I love watching “The Voice” and “Parenthood”, and my kids are huge fans of Peppa Pig, Jake and The Neverland Pirates, and Caillou. With almost all these shows we program our DVR to allow us to watch our shows when we want to. It's a huge convenience factor for us. It takes just a few minutes to tell our DVR to always record these shows when they are on.
However, while reading fellow blogger's monthly net worth updates it dawned on me…how many people spend time planning their retirement? Do you look at your 401k at least once a week? How about your checking account and watching for overdrafts or unauthorized charges?
In my own life over the last year I'd probably say I spend about 4-6 hours per year planning/reviewing/modifying my retirement. I'd probably say that I'm above the norm when it comes to that area. I would think that 1 hour per month or 12 hours per year would be a great minimum to start with, because how important retirement should be to everyone. So I've got some room to improve! :)
Here are a few reasons why you (and I) should spend more time planning your retirement vs figuring out how to program your DVR.
- Put Your Retirement on Auto Pilot – I love how easy programming my DVR to record EVERY episode of shows I like! My DVR is reliable like that, and it only takes a few minutes initially to do this. With your finances, the more you can automate the easier managing your finances will be. This includes automatic investing into your Roth or 401k, automating bills, and direct deposit into your fixed expenses account (read my reasons for having a separate account for this). A couple of options to consider would be Credit Unions, American National of Omaha, Bankwest, and smaller community banks (like in “It's a Wonderful Life” :) ). Plus, if you automate your retirement investing, then it won't feel like it's as much “work” and will ensure it gets done. Just like programming my DVR ensures my kids will eventually be able to watch “Austin and Alley”. (That show annoys me!)
- Re-balance Your Portfolio – re-balancing is kinda like telling your DVR, “I no longer want to watch that show, so stop recording it“. In my mind, this again takes 5 minutes but saves tons of recording time and space on my DVR. With re-balancing, it is an opportunity to say “I would like to lower my bond exposure“or “I'm getting close to retirement so I may want to have no stocks in my portfolio”. Over time certain funds will outperform others, and it's important to revisit this at least once a year.
- Chart If You Are On Track – I love how my DVR has a guide and shows me what programs are coming up, and what will be recorded. With your own retirement it is extremely helpful to take the time to see if you are on track. By J$ and DINKs taking the time each month this undoubtedly helps them monthly review their spending, savings, and overall retirement picture. With most planning tools (excel) :) this takes a lot of manual labor, but there a lot of online tools that will help in this area (like Quicken). Take the time to chart your progress (or digress), and it will help keep you on track.
- Adjust Your Risk Tolerance – during the 2008 financial crisis, many people were caught overexposed to stocks, and not really understanding their tolerance for volatility. While stocks (or any asset class for that matter) go up people will always say “I think my risk tolerance is high“, but not when the “you know what” hits the fan.
- Modify Contribution Levels – about every 6-9 months I call my cable provider to see if I can get my bill lowered. Whether it be through removing channels or accepting some special discount offers. The same concept can be applied to your retirement. Look at what percentage you are contributing, and see if you need to make any adjustments. Point of reference – Dave Ramsey typically recommends contributing at least 15% to retirement after having your emergency fund set up.
- Adjust For Life Circumstances – as my kids have grown up they've gone from watching Barney to Sesame Street to The Last Airbender. Along the way, we've made adjustments to our DVR based on our kids' age. The same concept can be applied to your retirement planning. When you have a baby you may not be able to contribute as much to retirement. Or when your kids are in high school, then you may want to contribute more to their 529 plans. The point is that changes might be needed based on your family's age.
So these are just a few funny reasons why I think it's more important to spend time planning your retirement vs your DVR. What else do you do in planning for retirement? How much time do you spend planning your retirement? What are your favorite shows to DVR? :)
Great way to get readers interested in keeping on top of investments. This is such an important process that most of us neglect. Rebalancing a portfolio over time is extremely important as various parts of a portfolio perform differently and risk tolerance, aging and life events and priorities change. I would also point out that as an estate planning attorney readers should also review their estate plan and if they do not have one get one immediately. Otherwise, the state will decide who gets your wealth. Wills, trusts, living wills/advance medical directives and durable power of attorney are part of a comprehensive estate planning program.
Thanks Jules! My kids also like watching old school videos on youtube too. My old favorites was gummy bears, which I use to watch on Saturday mornings! Also Thundercats was a big after school winner during my youth! Thundercats HOOO!!!!!
What a great way to compare the two concepts. Definitely food for thought! I gave up on keeping up on any of my shows because I don’t have dvr and our tv is full of Umi Zoomi, Dora, and Little Einsteins!