with obvious technological advances.  Just look at that random list above.

Second, understand that in order to obtain the value that others have produced, you have to produce some sort of value in order to freely exchange it with them.  Just because you claim to have a want or a need doesn’t obligate anyone to provide it.

And, just as you’re free to decide not to exchange value with them, they are free to exchange value with you or not.  No force or fraud is allowed to get what you want.

Third, given this principle, you have to constantly focus your energy on how to be of greater, and greater, and greater value.  And, recognize that the level of value is not decided by you or any other third party.  It’s decided by the individual you’re asking to part with money (or some other value you desire) in exchange for it.

Finally, soak up the fact that you live in a country where, for the most part, you’re free to pursue whatever it is that you value as long as you don’t use force or fraud to prevent someone else from doing the same.

Both Caroline and Michael agreed that they like living in THAT world.  Especially after I described the alternative like the 13^th century world portrayed in the classic novel Pillars of the Earth by Ken Follett.

In that world, the freedoms required in order to exercise the Trader Principle did not exist.  Everything was obtained using force or fraud.

A little contrast goes a long way.

Committed To Your Relaxing Retirement,

Jack Phelps, ChFC

The Retirement Coach

P.S.: HELP spread the news! If you have a friend, family member, or co-worker who would enjoy receiving my Retirement Coach “Strategy of the Week”, please pass it on. Simply provide their name and email address to info@TheRetirementCoach.com. Or they can subscribe at our website!

Thank you!

After its 12% sprint until it peaked on April 2^nd, the S&P 500 has retreated 5% or so as I write this.

And, you know what’s coming next. We’ve seen it before. Things were just too good. The bubble’s now going to burst and we’re in for a major market freefall!

Okay, hold the presses for a minute.

What do you think?

Is this news?

Or, is this just normal market behavior?

For the news organization who makes their money by selling advertising space, not by providing financial advice, this qualifies as news, and a good piece of it at that!

If markets simply plodded along each day without much movement, news organizations would be in chaos. Things simply wouldn’t be exciting enough to report and prognosticate on.

This wonderful “news-making” gizmo called the stock market is one of the most profitable tools in their toolbox.

Every day, it goes up or it goes down which qualifies as “news, i.e. something “new” to report that will capture our audience’s attention and, hopefully, keep them tuned in for more each and every day.

News…or Just Normal?

As a rational, long term owner of shares of the great companies of the world, this does not, and cannot qualify as news.

Why?

Because the stock market retreating 5% is nothing new. And, certainly nothing worthy of any consideration in terms of altering your investment plans. Just as market prices shooting up 12% in the first quarter of 2012 didn’t alter your plans.

If you’re not already aware of this, here’s a terrific statistic to plant in your memory during cooling off periods like this: the average peak to trough “intra-year” drop in the price of the S&P 500 Market Index is 14%.

Let me repeat and clarify that for a moment because it’s a very, very important fact:

In any given year, the average percentage drop that we’ve experienced at some point during that year is 14%. In other words, if you take a look at the high and low points of each year, you’ll see an average price drop of 14%.

What we can take away from that is that it’s completely “normal” for the stock market to have cooling off periods during any given year.

It shouldn’t necessarily give you the “warm and fuzzies” and lead you to celebrate, but it also doesn’t qualify as a phenomenon worthy of panic.

Unfortunately, this is not how the overwhelming majority of retirees think and behave. They spend their lives in constant reaction to everything which leads them to make the same costly mistakes over and over again.

Feel proud of the fact that you’re not one of them.

Committed To Your Relaxing Retirement,

Jack Phelps, ChFC

The Retirement Coach

P.S.: HELP spread the news! If you have a friend, family member, or co-worker who would enjoy receiving my Retirement Coach “Strategy of the Week”, please pass it on. Simply provide their name and email address to info@TheRetirementCoach.com. Or they can subscribe at our website!

Thank you!

Extra…Extra…read all about it!  The stock market’s in turmoil (again).

After its 12% sprint until it peaked on April 2^nd, the S&P 500 has retreated 5% or so as I write this.

