March 2021

The Flaw in Our Retirement Mentality

Most people have a flaw in their retirement mentality. This flaw is like a bug in a computer that can mess up the operating software or keep it from running. If you don’t correct the flaw, you could be in for trouble in your retirement. 

The way we think about retirement is flawed. How? 

When you start saving for your retirement (hopefully in your teenage years or 20s — if you haven’t started yet, start now!), it can feel like standing at the base of Mount Everest. It feels like an impossible climb. You know you’ve got to get to the top, but from the bottom it just feels like it could never happen or at least that it will take forever. 

That’s one reason many Americans put off saving for retirement. The money they could put into savings could easily go toward more immediate things, like cars, or a mortgage, taxes, food, childcare, diapers — you name it! 

“Besides,” you might ask yourself, “how much is this $100 a month really going to make a difference once I hit retirement?” 

There’s the flaw. 

The flaw is we can’t see the value in actually putting money into our retirement accounts now.  

Stats tell us about half of Americans put money into their retirement accounts. The median average in those accounts is only about $60,000. That’s a drop in the bucket for what most people need in retirement. But people can’t see why they should save for retirement when they have so many other things to pay for. 

But if we could see the future, we would be able to see what would happen once that invested money starts compounding over a long period of time. That would be like realizing there’s an air lift that will take you up a good portion of the climb up Mount Everest (if only!). If we realized that, we would be more motivated. We would realize there’s a “shortcut” to saving everything we need for retirement.  

Compound interest is one of the most powerful investments, and you can take hold of it by simply putting more money into your account. But the flaw of our retirement mindset is on the front end. It’s hard to envision that compounded money now, isn’t it? If you’re looking at $60,000 in your account, you might be thinking you could take that money out and use it now for something you really need. You just can’t see what’s going to happen to your 401(k) or IRA over a long period of time. 

Because of that, the government passed a law on December 20, 2019. It’s called the SECURE Act, and it’s trying to help employers and employees contribute money to their accounts. They’re hoping that in the long run, the mentality will be change from spend, spend, spend to contribute, contribute, contribute. That way, those accounts will be able to grow into large nest eggs, and when you get to retirement, you’ll have the money necessary to do what you want to do. 

Investment advisory services offered through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. Hoffman Financial Group and RWA are not affiliated. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

This information is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or promote, market, or recommend any tax plan or arrangement. Please note that Hoffman Financial Group and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.

Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any references to protection benefits or lifetime income generally refer to fixed insurance products. They do not refer in any way to securities or investment advisory products or services. Fixed insurance and annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors, Inc.

The Better Business Bureau (BBB) is a membership organization governed by The Council of BBBs, Inc. Businesses in the U.S. and Canada may apply for accreditation with their local BBB and are evaluated on eight BBB Standards of Trust, which are defined as a comprehensive set of best practices for how businesses should treat the public in a fair and honest manner. Businesses must pay a fee for accreditation review and monitoring for continued compliance to BBB standards when applying for accreditation. BBB assigns ratings to accredited businesses, which range from A+ (highest) to F (lowest) and are based on a defined set of rating elements. BBB logos and/or trademarks are property of their respective owners, and no endorsement of Chris Hoffman or Hoffman Financial Group is stated or implied. BBB and Retirement Wealth Advisors, Inc. (RWA) are not affiliated.

For the detailed requirements of the Better Business Bureau, please visit: https://www.bbb.org/

Logos and trademarks used are the property of their respective owners and no endorsement by the owners of the producer is stated or implied.

Thank you for visiting Hoffman Financial Group, Inc. social media pages. We are part of a highly regulated industry and therefore have some strict rules on replying to comments. If you do not hear from us, or we remove posts because they do not fall within specific guidelines, please do not take it personally. Hoffman Financial Group, Inc. reserves the right to remove any comments on the page that are exaggerated, misleading, or fraudulent.

No Testimonials – Industry regulations prevent us from posting comments about how well or how poorly anyone feels about working with Hoffman Financial Group, Inc.

Hoffman Financial Group, Inc. use of the "like" button is not an endorsement of the organization or individual who posted the content. All content, "likes", and followers of this page should not be considered as testimonials or advertisements.

Thank you for visiting Hoffman Financial Group, Inc. social media pages. We are part of a highly regulated industry and therefore have some strict rules on replying to comments. If you do not hear from us, or we remove posts because they do not fall within specific guidelines, please do not take it personally. Hoffman Financial Group, Inc. reserves the right to remove any comments on the page that are exaggerated, misleading, or fraudulent.

No Testimonials – Industry regulations prevent us from posting comments about how well or how poorly anyone feels about working with Hoffman Financial Group, Inc.

Hoffman Financial Group, Inc. use of the "like" button is not an endorsement of the organization or individual who posted the content. All content, "likes", and followers of this page should not be considered as testimonials or advertisements.