December 10, 2018

Taking a Gap Year: Not Just For Young Adults Anymore

It is not unheard of for someone graduating from high school to want to take a year off before starting college. There is the need for a break from twelve years of school, or a feeling that an adventure or life-refreshing experience would be beneficial before tackling college or other advanced education. Sometimes, a college graduate will have the same "itch" to explore the world before settling down to becoming a full-fledged "adult."

A while ago the Wall Street Journal had an article  about Boomers taking a "gap year" during their working career. This is seen as the chance to "wipe the slate clean" by exploring different options for the next part of their life. 

Most of the people who do this return to the working world, albeit in a different way. And, there are some who come back in a radically different form.  It may be tackling a long delayed dream, or a mix of part time work with a newly found passion for expanded leisure. It can mean a different living environment or location.

One of the people interviewed for the article summarized the most important step anyone must take: "Don't be afraid. That's what stops most people my age from making changes. Not only do they fear the unknown, but they fear letting go of the habits, comforts, safety and routine of their lives."

That may be true but it is quite reasonable to worry about having to convince a present or future employee to take a chance on someone who decides to take a period of time off, especially past a certain age. Someone would have to arrange for a sabbatical, have a strong enough skill set that finding a new job would not be terribly difficult, or believe a career change is past due anyway.

While the thrust of that newspaper article was not directed toward a satisfying retirement, the mindset that allows for a Boomer relaunch is an interesting idea for someone who is fully retired at the moment. Taking time to strip away old habits or ways of living and then restarting the journey would work at any age.

If already retired, that drawback with taking a "gap year" is eliminated. Of course, there will be other upheavals, expenses, and maybe some strange looks from friends and family. But, worrying about employment isn't as high on the list. And, any future work may take on an entirely different form: starting one's own business, using skills in a different field, or consulting a former employer.

Our mini-gap machine
I did experiment with a mini "gap" concept and enjoyed it tremendously. After debating the pros and cons for at least a year, Betty and I finally bought an RV. After several short trips to figure out the basics of motorhome life, we took a few, two month-long trips to different parts of the country. They were refreshing, memory-filled breaks from our normal routine. Looking at the photos today brings a smile to my face.

Of course, they were not long enough to really feel as if we had stepped into an alternative lifestyle. For me, that would mean driving until I found a fascinating small town and stop for a month or so. I'd look for some one-time volunteer opportunities, eat at the cafes where the town gathers every morning, get to know the local characters, and adapt to the timing of that location's lifestyle.

Then, I'd pack up and drive down the road to a very different climate or part of the country and repeat the process. After several of these stops, I think I'd be ready to come back to my safe suburban base with new perspectives on my life and the journey I am on. I think I'd be a better, or at least more interesting, version of myself, with stories to tell and lifestyle examples to copy.

On our two month trips we made a classic mistake: trying to cover too many miles and see too many things in the time we had allotted. We were never in one place more than 4 days - certainly not long enough to be more than a casual visitor. Also, we felt that being away from family for 60 days was about our limit. So, the conclusion for us was a full-blown 'gap" experience was not really our style

A couple I admire are in the midst of a serious gap year experience. They sold most of their belongings, moved out of their rental home in Hawaii, and began a one-year trip around the world with nothing more than a few suitcases and backpacks to sustain them. When their journey is over they will decide where to live, what place to call home. 

Plenty of us are snowbirds, living for part of the year in a different climate. But, to me, that doesn't qualify as a real gap experience. Based on the WSJ article, there would have to be a real disconnect from an everyday routine and familiar surroundings to produce the desired effect. 

How about you? If you had the chance, what would you do with a "gap" period, to get a new perspective on life? Is the idea of a time away from the everyday intriguing? Or, are you a homebody who is perfectly content with short vacations and feels no need to hit the road or shake up what is a comfortable satisfying retirement?

Part of me wants a real break, a "gap" experience. The logical and realistic part of me tells me, "No."  I will be fascinated to read your comments. 

December 6, 2018

Does Retirement Make You Feel Guilty?

A reader wondered how much a part guilt plays in one's satisfying retirement. Frankly, I have never thought about it in those terms until he raised the issue.

Yes, the way our most disadvantaged citizens are treated bothers me tremendously. It is hard to fathom some of the dismissive talk I hear about folks who are homeless or forced to fight to survive on not enough food and minimal health care. 

The approach of some in government to make up the deficit by cutting the bare necessities even further for these people because they have no political "value" doesn't line up at all with my religious beliefs. When children are involved I feel ill.

But, as the reader noted, for most of us, that is not our situation. We have some type of roof over our heads, enough food and medical care to be as healthy as our bodies allow us. We have heat in the winter and cooling in the summer. There is likely at least one car in the garage unless we have chosen to do without.

