3 Simple Steps For A Successful Retirement

Have you ever read something then paused and said well that's stating the obvious? Then upon further reflection realize what is obvious to you may not be obvious to others. This happened to me as I was scanning some retirement headlines.

I came across an article titled "The Future of Social Security: Not Good". My first response was 'No duh!' After giving it more thought, I came to the conclusion that my reaction is probably in the minority.

I suspect most people believe that the U.S. government will not let Social Security fail. This is the same government that deemed certain large companies 'too big to fail' and dragged other unwilling participants into the fray. At the time, BB&T's Chairman and CEO, Kelly King was very outspoken on how the government has managed the TARP debacle. And then the  government is 'helped' the auto industry.

The U.S. government has become too big and too 'helpful' to the detriment of its citizens. The government should spend more time providing for the common defense and less time promoting the general Welfare (pun intended).

So, what are your retirement plans? Are you going to rely on the government to print your social security check and the money backing it up, or will you choose to take charge of your future and prepare for it? As it is with most things in life, those that prepare for retirement will find more success than those that don't. It is really not that hard when you start young. Here are three simple steps:

1. Live on less than you earn. (another 'No duh!' statement)
2. Invest the rest using a sound asset allocation model.
3. Pick solid, conservative, low-cost investments.

Number 3. on first blush may seem complicated, but it doesn't have to be. For those that don't want to make investing their hobby, they can focus on a few good funds like Vanguard's S&P Index Fund (VFINX) and Vanguard's Long-Term Bond ETF (BLV).

For those comfortable in selecting and holding individual stocks, there is nothing like Dividend Growth Stocks to provide a growing income into the future. Dividend stocks found in many dividend investors' portfolios include companies such as: McDonald's Corp. (MCD), Johnson & Johnson (JNJ) and The Coca-Cola Company (KO).

Finally, you can choose not to prepare. In June 2008, I wrote about a retirement-age couple that would never retire because they chose to live life on the edge and always spent a little more than they made. Over the years the noose continued to tighten on Bill and Jackie (not their real names). Bill has passed away and Jackie now relies on family to meet her basic needs. 

Life is a choice. You can choose how you live, but you cannot choose the consequences of how you live.

Full Disclosure: Long JNJ, KO, MCD. 

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