Strategic retirement lessons to learn from chess

Strategic retirement is like a game of chess. If you look out too far or not far enough, you'll probably suffer for it. Two senior pals playing chess and high-five each other isolated on white background

Great chess players know how to plan ahead to work the board. I’m not one of those people; I really suck at chess.

But when it comes to financial planning, it turns out that I strategize like a grandmaster.

I know this because back in June 2016, I invited Doug Goldstein on my podcast. He’s the co-author of “Rich as a King: How the Wisdom of Chess Can Make You a Grandmaster of Investing.”

He co-wrote his book with Susan Polgar, a grandmaster World Chess Champion who helped him apply the strategic thinking of chess to investing. I wanted to pull out for you several lessons I got from this conversation that apply to retirement.

Plan ahead, but don’t go crazy for strategic retirement

I spend a lot of time in spreadsheets. These spreadsheets sometimes—well—cover a big spread of people’s lives. When my clients plan for retirement, they’re staring down the end of their life and want to plan for it all.

Here’s the thing: You’re not Nostradamus. You can’t see the future. And you definitely don’t know how long your retirement will last, even if you know when it will start.

Doug told me that chess champions like Susan Polgar plan ahead, but the planning remains fluid beyond one or two moves ahead.

Strategic retirement should be similar. If you get too set with a plan you intend to carry you until the end of the game, your flexibility disappears. You’ll probably play right into your opponent’s hand as you fixate on that strategy and stop having the little conversations that draw out the best decisions.

Widows or widowers sometimes don’t get this. If the surviving spouse relied on the other to manage the assets it can be hard to take over. They figure the other knew what they were doing and hold on religiously to the stocks or other investments they inherited.

Meanwhile, the markets change and widows or widowers without flexibility in their planning can end up in a financial pinch. Not knowing who to turn to they just stick with what was.

Look at the whole board for strategic retirement

I’m sure you’ve played chess games you thought you were winning, only to find you’d missed your opponent’s strategy while fixating on your own.

Doug and Susan sometimes played chess when they’d meet to work on the book. And when he asked her to explain her strategies after she thumped him, she’d never point to one piece. She’d kind of wave her hand over an area of the board and say, “Didn’t you see how I developed an attack against your left side?”

Strategy fixation leads to a narrow point of view where you don’t allow yourself to step back and see the big picture all because you have one plan you want to carry out. If you’re not paying attention to the whole board, your opponent in chess can take advantage of that to perform an under-the-radar strategy that turns your check into their checkmate.

Like the widow with the stock picks, you need to step back and see the big picture. How does an investment fit with your retirement, IRA, 401(k), Social Security, and tolerance for risk? You need to be able to see it all for the best results.

This is why so many financial planners hammer on diversification. One strategy won’t win you every game.

Find patterns to win with strategic retirement

At the end of a chess game, a lot of situations require players to apply an exact process to win.

For instance, Doug told me if your opponent only has a king left and you have a rook and a king, one procedure will win the game for you every time—no stalemates.

And no, retirement isn’t the end of the game. It’s really the end of one chess game and the start of another.

Some people plan for retirement as if they’ll be gone in a year. That’s a terrible bet to make!

Like a grandmaster looking only a step or two ahead to constantly improve outcomes, you also need to do the same—until the pattern’s super obvious.

Then you can exploit the pattern for your retirement to live the best life possible, all the way to the end.

If you don’t know the right strategies or think it’s time to be the hero as the game is coming to a close, you can snatch stalemate from the jaws of checkmate.

Financial planners like me have a few tricks up our sleeves to help you plan it all out. My job is to see the patterns, view the whole board, and plan ahead to help you rock retirement!

I’m glad to help you with your strategy. You can beat retirement at its own game of chess with the right help and pattern recognition. It’s my life goal to improve the lives of retirees.

Even if I do stink at chess.

Question of the week:

Have you ever been so fixated on one investment strategy that you missed something that should have been obvious? How did this affect you?