| In the NFL, the term "Red Zone" has come to mean | | | | abound if you just look for them. |
| that portion of the field between the 20 yard line and | | | | Your Goal Line |
| the goal line. Offenses and defenses are routinely | | | | When you finally get to your actual retirement date, |
| measured by their effectiveness in this area. | | | | 'pull the plug' and venture off into retirement, this can |
| When applied to the retirement conundrum, the term | | | | be an exciting time. The thrill of having the freedom |
| "Red Zone" has come to mean that part of your | | | | that you have looked forward to for so long is |
| investment life that begins 5 years prior to actual | | | | exhilarating, but the worry of your financial future |
| retirement and last until 5 years after your retirement | | | | can be bothersome. You have to change your |
| date. Your performance when you are in this Red | | | | thinking rather dramatically at this point. Preservation |
| Zone will largely dictate the ability of your investment | | | | of your retirement nest egg is critical, so you must |
| resources to carry you through your retirement in | | | | be careful to not jump into big purchases just |
| the lifestyle that you desire. | | | | because you can. |
| Approaching the Zone | | | | The final 5 years in the Zone |
| Before you get to the Red Zone, your investments | | | | It is during the last 5 years of the Red Zone that |
| can be somewhat riskier and more highly leveraged | | | | having a 'side project' source of extra income can be |
| because you still have time on your side. If the | | | | particularly great. First of all (and most important to |
| market slumps or you make an investment miscue, | | | | many), is the feeling of self worth that you get from |
| there remains adequate time to recover for the | | | | having something to work on. After the excitement |
| problem in time to be ready for entering the Red | | | | phase wears off, many just-retired folks get |
| Zone! Typically, most of a person's investment 'nest | | | | depressed and feel empty as they mourn the loss of |
| egg' is invested in higher performing stocks and | | | | the career to which they have been so devoted. |
| mutual funds during this time. | | | | Having a source of supplemental retirement income |
| Entering the Zone | | | | can fill that void, give you something to look forward |
| As you enter the Red Zone, the whole paradigm | | | | to and, at the same time, produce some extra cash |
| shifts, all at once. You no longer have time on your | | | | flow. |
| side and must be much more conservative in your | | | | Unless you are particularly adventuresome, you likely |
| thinking and in your investing. Mistakes made and | | | | will not be looking to make a million dollars or 'Get |
| market slumps from this point forward cannot easily | | | | Rich Quick'. No, just something that produces a |
| be recovered from and may, in fact, delay the date | | | | thousand or two dollars per month and still permits |
| of your safe retirement. At this point the shift to | | | | you're the retirement freedom that you want - will |
| more debt vehicles (bonds & bond mutual funds) | | | | be a good fit. There are many, many such sources |
| should be occurring so that your risks are minimized. | | | | of supplemental retirement income available, |
| During this time, you are hopefully fully employed and | | | | particularly on the Internet. If you can build a revenue |
| generating a healthy income while you look forward | | | | stream around the knowledge of and passion for |
| to your wonderful day of retirement. Many planners | | | | something that you have learned in your life, then it |
| recommend starting up some sort of supplemental | | | | will be even easier and more fun! |
| income stream during this time to ease your | | | | Think about it. How can you leverage your |
| transition into retirement. It can be as simple as | | | | knowledge in a certain closely defined niche for your |
| writing articles or a book on your hobby or craft or | | | | retirement income and satisfaction? You will be glad |
| perhaps buying & selling on eBay. Opportunities | | | | you did! |