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Fine-tuning your retirement goals
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Controlling cash flow
Sometimes with so much emphasis placed on savings and investments, IRAs, mutual funds and pension plans, it's easy to forget that there is a flip side to this particular coin: expenses. You can control them. So maybe that beach house in Maui needs to be a beach shack ... or a condo up the road ... or a week once a year in a hotel. If you pay off your mortgage early, you'll have more options. You can live mortgage-free or perhaps sell your home, downsize and put the equity into an annuity that pays an income stream for life.

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"The traditional mainstream financial speech is, if you want to retire you have to save as much money as possible, so you add money into annuities or 401(k) plans to build up your assets," says Collins. "That's important, but just as important is being able to reduce the amount of expenses you're going to have in retirement. And that can mean paying off your debt in retirement. It means you're controlling any expenses that may come up during the year."

Two questions
How do you go about being realistic in fine-tuning your retirement goals?

Obviously, if you can't pay your bills now while living in a two-bedroom apartment in the suburbs, a Hawaiian beach house is a pipe dream. Again, perhaps it all has to do with setting priorities. How many people give much thought to what really matters to them?

Collins says that instead of asking a client such vague questions as, "How much money do you need in retirement?" he asks a series of provocative questions that force the client to think things through.

"Rather than trying to build your life around your money," Collins says, "let's try to build your money around your life. We ask a number of questions, but all around the premise of what's really important to you."

Question No. 1: If you went to the doctor and he told you that you had five years to live, what would you do in the next five years?

Question No. 2: If you went to the doctor tomorrow and she said you have one day to live, what are the things you'd regret not doing in your life?

Collins says, "We find that really helps spur the goal conversation, because what comes out are the things that are really important. It's a big step in the whole process of trying to develop these goals."

And once your real goals are on the table, you can back up and determine how much they will probably cost. Once that has been estimated, you can then create a plan to reach your financial -- and retirement -- goals.

It's also important to keep in mind that while a dearth of money could certainly make for an unhappy retirement, a beach house on Maui may not be a real source of happiness. Happiness might be good health, family, friends or activities that engage and entertain you.

"It's not always about money," says Randles. "Lots of times it isn't. It's your well-being."'s corrections policy -- Posted: Dec. 9, 2005
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