When we compare our lifestyle with so many others we are blessed. Does that ever raise a feeling of guilt? In part, here are those comments:

"Feelings of guilt at being able to retire when so many others are likely to have no opportunity. We are able to retire due to thoughtful (or lucky?) strategies of investment and/or frugal lifestyle. Or due to the good fortune of being born into an advantaged/educated household. 

Still, when I see so many hardworking people - and there ARE many hardworking poor people - who have no real hopes of retiring, I have to accept that the world is indeed not fair. Still, it rankles me that working hard does not guarantee some kind of retirement opportunity.

When I was retiring from my teaching career, so many colleagues said that I certainly "deserved it." Some of being able to retire was due to hard work and strategic living, but much was also due to a small inheritance and the larger inheritance of good health and good education. There are lots of hardworking and less fortunate individuals who are also deserving.

Also feelings of Guilt from no longer being "productive" in the typical 9 to 5 style. Not necessarily new, I know, but many of us don't feel useful unless we are on that blasted "hamster wheel" of the work world.

All sorts of these feelings of guilt can be turned into appreciation for whatever gifts we have earned or been arbitrarily given, but for me, it has taken some time and processing."

This quote raises some very important points to think about. The common definition of guilt implies that something wrong has been done. It leaves one with a feeling of self-reproach for some ethical or legal failure. I'm pretty sure the reader isn't implying he "cheated" his way into retirement. 

This "guilt" is one of comparison: comparing his situation with other human beings who are in a much worse state through no fault of their own. In fact, he notes their situation may be in spite of doing things correctly. That prompts the question, "Why me? How can I live the way I live while others suffer without me feeling guilty?"

The feelings that were expressed are those of a person with a finely tuned sense of morality and fairness. What he sees is the condition of humanity: there are perceived "winners" and "losers " who may be in those categories through no action of their own. There will always be poor people and always be those who are well-off. But, what he is reacting to are those who have been "mis-categorized" and can do nothing about it.

Obviously, there are folks who ignore the basic rules of good financial stewardship. They spend too much, use credit poorly, and don't save. These are not the people the reader or this post are addressing. The "make your own bed" cliche is a better fit for them. Certainly we can have empathy for their situation, but a guilty feeling at our situation compared to their's wouldn't seem appropriate.

Before I get too heavy into philosophy and religion let me stop here and make one point: This comment has brought to light a very important issue - that of fairness in society and what our responsibility is to recognize and react to it.

I must admit I don't feel guilty in the traditional sense about being able to retire early and live decently. I also don't believe I did anything better or different than many of my peers who were still working and might continue to do so for years.

Yes, I worked hard, saved a lot and lived within or below my means. But, the talents and skills I was born with came from God. My educational and economic advantages came from parents. These factors were primarily responsible for who I became. 

I do feel guilty that there isn't more I can do to make things more fair. The best I can do is try to make the little parts of the world I touch a little less unhappy and depressing.

Has this post caused you to think about your retirement situation in comparison to others? Is feeling bad about what life has given you counter-productive? How do you react when others express jealousy over your situation? These questions can be important to our overall feeling of living a satisfying retirement. I'm interested in your contribution to this discussion.

This subject was the focus of a recent podcast in the Living a Satisfying Retirement Lifestyle series. It used an earlier version of this post from several years ago that prompted some excellent comments.

The topic is important enough that it is worth a rerun to allow more readers to weigh in on this subject.

December 3, 2018

Retirement and Financial Security: How Much is Enough?

The quick answer is, no one knows, including you.The amount you need to retire comfortably and live a satisfying retirement lifestyle is dependent on so many variable that a definitive answer is impossible. That doesn't stop all sorts of web sites, blog posts, financial advisors, and others from giving you their opinion. I caution you to use what you learn in this manner only as a piece of the total puzzle, not the ultimate solution.

It shouldn't be surprising that I am not going to give you a hard and fast number either. But, I am willing (or foolish enough) to take a look at some of the factors that will help you arrive at the "magic" number for you.

What is First?

The first step is to assess your expected income. While many of us lived our working lives spending more than we made, that was dangerous then, and fatal now. Once you retire, if you spend more than you have resources to support you could be in big trouble. Why? Simply because you cannot predict the future: what will happen to your income stream, your health, even how long you will live.

Retirement income comes from several sources. For most folks your pension, 401(k), IRA, annuities (a contract between an individual and an insurance company promising lifelong income in exchange for an upfront payment), and other investments will be an important source of financial support. Take the time to figure out exactly what you have and what they are likely to produce for you on a consistent basis. If you are unsure, now is the time to get a firm grasp on your assets, and make any adjustments as needed.

Based on those sources, you can use a basic retirement withdrawal calculator to predict how long the money will last if you withdrawal a certain amount each month. As you do so, don't forget to factor in your best guess for inflation, whether you want to leave money to family, any tax consequences, and appreciation of hard assists, like art or classic autos.

