Tag Archives: Kentucky Derby

Betting, Hoping and Planning

by Neil Byrne, JD, LLM, CPA Stock Yards Bank Wealth Management & Trust


It is almost Derby time. So what better topic to discuss than betting?

According to the dictionary, a bet is defined as “an act of risking a sum of money on the outcome of a future event.” Hope is defined as “a feeling of expectation and desire for a certain thing to happen.” Finally, a plan is defined as “a detailed proposal for doing or achieving something.”

All of these concepts are wonderful in their own right, and can bring joy to individuals in the right context. It is fun to bet on the Derby, or to hope your tournament bracket wins your office pool. Unfortunately, too many people are unnecessarily making a bet on retirement security by simply hoping their savings, Social Security, and other resources will be enough.

Most people choose their career, their college major, and their home, not to mention their spouse, among various other important items in their life. What about retirement? How many people are hoping to be able to retire “one day” but haven’t put together a detailed plan for actually retiring? If you have not put together a plan, then you likely are not planning for retirement, but rather, are betting on retiring – one day.

Below are a couple of items to consider when putting together a retirement plan. While things like investment returns, basis, and tax rates are unquestionably important, for a moment, we suggest that you think “bigger picture,” and ponder how some more basic considerations can affect your successful retirement plan.

Your Needs and Wants
Even the age at which you retire is up for consideration. After all, setting a uniform retirement age is said to have been started in Germany by Chancellor Otto Von Bismarck, at least partially as a way for him to force troublesome government employees into retirement. Germany initially set it at 70, and then lowered it to 65*. Of course, whether that is true or not, neither Chancellor Von Bismarck, nor anyone else should really dictate when you retire. Naturally, taking retirement benefits that are only available at certain ages into account is an important part of the plan. But, with a little foresight, you can retire when it is appropriate for you.

After all, retirement is about you. To ensure that you are making the best decisions, you will want to have a good handle on your family dynamics, as well as your budget, assets, and liabilities. Do you have robust savings that can withstand unforeseen expenses? Have you considered what your wants and needs truly are? It may be appropriate to “bet” or “hope” for a dream item down the road, but we want you to plan for your true needs and wants in retirement.

Your Biases
Personal biases can have long-term consequences, and so, many people have a critical need for objective retirement advice. A 2008 book by Professor Dan Ariely, Predictably Irrational, explains many of our biases and how they affect several facets of modern life. Two sections of the book, however, are especially relevant here.

First, people like to procrastinate – big surprise. But, it is true, and it can harm your retirement readiness.

Second, people like to keep all their options open for as long as possible, even when inaction produces a negative outcome. Undoubtedly, financial planning can be complicated. Moreover, retirement planning forces you to make an avalanche of choices – when should I draw Social Security? When should I stop working? Is Long Term Care Insurance for me? And on and on . . .

These two biases can work together to turn a plan into a bet before you even realize it. Betting may be fun on the first Saturday in May, but leave the betting for the track, and the hoping for your tournament bracket. Let’s plan for your retirement.

*See: https://www.ssa.gov/history/age65.html AND http://mentalfloss.com/article/31014/why-retirement-age-65

Advertisements

Derby Week Safety Tips

We are officially in the midst of Derby week! With “the most exciting two minutes in sports” comes a week full of great events. As we quickly approach the first Saturday in May, Stock Yard’s Security Team wants to ensure everyone has an enjoyable time while providing some essential safety tips:

Plan your trips carefully. Think about where to park ahead of time, and consider walking a little further to and from the event. Depending on the event, street closures could send you on an unexpected detour, so make sure to plan an alternate route accordingly. Designate a driver who will be responsible for getting everyone to and from safely.

Never go alone. Especially if you are in an area you are not familiar with.

Always lock your car, and hide valuables pre-trip. Don’t leave any valuables in plain sight. Additionally, ensure that your home will be safe while you are away for an extended period of time. Let a trusted neighbor know where you will be, and have them keep an eye out for any suspicious activity.

Keep your cash, ID and your cell phone in a front pocket to prevent being pickpocketed. Be conscious of where you put your cash – particularly after placing a bet at the track. Make sure that your belongings are not in a place where thieves would be able to snatch.

Ladies – If you bring a bag to the races, make sure it is not oversized. The track has some specifications on what size bag to bring, and the larger the bag, the easier it is for thieves to sneak into your belongings. Be sure not to accidentally take any of the banned items as well.

Be on the lookout for counterfeit notes. Derby time is also a time for a significant rise in counterfeit notes entering the Louisville Metro area. Right now, the $20.00 note is the most counterfeited in America.

Be aware of your surroundings.  Situational awareness is key to staying safe in any environment.  If you need help call LMPD at 502-574-7111 and give them your location. If you find yourself in the middle of an emergency, call 911 immediately.

Be aware, be alert, be ready, and be safe. Best wishes for the winning Derby ticket and most of all have fun!