Ep 2: The Importance of the Financial Danger Zone

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As you move into that final decade before retirement, planning becomes crucial for long-term success. We call this the Financial Danger Zone. Today we’ll identify the changes that need to happen as you approach retirement and what areas require the most attention as you transition into the next chapter of life.

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Show Notes

Financial planning is critical for everyone to achieve the retirement they envision, but that process really ramps up over the final ten working years.

We refer to this time as the Financial Danger Zone. Not only does it include that last decade before retirement, but it also covers the first 5-10 years of that transition. The reason it’s classified as a danger zone is because proper planning is imperative and any mistakes you make get more difficult to overcome.

On this episode of Your Life, Your Money, we’ll take you through this critical planning stage and explain how your approach should change. Then we’ll make sure you are aware of the most common mistakes that get made during this time to help you avoid doing the same thing.

The simplest way to look at this danger zone is to think about it as driving into a construction zone. What does that mean? Well, these three adjustments need to be made when you approach an area where work is being done:

  1. Thinking differently
  2. Slow down
  3. Be Prepared for the Unexpected

First, your mindset has to change in the Financial Danger Zone because the goals are shifting. Priorities need to focus more on protecting your assets so you can enjoy a long retirement. Second, slowing down means reducing risk on the road, and that’s the same thing in planning. This is the time you should be evaluating your investment and ensuring you aren’t taking on more risk than necessary. And finally, you have to be prepared for the unexpected. Is your plan prepared for major life events or unexpected expenses?

We’ll get into much more detail on the show, but identifying these three key changes will give you an idea of where to start in this danger zone. As always, the earlier you start planning, the easier it will be during this final decade of working. If you haven’t started that process, now is the time.

Listen to the entire episode or click on the timestamps below to skip ahead to a particular question.

[1:40]What are the long-term effects of the third stimulus package?

[5:18] What is the retirement danger zone?

[6:23] Like a construction zone – start with thinking differently

[10:19] Slow down and be prepared for the unexpected

[14:14] Common mistakes people make in the danger zone

[16:21] Why planning makes the danger zone easier

Thanks for checking out this episode. We’ll talk to you again soon.

 

“There are three things that we need to do. We’ve got to think differently. We’ve got to slow down. And we’ve got to be prepared for the unexpected….When you start to get to that 10 years away from your potential retirement date, all those three things hold true.”

-Scott Sierens

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