Use Football-Style Retirement Planning

What the gridiron can teach you about investing.

Scott Holsopple

As I was watching my favorite team play last week, which didn’t involve much actual playing on their part, I kept seeing football-meets-retirement-planning analogies everywhere.

Pay attention to your o-line. Protecting the quarterback with a strong offensive line will repay you with superior returns. A quarterback with his head on straight can concentrate on making good passes rather than worrying about some crazy linebacker breaking through for a sack.

If you’re quarterbacking your own retirement savings, your retirement strategy is your offensive line. Sure, your line will periodically fail and let someone through. (And you will occasionally drop the ball or make a bad pass.) But your retirement strategy, like a good offensive line, will allow you to keep your head in the game and feel confident in the next down. It will keep you from looking over your shoulder every time the market shows a little volatility.

Baltimore Ravens cornerback Cary Williams celebrates his interception and touchdown during the second half of an NFL football game against the Cleveland Browns in Baltimore, Thursday, Sept. 27, 2012.

Look at your quarterback rating. Like quarterbacks, good mutual fund managers should have a steady track record. Don’t choose a quarterback or fund manager who’s streaky—you know the guy with the great arm who turns into a head case when he faces a strong blitz. Good managers perform consistently and predictably year after year.

Play all four quarters, and don’t be afraid to run up the score. Unlike football, it’s good sportsmanship to run up the retirement savings score, so play your first string the whole game. In other words, keep your head in the game the whole time. Don’t become overly confident when you notice you’ve got a decent lead—or tidy sum in your nest egg. Keep pushing. Keep strategizing. Keep researching. Keep seeking advice and increasing your contributions. Keep playing defense. Keep looking for ways to earn more, spend less, save more, invest better and take less risk. Keep your head in the game for all 60 minutes.

Every team has a kicker, but some kickers add a lot more value. When two well-matched teams meet, a good kicker can make all the difference. In retirement planning, the highest-risk asset class in your allocation is akin to a kicker. It’s not taking up a huge percentage of playing time (or your allocation), but a high-quality investment from the aggressive end of the asset class spectrum could put the ball through the goal posts when poorer-quality funds from that asset class are choking.

Run the ball a lot. It’s not fancy, but it’s reliable. Trick plays and big passes won’t serve you well in retirement planning. Pound forward with consistency. Sure, you’ll throw too. Sometimes you’ll notice changing market conditions, and you’ll run the option, reallocating to take advantage of whatever the economy (or the defense) is throwing your way. But, even when you call an audible, play with the same overarching strategy that focuses on consistent, long-term results. Remember that your choices during the first three downs of a series will determine where you are for the fourth. Make good, consistent choices for three downs so that you’re left with several good choices on fourth down.

Don’t go for the Hail Mary if you’re nearing retirement and the score isn’t where you’d hoped. Unlike football, where points cannot be lost, aggressive and foolish retirement plays could set you back years. It’s fun to think about retirement planning in terms of football, but your retirement strategy is serious business. Football is a game. A poor season or a big loss will hurt when your favorite team is on the losing end, but it’s still just a game. Retirement planning is your life, and you only get one lifetime to save and invest for retirement, so make it count.

And remember this: even when you face setbacks, the game isn’t lost. Lucky for you, you can influence the retirement strategy game because you can control the length of time you play, the quality of the players, the number of players, the amount of money you spend on them, and so much more. My favorite football coach wishes he could do that—especially last week.

Scott Holsopple is the president and CEO of Smart401k, offering easy-to-use, cost-effective 401(k) advice and solutions for the everyday investor. His advice has been featured on various news outlets, including FOX Business, USA Today and The Wall Street Journal.