And, you know what’s coming next.  We’ve seen it before.  Things were just too good.  The bubble’s now going to burst and we’re in for a major market freefall!

Okay, hold the presses for a minute.

What do you think?

Is this news?

Or, is this just normal market behavior?

For the news organization who makes their money by selling advertising space, not by providing financial advice, this qualifies as news, and a good piece of it at that!

If markets simply plodded along each day without much movement, news organizations would be in chaos.  Things simply wouldn’t be exciting enough to report and prognosticate on.

This wonderful “news-making” gizmo called the stock market is one of the most profitable tools in their toolbox.

Every day, it goes up or it goes down which qualifies as “news, i.e. something “new” to report that will capture our audience’s attention and, hopefully, keep them tuned in for more each and every day.

News…or Just Normal?

As a rational, long term owner of shares of the great companies of the world, this does not, and cannot qualify as news.

Why?

Because the stock market retreating 5% is nothing new.  And, certainly nothing worthy of any consideration in terms of altering your investment plans.  Just as market prices shooting up 12% in the first quarter of 2012 didn’t alter your plans.

If you’re not already aware of this, here’s a terrific statistic to plant in your memory during cooling off periods like this: the average peak to trough “intra-year” drop in the price of the S&P 500 Market Index is 14%.

Let me repeat and clarify that for a moment because it’s a very, very important fact:

In any given year, the average percentage drop that we’ve experienced at some point during that year is 14%. In other words, if you take a look at the high and low points of each year, you’ll see an average price drop of 14%.

What we can take away from that is that it’s completely “normal” for the stock market to have cooling off periods during any given year.

It shouldn’t necessarily give you the “warm and fuzzies” and lead you to celebrate, but it also doesn’t qualify as a phenomenon worthy of panic.

Unfortunately, this is not how the overwhelming majority of retirees think and behave.  They spend their lives in constant reaction to everything which leads them to make the same costly mistakes over and over again.

Feel proud of the fact that you’re not one of them.

Committed To Your Relaxing Retirement,

Jack Phelps, ChFC

The Retirement Coach

P.S.: HELP spread the news! If you have a friend, family member, or co-worker who would enjoy receiving my Retirement Coach “Strategy of the Week”, please pass it on. Simply provide their name and email address to info@TheRetirementCoach.com. Or they can subscribe at our website!

Thank you!

Wellesley, MA – May 16, 2012 – Jack Phelps, founder of The Relaxing Retirement Coach, a Retirement Coaching company, recently published a blog on his website (http://www.theretirementcoach.com) providing guidelines for portfolio rebalancing. The blog, titled “Rebalancing Guidelines” highlights four important issues for retirees to consider.

Jack Phelps writes, “Previously, we introduced Principle and Guideline #4 which is, once you have your investment system in place and your allocation correct, you must objectively evaluate and rebalance your investments (if necessary) on a pre-determined timeframe. In other words, you can’t leave it up to a whim.”

The Relaxing Retirement Coach, Inc. provides their members with the ‘missing structure’ they need to make a seamless and relaxing transition to their retirement years so they can confidently do everything they want to do without worrying about money.  Their Relaxing Retirement Coaching Program™ provides members with a personalized, one-on-one retirement coaching relationship with constant attention to each and every detail necessary for them to consistently enjoy a relaxing retirement experience.

The entire blog can be found at http://www.theretirementcoach.com/blog/rebalancing-guidelines-4.php

To learn more about The Relaxing Retirement Coach, Inc., please visit http://www.theretirementcoach.com

About Jack Phelps

Prior to developing The Relaxing Retirement Coaching Program^™ back in 1994, Jack spent five years as a registered representative with Prudential Financial Services. In 1992, he received his Chartered Financial Consultant designation from The American College in Bryn Mawr, Pennsylvania. In 1989, Jack graduated from Holy Cross College in Worcester, Massachusetts with a B.A. in Economics.

Otherwise, it’s highly likely that you’re going to part ways with a lot more of your hard earned money in taxes over the course of your lifetime than you are legally required to pay.

In this Retirement Coach Strategy of the Week, let’s talk about another very important reason why you want to give careful thought as to “where” you’re going to hold your different styles of investments in your retirement years.

