Insider Jeff Fleming

Masterminding Your Retirement

If you start down the road to retirement without a map, you're bound to get lost on the way, says our new Money Insider, Jeff Fleming.

Dear Jeff:
Is a financial plan really necessary? I have an IRA and an additional portfolio of stocks that I buy and hold--what else do I need to think about?

Jeff Says:
You also have to think about where you're going with your investments. Let's consider this by way of analogy. Imagine driving from Pennsylvania to California without first looking at a map to find the way. All you know is that you want to go west. Will you arrive in California? Maybe, but did you take the shortest route? What traffic jams, roadblocks, or construction delays could you have avoided? Would your long drive have been more pleasant if you had taken a scenic route or visited landmarks along the way? How much anxiety did you suffer?

A written financial plan is your atlas to financial peace of mind. It will help you hurdle or avoid the roadblocks that could challenge you along your financial highway, including inflation, taxes, risks, and bad investments. Your plan will serve as a way for you to think about your real goals and as a means to monitor your progress.

You may arrive in California by traveling west--and you may reach financial success by simply saving money. But here's another way of looking at this: There is a town near the western border of Pennsylvania named "California"--by California-bound settlers who could make it no farther.

Employer-sponsored retirement plans