Flight Planning Your Retirement (Pre-Flight)

Flight planning and retirement planning are very similar in what it takes to achieve success.  Flying requires excellent planning, modifications to the plan enroute, a proper vehicle, and constant monitoring to ensure we reach our destination.  Retirement planning, will also require proper planning, proper vehicles, modifications to the plan along the way, and regular monitoring to ensure you reach your destination.  In fact, the only real differences are the time it takes and the fact one destination is a location and the other is a financial goal.

There is an old saying about the 3 most useless things in flying, which are:  runway behind you, altitude above you, and fuel left in the truck except when you are on fire.  While those rank high on the list, failure to plan is another, and proper planning will ensure the other 3 don't matter.  The same will hold true in your retirement planning.

Before a pilot even gets out to the airplane, he is already preparing his plan.  Keeping with the airline style flying, we will plan along with several other "team" members.  Our team includes dispatchers, load planners, air traffic controllers, and more.  Most of the time, our team members have the flight plan set up for us when we get to work and we likely agree with the plan to start with (we have a good team at American Airlines). 

When working your retirement plan, you will need a team also.  That team should include financial advisors, insurance agents, mortgage planners, tax advisors, and anyone else that can help you make your destination.  You will work together to develop your specific plan to get you started, ensuring everyone is working together to get you to your destination.

The next step for the pilot is to preflight the airplane and make sure it is ready for its flight.  "Walk-arounds" are down to make sure the vehicle doesn't have any exterior problems, while interior checks are performed as well.  If any issues are found, modifications to the plan are made to ensure safety, including switching aircraft if necessary. 

Your pre-flight retirement planning will cover types of investment vehicles that can help you attain your financial goals and which ones to use.  While flying requires only one vehicle, investments should be diversified for better chances of success.  This could include stocks, bonds, mutual funds, currency exchanges, options, real estate.  Then you can wrap those up into IRAs, 401(k)s, 1031 Exchanges, or other "vehicle" to get you there.  Choose your option wisely and minimize "overlap".

The remaining portion of a pilot's pre-flight is to ensure adequate fuel to get there, have an alternate (or two), and more to deal with problems that may arise enroute.  We also get a clearance for departing, get in position and go.  Thus, we have done the best we can to ensure a safe completion of that flight at our destination.

The final preparation of your retirement plan will be to bring it all together and implement it.  No investment ever pays off if you don't put any money into it, so get your plan together, make sure it looks good, and get it going.

Now, that we are on our way, the next part of the series will cover handling problems enroute and making adjustments along the way.