As a brief warning, I will admit that this gets a little technical, but I think it’s worth knowing if you want to reduce your tax burden and keep more of what you’ve worked so hard to save.

Required Minimum Distribution

In order to illustrate this, let’s briefly discuss the IRS Required Minimum Distribution (RMD) rules on your IRA.

Within guidelines, you can deposit money to your IRA (or company sponsored 401(k), 403(b), or 457-MA Deferred Compensation Plan) and defer all income taxes on the growth of that money until you make a withdrawal.

However, there are additional rules governing withdrawals from your IRA. First, if you withdraw money from your IRA prior to age 59 ½, in addition to paying income taxes on the amount you withdraw, you will also pay a 10% excise penalty tax in most cases. (There are a few exceptions as we outlined in a recent Strategy)

The second rule that you must follow is that beginning in the year that you turn 70 ½, the IRS requires you to withdraw a certain amount from your IRA (Required Minimum Distribution) and pay income taxes. The amount you must withdraw is based on the value of your IRA and your life expectancy.

For obvious reasons, this rule is in place is to make sure the federal government gets their tax money back!

Not Optional

Here’s the key point: whether you “need” the money to spend or not, they force you to withdraw and start paying taxes on the money you’ve saved.

This is where the problem comes in. What if they require you to withdraw $80,000 from your IRA this year, but you only want to withdraw $40,000 for your supplemental income needs?

You probably already know the answer: you have to withdraw and pay taxes on all $80,000!

Knowing this, if you’ve done your planning correctly, and you know that you’re not going to “need” to withdraw as much from your IRA at age 70 ½ as the IRS is going to “require” you to withdraw, what can you do about it?

“Where” You Hold Different Styles of Investments

Well, this loops back to last week’s Strategy and why it’s so important to simultaneously understand the tax implications when you make investment decisions, i.e. “where” you’re going to place different styles of investments.

As we did in last week’s Strategy, let’s make the assumption that you know the investment rate of return that you must earn (huge point), and that you’ve crafted your investment allocation to produce that return you need to earn among stocks, bonds, money markets, etc.

Assuming that half your money is in tax deferred accounts (IRA, 401(k), 403(b), etc.), and the other half of your money is not, “where” should you hold each style of investment (i.e. stock funds, bond funds, etc.)?

Given historical ‘long term’ results, equities (stocks) have typically outperformed fixed income investments (bonds and money markets) by a long shot. (While this is certainly not a lock in the short term, it certainly has been over the long term)

If we make the assumption that your stock funds will grow much faster over the long run than your fixed income funds, is it better to hold your stock funds inside or outside of your IRA?

The answer is outside your IRA! But, as opposed to the reasons outlined in last week’s Strategy, this time, it’s for a potentially different reason.

The Bigger the Balance, the More You Must Withdraw

Think about the Required Minimum Distribution that you must take from your IRA each year beginning at age 70 ½. The amount you must withdraw is based on:

• the amount of money in your IRA (the bigger the balance, the more you have to withdraw), and
• your age (life expectancy)

If you position the stock portion of your investments inside your IRA, and long term historical results continue, your IRA may be a lot bigger at age 70 ½ and beyond than if you had allocated your fixed income investments inside your IRA instead.

If the balance of your IRA is bigger, you may be required to withdraw more and more each year.

And, the more you have to withdraw, the bigger your tax bill will be!

Now, you may be asking, “are you saying that I shouldn’t want my investments to grow?”

No. What I’m saying is that if you’re going to hold some of your money in stock investments, and some of your money in fixed income investments, given the choice, holding your stock investments outside your IRA may lead you to pay significantly less in taxes.

As I stated at the beginning, this is a little technical, but if you follow the logic, it could mean big tax savings for you over the rest of your life.

This is just another example of how critical it is to never make investment decisions in a vacuum at this stage in your life. You must be simultaneously thinking, “what vehicle should I invest in, and where should I position this investment in order to pay the least amount of taxes now and in the future?”

