I remember December 1999 vividly. That year, everybody was talking about the Y2K bug—the fear that everything electronic would shut down when the clock struck January 1, 2000. At the time, computer programs stored years using only two digits, so the year 1980 was stored as 80. Some programs couldn’t tell the difference between the year 2000 and 1900, which was supposed to cause massive digital chaos on January 1, 2000.
News stories talked about the possibility of banks closing, cash registers freezing up, cars malfunctioning, subways colliding and other crazy events related to computers crashing. People began to worry, fueled partly by the media frenzy. Millions of people prepared for a possible doomsday, my wife and I included. We bought supplies like we weren’t leaving the house for months. We bought bulk-sized Ramen noodles, Beanie Weenies, candles, and cases and cases of bottled water. We even went to the bank and took out extra money. We were ready!
On New Year’s Eve, my wife and I were glued to the TV to watch the different time zones count down to the next millennium. We stayed up to see if other areas of the country reported computer shut-downs. We watched and waited. Nothing happened. The clock struck midnight in our time zone, and still nothing happened. Everything was moving right along. We woke up the next morning, and the world and its machines were running like clockwork.
So what does this have to do with your retirement?
I want you to prepare for your retirement years with the same kind of effort I put in to preparing for Y2K. Why? Because unlike the Y2K crisis that wasn’t, your retirement will happen someday. I want you to be ready. Here are a few easy ways to get started:
1. Max out your retirement investments. If your company offers matching for your 401(k), invest up to the match. Then invest in a Roth IRA, all the way up to 15% of your income. If you still have some cash available, invest in a mutual fund with help from an investment advisor.
2. Live on less than you make. Stop trying to keep up with the Joneses. Buy used cars. Eat at home more instead of going out. Take advantage of coupons. Buy generic. Spend time with the kids instead of spending money on them. Self-discipline now will pay off big in retirement.
3. Meet regularly with your investment professional. Don’t put your entire retirement fund in the hands of another person then walk away. You wouldn’t do that with your checkbook, and, essentially, your retirement fund is your future checkbook. Keep up with how your investments are doing. Ask questions. Get advice. Allow the pros to help you build your wealth.
When you hit your financial number—that amount of money you need to live your retirement dream—I want you to celebrate with more excitement, anticipation and enthusiasm than any New Year’s Eve party. You worked so hard and saved so much. You stayed focused on meeting needs and not giving in to every want. You will have earned the right to enjoy that time in your life!