Eyeworld

OPHTHALMOLOGY BUSINESS 114 October 2015 "A sense of uncertainty about the future generates a strong threat or alert response in your limbic sys- tem. Your brain detects something is wrong, and your ability to focus on other issues diminishes. Your brain doesn't like uncertainty—it's like a type of pain, something to be avoid- ed. Certainty on the other hand feels rewarding, and we tend to steer toward it, even when it might be better for us to remain uncertain." Your brain constantly tells you to avoid uncertainty at all costs, which results in us constantly seek- ing answers to a 10-years-down-the- road retirement question. Believe me, if I could predict your future, I'd be more than happy to do it. I'd also love to know if I'll ever see the Cleveland Indians win the World Series or the Browns make it to a post season. But I'm not going to let that uncertainty keep me up at night. Not only do I not have any control over it, but it's also un- healthy. I get it that people want to know what the future holds. The unpredictability of retirement is scary. But paying a huge fee to a financial planner or using a free online calculator to predict your retirement isn't the best use of your time and resources. The answers you get are going to be guesses at best and potentially dangerous assump- tions at worst. It's better to focus on what you can control, and that's the amount you put away for retirement now, while owning the strongest funds possible in your retirement portfo- lio. EW by Roger Balser The second major issue has to do with a little thing called life. As the commercial says, life comes at you fast. If you're attempting to project a retirement that is 10, 15, or 20 years away, you have to remem- ber that so many factors can affect your eventual retirement in that span of time. For example, you could become disabled, lose your job, experience a burst in an industry investment bub- ble, be impacted by any number of crises (like 9/11, the 2008 financial crisis, the housing bubble, Asian flu, Eurozone crisis, etc.) or even experi- ence the rare economic upturn. Let's be really optimistic and say that you could even win the lottery. The real question you should be asking yourself has to do with what's driving all this worry about retire- ment and the amount of money you'll need to live comfortably. In Psychology Today, David Rock wrote: The second approach people take to answer these questions is through the use of well-promoted online retirement calculators. These prognosticators of performance are all over the web (just Google "retirement calculator" and count the results), and can also be found on your 401(k) plan's homepage. You answer a brief questionnaire by providing your age, estimated retire- ment age, current income, savings rate, and the income you desire for retirement. Just hit "Submit" and the program instantly kicks out a number that could potentially rede- fine your future. There are a couple of major issues I see with these 2 solutions. The first major issue is that these solutions utilize such data as average market returns and the average rate of inflation to project your current financial reality into the future. But the truth is that the market doesn't move in an "average" straight line. It fluctuates. I f you're more than 50 years old and reading this article, I'm pretty sure that these 2 ques- tions have entered your mind lately: "When can I retire?" and "How much money will I need to live a comfortable life in retire- ment?" To be honest, they're reasonable questions to ask yourself. And based on my experience in the wealth planning world, most individuals answer these questions in 1 of 2 ways. The first answer (and probably the most costly) is found by hir- ing a financial planner. That's the well-dressed guy who meets with you and your spouse and reviews all aspects of your financial scenario and in the end presents you with an impressive-looking, leather-bound financial plan that is based upon a prediction of how the markets (and your money) will possibly perform in the future. The dangers of predicting your retirement Mr. Balser is the managing partner and chief investment officer of Balser Wealth Management in Avon, Ohio. He works one-on-one with individuals to reduce risk in their investment and retirement portfolios to ensure they will not run out of income in retirement. He can be contacted at roger@ balserwealth.com. About the author

• Cover