Committed To Your Relaxing Retirement,

Jack Phelps, ChFC

The Retirement Coach

P.S.: HELP spread the news! If you have a friend, family member, or co-worker who would enjoy receiving my Retirement Coach “Strategy of the Week”, please pass it on. Simply provide their name and email address to info@TheRetirementCoach.com. Or they can subscribe at our website!

Thank you!

Last week, we talked about how important it is to make your investment planning decisions simultaneously with your tax planning decisions during this critical phase in your life.

Otherwise, it’s highly likely that you’re going to part ways with a lot more of your hard earned money in taxes over the course of your lifetime than you are legally required to pay.

In this Retirement Coach Strategy of the Week, let’s talk about another very important reason why you want to give careful thought as to “where” you’re going to hold your different styles of investments in your retirement years.

As a brief warning, I will admit that this gets a little technical, but I think it’s worth knowing if you want to reduce your tax burden and keep more of what you’ve worked so hard to save.

Required Minimum Distribution

In order to illustrate this, let’s briefly discuss the IRS Required Minimum Distribution (RMD) rules on your IRA.

Within guidelines, you can deposit money to your IRA (or company sponsored 401(k), 403(b), or 457-MA Deferred Compensation Plan) and defer all income taxes on the growth of that money until you make a withdrawal.

However, there are additional rules governing withdrawals from your IRA.  First, if you withdraw money from your IRA prior to age 59 ½, in addition to paying income taxes on the amount you withdraw, you will also pay a 10% excise penalty tax in most cases. (There are a few exceptions as we outlined in a recent Strategy)

The second rule that you must follow is that beginning in the year that you turn 70 ½, the IRS requires you to withdraw a certain amount from your IRA (Required Minimum Distribution) and pay income taxes.  The amount you must withdraw is based on the value of your IRA and your life expectancy.

For obvious reasons, this rule is in place is to make sure the federal government gets their tax money back!

Not Optional

Here’s the key point: whether you “need” the money to spend or not, they force you to withdraw and start paying taxes on the money you’ve saved.

This is where the problem comes in.  What if they require you to withdraw $80,000 from your IRA this year, but you only want to withdraw $40,000 for your supplemental income needs?

You probably already know the answer: you have to withdraw and pay taxes on all $80,000!

Knowing this, if you’ve done your planning correctly, and you know that you’re not going to “need” to withdraw as much from your IRA at age 70 ½  as the IRS is going to “require” you to withdraw, what can you do about it?

“Where” You Hold Different Styles of Investments

Well, this loops back to last week’s Strategy and why it’s so important to simultaneously understand the tax implications when you make investment decisions, i.e. “where” you’re going to place different styles of investments.

As we did in last week’s Strategy, let’s make the assumption that you know the investment rate of return that you must earn (huge point), and that you’ve crafted your investment allocation to produce that return you need to earn among stocks, bonds, money markets, etc.

Assuming that half your money is in tax deferred accounts (IRA, 401(k), 403(b), etc.), and the other half of your money is not, “where” should you hold each style of investment (i.e. stock funds, bond funds, etc.)?

Given historical ‘long term’ results, equities (stocks) have typically outperformed fixed income investments (bonds and money markets) by a long shot.  (While this is certainly not a lock in the short term, it certainly has been over the long term)

If we make the assumption that your stock funds will grow much faster over the long run than your fixed income funds, is it better to hold your stock funds inside or outside of your IRA?

The answer is outside your IRA!  But, as opposed to the reasons outlined in last week’s Strategy, this time, it’s for a potentially different reason.

The Bigger the Balance, the More You Must Withdraw

Think about the Required Minimum Distribution that you must take from your IRA each year beginning at age 70 ½. The amount you must withdraw is based on:

• the amount of money in your IRA (the bigger the balance, the more you have to withdraw), and
• your age (life expectancy)

If you position the stock portion of your investments inside your IRA, and long term historical results continue, your IRA may be a lot bigger at age 70 ½ and beyond than if you had allocated your fixed income investments inside your IRA instead.

If the balance of your IRA is bigger, you may be required to withdraw more and more each year.

And, the more you have to withdraw, the bigger your tax bill will be!

Now, you may be asking, “are you saying that I shouldn’t want my investments to grow?”

