Retirement Guys: The big fumbleWritten by Nolan Baker Mark Clair | | firstname.lastname@example.org
Fumble! Whenever this cry is heard in a football game, there is a mad scramble for the ball. Players are diving to the ground and wrestling each other for the football. The fans hold their breath as they wait to see who emerges from the pile with the ball. While the referees pull players off the pile, both teams usually point in the direction that indicates their team has the ball. This is usually wishful thinking. The player that made the recovery typically jumps up and raises the ball triumphantly for all to see. He is fired up about what can be a game changing play.
What is especially heartbreaking, is if the fumble occurs just short of the goal line. It can be devastating to see the team you are rooting for about to score a touchdown, only to fumble the ball. Hopes for victory can be dashed. A famous (or infamous) occurrence like this (sorry to bring up bad memories, Cleveland Browns fans) was when Earnest Byner, as he was about to score a game-tying touchdown with 1:12 left in the game, fumbled on the 2-yard line in the AFC Championship Game in 1988. Unfortunately for Byner and the Browns, this play is remembered as “The Fumble.” The winner of the game would go on and play in the Super Bowl.
This was a crushing defeat for the players and the fans because the Browns have never appeared in a Super Bowl and had not won a championship since the days of the great Jim Brown in 1964, before the game was even referred to as the Super Bowl. To add insult to injury, the 1988 defeat was bitter considering the Browns had had a chance to go to the Super Bowl the year before but lost to the same Denver Bronco team in overtime. Some said later that the fumble could not have been helped. Byner did not see the defender coming and was hit so hard there was nothing he could have done. The problem was it was too late in the game to recover and overcome this disastrous play.
As we help our clients plan for retirement, Nolan and I (Mark) often refer to what we are trying to do in these same football terms. We want to keep you from fumbling in the red zone (from the 20-yard line to the goal line). When a team gets inside the red zone it is in a good position to score. If you are older than 50, you may be in the retirement red zone. Your “blind spot” may be exposed. You might be at a stage that is crucial in the game and a fumble at this point could be disastrous. Let us give you a few examples:
O Reaching retirement and entering the phase of having to take money out of retirement accounts and not knowing what the rules are. This could be an income tax time bomb disaster.
O Making “The Big Social Security Mistake.” This is what we call it when folks decide to start taking Social Security, but cost themselves thousands and tens of thousands of dollars by making the wrong decision. (A free Social Security calculator is available at www.retirementguysradio.com.)
O Taking income from stock market accounts in a declining market. This can rapidly accelerate losses and cause you to potentially run out of money sooner.
O Not having an exit strategy or “circuit breakers” on stock market accounts. Do you know when to get out? A down stock market could devastate your retirement plans.
O Not protecting your assets from a health care crisis. A long-term care spend-down could wipe out or severely damage your life savings. One of the biggest fears we see is running out of money.
O Not having your estate plan done. If you do not take steps now, your children could pay a dear price later.
O Not planning for how an unexpected death can cause loss of income. If you are making a high level of income, you are a moneymaking machine. What kind of shape will your spouse be in if the machine breaks?
There are more examples of how “the big fumble” could occur as you approach or begin retirement. It may be late in the game with only 1:12 left on the clock like it was for Earnest Byner and the Browns as they tried to get to the Super Bowl.
What to do?
1 + 1 = 2. Information + action = results. You know what to do. O
For more information about The Retirement Guys, tune in every Saturday at 1 p.m. on 1370 WSPD or visit www.retirementguysnetwork.com. Securities and Investment Advisory Services are offered through NEXT Financial Group Inc., Member FINRA / SIPC. NEXT Financial Group, Inc. does not provide tax or legal advice. The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537. (419) 842-0550.