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Retirement Planning – The End Justify The Means

When did you start thinking about retirement? If you said jokingly "the day I started working" you may have unknowingly set yourself up for a shot at the good life. The big question is: "did you listen to yourself?"

This is the story about two atypical, wonderfully forward thinking (about 40 years forward) folks named Bertram and Kayla Piedmont. (OK, you got me- it's not their real names) Both Bertram and Kayla (ya' gotta love these names!) were dedicated teachers educating our youth of today and yesteryear. In their early 20's, they faced the challenges we all faced: getting married, starting life together, finding a job, setting up house and starting a family. Just like most of us, starting a career along with planning and starting a family seemed as daunting as anything yet encountered in their relatively short lives. The major difference between them and many others in the same boat? They had the foresight to think, plan and project into the future. How many twenty-somethings do you know that take retirement and a life 40 years into the future seriously, or even give any thought at all?

They both landed teaching jobs in the public sector that, given time and tenure, afforded them a pension payable for life. Note the comment- time and tenure. If you want to earn long term benefits, you have to do the time. Moving from job to job during your lifetime may preclude you from this benefit. Dedication to your occupation, employer and field of expertise has its monetary benefits, not to mention the rewards you reap from the satisfaction of, in their case, molding the minds and futures of literally thousands of future great Americans. Very few of you reading this very column (as well as me) would not be the persons you are without dedicated educators like Bertram and Kayla - but I digress.

Bertram and Kayla had vision. In and amongst the pressures and demands of setting up a new life together, they had the vision and prudence to look not only at the present - they saw the future, for whatever it may have been, and consciously decided to be a part of it. They sacrificed a little of the present to plan and set their path for the future as well. The result? Two retired people still in love (they really are cute together after all these years!) who are living life to the fullest doing what they want, when they want, where ever they want. Golf, travel, grandkids, fun and financial security - how's that for a recipe for success? It may be true that money can't buy happiness, but here's a couple that sure makes it look good!

Let's break it down. First, there's their pension. This was set in place the day they started working on their job and their future. Time is something that takes, well, time. You have to earn your tenure to earn your pension. While moving from job to job or some occupations may allow you to transfer your time served as credits to your next job, most will not. Therefore, changing jobs and occupations may hurt you in your later years. Now let's be clear - its most important to do what you love. Find your passion and put 110% into waking up in the morning with a smile on your face and the drive to make our world a better place. Nobody should have to spend their days doing something they dislike: that means all of us. But once again I digress.

From the beginning of their career they made voluntary contributions to their retirement fund. The advantage to this strategy? Besides the obvious of working decades in advance to set up their future lifestyle, their current tax deductible retirement plan contributions reduced their annual taxes due to the tax deduction. By diligently and consciously reducing their annual income they both reduced their current annual taxation and put themselves a step closer to retirement. In addition, they carefully budgeted and saved monthly to build a nest egg to sustain themselves through good times and not such good times. The end result? Income from two pensions, two Social Security checks, and two Tax Sheltered Annuity plans- add 'em up, and the sum total could be a secure retirement nest egg for this happy couple. In the immortal words of The Rolling Stones: Time is on my side, yes it is…Time is on my side, yes it is…Now you were saying that you want to be free…Go ahead- sing it with me!

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