No. What I’m saying is that if you’re going to hold some of your money in stock investments, and some of your money in fixed income investments, given the choice, holding your stock investments outside your IRA may lead you to pay significantly less in taxes.

As I stated at the beginning, this is a little technical, but if you follow the logic, it could mean big tax savings for you over the rest of your life.

This is just another example of how critical it is to never make investment decisions in a vacuum at this stage in your life. You must be simultaneously thinking, “what vehicle should I invest in, and where should I position this investment in order to pay the least amount of taxes now and in the future?”

Committed To Your Relaxing Retirement,

Jack Phelps, ChFC

The Retirement Coach

P.S.: HELP spread the news! If you have a friend, family member, or co-worker who would enjoy receiving my Retirement Coach “Strategy of the Week”, please pass it on. Simply provide their name and email address to info@TheRetirementCoach.com. Or they can subscribe at our website!

Thank you!

It’s been a great home. You know every inch of it, and you’ve taken miraculous care of it over the years.

The memories of your three children being born and taking their very first steps here will be etched in your mind forever.

But, now they’re all grown up and have families of their own.

You’ve been retired for seven years and the ten room home that served your family so well has become a burden you no longer wish to manage.

So, as much as you hate to do it, and against the wishes of your children who want to ‘keep the house in the family’, it’s time to sell your home and downsize.

Fortunately, a close family friend is a realtor and she helps you get your home ready to showcase to potential buyers.

The house is in great shape, and it’s in a very desirable neighborhood, so selling it should be no problem.

Three weeks later, after two open houses and multiple showings, you receive a very good offer subject to a typical home inspection.

You’re thrilled that everything has gone according to plan. And, especially over the fact that you no longer have to keep your home in “showcase” mode!

Three days later, the buyers and their home inspector spend three hours going through all the checkpoints.

It’s all just a formality now. The purchase and sale agreement (P&S) is next and you’ll have your 10% deposit and a closing date within a day.

Not So Fast

At 8:15 that evening, you receive a phone call from your realtor. She goes on to explain that the inspection report revealed some issues that the buyers want resolved before signing a P&S.

At first glance, it appeared to be just a formality according to your realtor. However, it’s surprising that there are issues because you’ve taken such good care of your home and you’ve never experienced any issues.

The inspection report revealed that you have a small sample of termites, a mold issue in your attic, and that your septic system doesn’t appear to be within code.

How could this be? You’ve had your pest control company out every three years. And, how could your septic system be out of code?

This doesn’t sound good.

Unfortunately, it gets worse. The carpenter and pest control folks were able to deal with the termite issue, but it required replacing a support beam which turned into a major project because an entire ceiling had to be opened up to gain access to it.

Next came the ‘mold’ issue. It turns out that you have a small sample of mold in your attic which necessitates that they inspect and run mold tests in every room of your home.

The results reveal that, although the problem is not severe, it requires three days worth of work in your home to rectify it, and you have to vacate your home while they do the work.

Finally, there’s the septic issue. It turns out that when you had an addition put on your home 16 years ago, your contractor didn’t properly record the work with your town.

This is getting out of hand! In order to fix this, you have to hire a real estate attorney to run a title search and track down the contractor to put a timeline on the events. Of course the contractor is out of business now and nowhere to be found which makes the task even more difficult.

It was hard enough to arrive at a decision to sell your home. Now this!

Paying for all of this was certainly not in your plans, but that’s not the worst of it.

As each new piece of information was revealed, the buyers began to question everything. At first, they were very cordial and you could tell they really wanted the house.

But, as time went on, the exchanges became less friendly as their demands increased.

Not only did they want all of these issues rectified on your dime, but they also wanted to reduce their offer price.

Finally, after two days of back and forth negotiating, they withdrew their offer and walked away.

Now, you have to start all over again.

The Lesson and Strategy

What’s the lesson in all of this? And, how could it all have been avoided?

While there’s no way to avoid the issues that were discovered with your home, you can control who discovers them and when they’re discovered?

The solution is to hire an independent home inspector prior to putting your home on the market.

This way, you can discover and rectify everything before showing your home with full confidence that everything is under control.

