Planning frees you from worry, what-ifs

This was originally published on Monday, April 22, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

Suze Orman once said “a big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” That is undoubtedly the mindset you want when it comes to planning for your retirement. Unfortunately for many people, retirement planning causes anxiety, especially when faced with numerous financial uncertainties.

Whether retirement is just around the corner or thirty years away, there are several steps to planning for a successful retirement.

Have a goal — I discussed this a few weeks ago. But I feel it is worth repeating. It is essential to know how much you need to live comfortably during your golden years. Having a set goal will ultimately line up how much you need to put away yearly till that day of retirement. It is uncertain how long you will live after you retire but consider having enough put away for twenty to twenty-five years after retirement.

The sooner, the better — Start a plan as soon as you can. It is never too late. Even if you have ten years or less till retirement, you can start saving. You may have to work a little harder to catch up, but having something put aside is better than not having anything at all.

Keep track of your progress — Once you have your target goal and your money is working for you, watch your progress. Review your investment portfolio yearly. If your investments perform better than expected, you may want to consider a less aggressive strategy and lower the risk level needed to make your goal. And vice versa, if your investments are not performing to meet your goals, you may need to invest in a higher level of risk. As time goes along and your lifestyle changes (marriage, family, homeownership, etc.), you may need to readjust your goals or contributions.

Stay invested — Many retirement plans are based on the stock market. It is very difficult to watch the market rise and fall. Don’t give into the temptation of moving your investments around. Ride it out for a while. Stocks generally are considered a long-term investment. The ups and downs usually average out and provide a steady return on investment when you invest long term.

Work with a professional — Planning for the future is very important and can be quite confusing. You may want to hire someone who can help you grow your nest egg. Look for someone who has your best interest in mind. They should have access to a wide variety of investment options from different companies. They should not represent any specific investment company. Their fee should be based on how your portfolio performs. If they ask for their fee up front, there is no incentive to make your money grow.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and with financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at and read past columns at the Money Matters blog at