Courage—And 3 Other Qualities That Can Help You Better Plan For Retirement


By Walter Updegrave, RealDealRetirement @RealDealRetire

Smart financial decisions are a crucial part of retirement planning. But nonfinancial qualities are important too, as they can influence your judgment and the decisions you make, especially in today’s fast-moving, stressful markets.

Below are four key nonfinancial qualities directly related to financial success. Cultivate them so that they become an integral part of your planning, and I think you’ll find that they can help you significantly improve your odds of achieving a secure retirement.

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1. Courage: I’m not referring to the courage that soldiers display in time of war or the bravery firemen and policemen exhibit on a regular basis. I’m talking about the courage to make a commitment to your future.

And that does require a certain type of courage, or optimism, if you prefer. After all, saving for retirement requires you to give up something definite today for an uncertain payoff in the future. In the case of a retiree, it means being prudent about drawing down your nest egg so you’ll have money left should you live into your 90s or beyond. So, fundamentally, retirement planning requires a leap of faith, the confidence that saving or carefully managing withdrawals will benefit you in the future. Taking that leap of faith always requires courage, but even more so  when the outlook for the markets and the economy can  shift so suddenly.

2. Perseverance: Retirement planning is a long road with many detours and obstacles—job layoffs, unanticipated expenses, market meltdowns—that can undermine your initial commitment and derail your plans. So even after you’ve made a decision to prepare for retirement, the vicissitudes of life can test your courage to keep that plan on track.

That’s where perseverance, or “stick-to-itiveness” comes in. When you’re looking for any excuse to reduce or eliminate your 401(k) contribution so you can buy a flashier car or when you’re thinking of following that cable TV pundit’s recommendation to go all-in in the stock market instead of sticking to a mix of stocks and bonds, you need to find the resolve to stay the course and resist the temptation to abandon your well-thought-out plan.

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3. Resourcefulness: Sometimes sticking to a plan isn’t enough. You’ve got to find creative ways to improve it.

So, for example, if despite your efforts your nest egg isn’t growing at an acceptable pace, you can consider ways to boost your savings such as signing up for an auto-increase option that automatically boosts the percentage of pay that goes into your 401(k) plan each year. If your employer’s plan doesn’t have that feature, you can open an automatic investment plan with a mutual fund firm and have, say, $100 or $200 a month automatically transferred from your checking account to your fund.

If you’re already retired and feeling a budget pinch, you can explore options like trading down, relocating to a lower-cost area or tapping your home equity through a reverse mortgage. And, retired or not, you may be able to squeeze some more return from your retirement savings by investing in low-cost index funds. The point is that if you’re willing to be imaginative and resourceful, there’s almost always some way to fine-tune your plan and improve it. Several tools in Real Deal Retirement’s Retirement Toolbox can help you with such strategies.

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4. Humility: In these days of swaggering CEOs and master-of-the universe hedge fund managers, acting in a humble way may seem like little more an invitation to be taken advantage of. But I’m not talking about becoming a wallflower. I’m talking about humility in the sense of knowing your limitations when creating a retirement plan and affording proper respect for the things you don’t control.

One example is investing for retirement. When the stock market is doing well—as it has over the past five years with annualized gains of nearly 18%—people tend to attribute the lofty returns to their own investing skill. In reality, they’ve just been riding a rising market.

And when the market’s been faring poorly, many people react by moving a big chunk of their assets into cash, as if they know that the bad times will continue, which, of course, they don’t.

So whether it’s investing or any other aspect of retirement planning, don’t fall into the trap of thinking you know more than you do. Even the most assiduous savers and savvy investors are subject to forces beyond their control. Having the humility to recognize that fact—and then build some leeway into your planning so you can bounce back if things don’t go as expected—will increase your chances of having a secure and comfortable retirement.  (7/29/14)

Walter Updegrave is the editor of RealDealRetirement.comIf you have a question on retirement or investing that you would like Walter to answer online, send it to him at

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