Yes, you would still have had to face the costs to rectify everything. But, it wouldn’t have killed the deal with your buyer and your home would be sold which is your goal in the first place.

Selling and purchasing a home is such an emotional experience. When purchasing, you want everything to be perfect. The reason you make an offer is the home appears to be exactly what you want.

When, little by little, “issues” and “problems” pop up, your confidence in your decision begins to erode, even though the problems get rectified.

It places seeds of doubt which, ultimately, kills the deal.

Don’t allow this to happen to you. Hire an independent home inspector prior to placing your home on the market.

What a day!

There is so much we can all learn closely observing the Boston Marathon. The analogies to the retirement stage in life you’re experiencing right now are so compelling, and the lessons from studying it are too important not to take note of.

What is so interesting is how differently you have to physically and ‘mentally’ prepare for a marathon vs. a 5k (3.1 miles) or a 10k race (6.2 miles). The preparation for each of them bears very little resemblance, even though you’re running in both situations.

When you know you only have 3.1 or 6.2 miles to run, you can really let loose and run at a faster-than-normal pace because you know you don’t have too far to run. Even if you’re out of your ‘comfort zone’ the entire race, you know it will be short lived.

The BIGGEST Difference

With a marathon, everything changes drastically. 26.2 miles is a long way to go by anyone’s standards. And, accordingly, your strategy and mindset have to be completely different or you’ll never finish.

To begin with, this is NOT a race. It’s a marathon. You can always tell the amateurs at any race because they all sprint right out of the gate. They all get so caught up in the emotions of the race that they lose sight of the goal which, first and foremost, is to finish.

You have to prepare and have a long term pacing strategy. You do this by knowing what pace you can comfortably run for long distances. You develop this over months of short, intermediate, and long distance runs where you time yourself so you have a measuring stick.

During the race, you have to constantly be checking your pace so you can make sure you’re not running too fast, or too slow.

You have to prepare to deal with the “elements”. Take this year for example. Fortunately, Boston experienced a mild winter, so the training conditions were superb.

However, temperatures on race day this year topped out at 90 degrees! This curveball changed everything for each and every runner as they all had to adjust their goals in order to survive!

Finally, you’ve got to deal with injuries. This means preventing them from occurring in the first place by training correctly, and dealing with those that occur anyway. Injuries are inevitable if you’re going to run a marathon.

The Strategy

So, how do the intimate details of training for and running a marathon help you? Well, if you stop and think about it, there’s a perfect analogy to investing at this stage in your life. And, there’s a ton we can all learn by the discipline and stamina necessary to complete a marathon.

Like a marathoner, you’re in this for the long run. The money that you’ve so carefully saved and built up over your working years must now support you for the rest of your life. That requires a great deal of preparation and stamina. It doesn’t just happen by accident.

If you get caught up in the “emotions” of the market each day, and you don’t have the correct mindset and long-term strategy, you could very well run out of money.

With rapidly increasing technology and the proliferation of the mass media through television, talk radio, newspapers, magazines, and the internet, it’s easy to lose sight of the long term and get distracted.

It requires serious restraint, discipline, and stamina on your part.

The challenge for you is that, for all intents and purposes, the race to save more money is over. Chances are great that you’re not going to add too much more to your Retirement Bucket™. Instead, you’re now going to be withdrawing some of the money you’ve saved to live on.

From my 23 years of coaching so many of you, I can tell you that making that transition requires a significant amount of confidence. And, it doesn’t matter how much money you have. It just doesn’t feel normal for anyone!

That’s why it’s so important to have a disciplined, well thought out “system” of decision making about your money at this stage in your life.

Now, it’s true that following a carefully thought out, disciplined, custom-designed plan is not as glamorous as reading about the latest trendy investment and wondering why you’re not invested in it.

Or, checking out where the market is 3 times a day, or listening to pundits on television or talk radio argue over what’s the “best” thing for “everyone” to do (and believing that it applies to your unique situation).

However, you can’t afford to be tantalized by all of that at this stage in your life. You, too, are running a marathon. And, that requires a very specific “marathon mindset”.

