Reflection and Choice vs. Accident and Force: Alexander Hamilton’s Wisdom and Your Retirement

On the 4^th of July, in between the hot dogs and fireworks, there may be a few history buffs out there who pull out their copy of The Federalist Papers and read a letter or two from them. If you’re not familiar, The Federalist Papers are a collection of essays published in New York City newspapers in 1787 defending the Constitution.

Alexander Hamilton, along with James Madison, and John Jay authored individual essays, but they published each one under the pseudonym Publius. All eighty-five essays were later combined and published as The Federalist.

Before we get started, I am a flat fee advisor who helps people retire in Alabama and across the country. Check out my blog for more financial advice for Alabama retirees.

And now, onto the blog!

The first essay, Federalist No. 1, was written by Hamilton and it’s a practical introduction stating the arguments for the Union, the insufficiency of the present Articles of Confederation to preserve the Union, and how adopting the new Constitution will not only aid in preserving the Union but will add security to preserve the benefits of liberty and property set out in the Constitution.

One of the more important and famous points from this introduction is where the author emphasizes the point that a republican form of government (one that is representative and derives its power from the people) depends on “societies of men” to establish “good government from reflection and choice.” Otherwise, the cause of people would collapse, and they would be “forever destined to depend for their political constitutions on accident and force.”

The same options present themselves when approaching retirement. Hamilton was making the point that the ability of people to govern themselves depends on their willingness to allow “reflection” to guide their “choice”. And so, it is with retirement planning. Considering what’s important to you. Exploring what an ideal retirement would be like. Imagining what you’d want to experience in life if money weren’t a concern and what it would really mean to feel financially secure. Having done this, now choices begin to appear, and you work to prioritize those choices given your values and circumstances. Thanks to your concerted reflection, secure choices propel you forward.

When done well, preparing for retirement should start with reflection, you make choices, then you adjust, reflect some more, make new or better choices, and the cycle repeats.

But, as Hamilton points out, if we’re not careful, the opportunity to impact on our future, preserve our independence, and protect all that we hold dear will be lost and we’ll be left with depending on accident and force to decide our fate.

Maybe it will all work out the way you want in retirement. Maybe you’ll never run out of money, maybe you’ll be able to avoid every financial mishap, and maybe your dignity and independence are never infringed upon. That’s a lot of “maybes”.  Failure to plan well leads to accidents that limit your options, force your decisions, and, ultimately, limit your freedom in retirement.

Hamilton’s words are both a hopeful declaration and a challenge. One of the strategic decisions when publishing The Federalist Papers was in deciding to publish them, not in the names of the individuals who wrote them, but as Publius, to symbolize unity and a common voice.

The same effect occurs when you (and a spouse if you’re married), along with a seasoned financial planner, work through a process of reflection to create a solid retirement plan. Now, with every part of your financial life working toward the same goals and objectives, with both spouses on the same page, and the financial planner providing leadership and accountability to keep the plan on track, the plan takes on this purposeful, unified voice.

This Independence Day, I encourage you to take a moment to consider your own financial independence. Recognize that my advisory role is oriented toward a Hamilton approach – informed by reflection and choice to avoid accident and force.

Happy Fourth of July!

Certified Financial Publius