Late last year, we received a very sad phone call from Susan, a young woman who was calling on behalf of her mom, Jane. Jane, age 64, was referred to us by her best friend (a Relaxing Retirement member).

The reason for the call was Jane’s husband Charlie had recently passed away after suffering a massive heart attack at the young age of 66.

Jane’s daughter Susan shared with me how difficult and overwhelming all of this was for her mom after suddenly losing her husband of 45 years.

In addition to dealing with the emotional trauma, Jane and her three grown children quickly discovered that they now had a host of problems that they had to deal with immediately.

And, they had no idea where to start.

Charlie was classic “old school” and kept all of his information and plans tight to the vest. The kids knew absolutely nothing about their parents’ affairs, and unfortunately, Jane wasn’t in the loop on much either.

Our Meeting with Jane and Her Kids

Jane’s son Kevin, and her two daughters, Susan and Laura, brought her to our office. Jane put up a strong front, but we could all see how devastated she was.

What we learned was that Kevin is married, has 2 children, and lives in Atlanta. Laura is married with three children and lives in Chicago. And, Susan is married with one daughter and another on the way. Susan’s lives locally so she organized everything.

As they all explained, Charlie was a real rugged individualist, a do-it-yourselfer, and a pack rat. Charlie paid all the bills, did all the banking, prepared and filed their income taxes each year, handled all of their investments, created their wills on-line, and purchased their insurances.

Because of this, Jane and her children had no clue where to begin. They didn’t know:

1. Who to contact
   1. Doctors?
   2. Friends?
   3. Professionals?
      • Attorney, financial advisor, insurance agent, or CPA?
2. What funeral arrangements had been made
3. What Charlie wanted in his obituary
4. If they had a will or trust (Jane knew that Charlie had done something, but it was so long ago that she couldn’t remember any details),
5. If Charlie had life insurance (Jane remembered him purchasing insurance, but had no idea if it was still in effect, and with what company)
6. The password to their fireproof safe
7. The keys to their safe deposit box at the bank
8. Passwords to files on Charlie’s computer
9. What bills to pay to stay current and maintain good credit
10. Which insurance bills to pay and which to stop paying
11. What vendors to contact
12. How to handle their income taxes because Charlie prepared them himself each year
13. Where Jane’s income will now come from
1. Veteran’s services (since Charlie was a veteran)
2. Social Security
3. Charlie’s pension:
   • Was there a joint and survivor benefit? How much?
14. What investments they owned:
1. 3 brokerage accounts: Merrill Lynch, Fidelity, and Scotttrade
2. IRAs
   • There were no Inherited IRA instructions
3. Roth IRA
4. Charlie’s 401(k) which was still being held at his former employer
5. Limited partnerships

In short, it was a complete mess because Charlie left no instructions for anything, and hadn’t included Jane in any of his planning.

Jane felt helpless (and foolish), and Kevin, Laura, and Susan felt terrible because they didn’t know how to help their mom.

They didn’t know where to begin…

Never Again!

After going through this heartbreaking process with Jane and her children, it led me to conclude that we’ll never allow this to happen to one of our Relaxing Retirement members!

So, over the last eight months, we’ve created your solution to this horrific problem which you are now holding in your hands.

“What To Do When I’m No Longer Here” is the tool that everyone has been searching for to help them remove this enormous burden from their family.

My Recommendation For You

As difficult as this may be to do given the scope and underlying purpose of this project, try to put yourself in the shoes of your heirs. Try to picture them anxiously attempting to carry out your wishes, but without your presence to guide them.

Assume they don’t know anything that you know. Because of this, I recommend being as thorough and clear as you can.

To make this as simple as possible for you and your heirs, we’ve created a CHECKLIST under Tab 2, and we’ve broken it down into two subsections:

• “Immediately”, and
• “After the Funeral”

Each bullet point references the location of specific information you’ll provide for your heirs. For example: “see List in Tab 3”.

If you have any questions, require any assistance completing this for your family, please don’t hesitate to call us at (781) 235-7550, or email us at info@TheRetirementCoach.com.

We look forward to helping you make this as seamless as possible for you and your family.