Social Security is another pillar of your financial house. The government web site provides a calculator that allows you to predict what your monthly checks will be, depending on when you begin accepting checks. If you missed it, read a post from a few months ago , How To Decide When To Start Social Security

Do you expect any inheritance from a parent or relative? While I strongly suggest you don't count on this money for part of your planning, knowing it may be there for you at some point in the future allows you to make "what if" plans.

It is Budget Time

Next, as I wrote about 6 weeks ago, develop a retirement budget. You will have certain expenses that continue whether you are working or not.  If you own a home property taxes aren't about to cease. Cars will probably be needed well into your satisfying retirement; remember to plan for both repair and replacement. Food, utilities, vacations, health care costs, clothing...these things will continue.

Note: In Monday, December 3rd NY Times Business section, see the excellent article on the reason to budget.

What will take some real thought on your part is the shape you want your retirement to take. Do you have plans to travel extensively or buy a vacation home near that favorite lake or ocean? Do you want to see family members on a more regular basis which means more travel? Is an RV and the open road calling you?

Or, are you anticipating a simpler lifestyle, one that keeps you closer to home. Are you content to explore opportunities to become involved and volunteer in your own backyard? Are you thinking of downsizing your living space to save expenses and work?

What about adult children or parents? Will they be part of your life both in terms of time and expenses? Should you budget for extra money in case your parents end up needing substantial financial support?

Obviously, a large factor is deciding which of these retirement lifestyles (or a combination of them) you plan for is determined by your income. I've always wanted an RV, but the budget to buy and maintain one didn't exist for several years. I'd spend my summers in Flagstaff but not wanting to be away from family that long makes even that 3 hour distance not feasible at this time. I retired before my financial foundation was where I expected it to be. Through a conservative lifestyle and prudent budgeting things are just fine. But, I determined early on the champagne lifestyle wasn't going to happen on my beer and wine budget.

Things Change: Plan For It

Importantly, my desires for that lifestyle changed. It no longer appealed to me. Being home, with family and friends is what makes a satisfying retirement for me now. Volunteer work with Junior Achievement and the Friends of the Library  and the simple pleasures of reading and enjoying all Arizona has to offer are what I aspire to now.

The bottom line for you: pick the lifestyle you think you want to retire to and budget for it. If the numbers work for you, great. If they don't figure out where you can prune while still maintaining what is most important. But, don't be surprised if your goals change as you move through this stage of life. It is the rare person who can predict at the beginning of retirement what his or her interests and desires will be 10 or 15 years down the road.

One more hint: I believe there are three retirement lifestyle phases. If you love to travel and explore you are much more likely to do that in the first decade or two of retirement. If you want to scuba dive the ship wrecks off the coast of Bermuda, don't wait too long (I've done that and it is a blast!). That means your budget will show dramatic shifts over time. What you set aside for travel in the early phase will taper off, to be replaced with higher expenses in health care or maybe dining out.

How much money is enough to retire comfortably? The simple answer is enough to allow you to live the way you would like to at each stage of your retirement lifestyle tempered by the reality of your financial foundation.

The real answer is not one really knows, including you, until you are in the midst of it. The best you can do is plan well, adjust as needed, and be happy with what you have. The most miserable risk in retirement is not running out of money, it is running out of the joy and satisfaction that retirement can mean for you.

November 29, 2018

Does Jimmy Buffett Really Have The Answers?

The ultimate Boomer, Jimmy Buffett,  will be 72 on Christmas Day. Even though he only had a few hit records, Jimmy continues to be one of the biggest concert draws, year after year. In fact, he was in Phoenix a few days ago for a sold-out concert. He portrays an image that is a combination of beach, booze, sun, women, and song into his 7th decade. His lyrics are often witty, literate, and captivating. For millions of  Parrotheads, he speaks to their dreams, aspirations and lost youth.

Confession time: I am a semi-retired Parrothead. I have been privileged to see Jimmy in concert several times, once flying to Denver just to see his show. There is no way I can see him in person or listen to his music and not smile. You can bet whenever my wife and I go to Hawaii Jimmy's music is along for the ride. He has been very much part of my satisfying retirement.

With tongue firmly planted in my check, I contend that many of life's important lessons, especially for us retired and pre-retirees can be found in the lyrics of Jimmy's music. Not so sure? Here are some examples to convince you I am not just a cheeseburger in paradise:

"Few have ever seen, most of them dream.  I've got to stop wishin' and got to fishin'."
  • Too many folks dream their life away without doing what they really want to do. There comes a time to stop dreaming and a time to act.

"All of the faces and all of the places, wonder where they all disappeared.
Vision of good times that brought me so much pleasure. Makes me want to go back again."
  • I have known so many people and been to so many places, but they are no longer part of my life. Luckily, I'll always have my memories and I can visit again anytime.
"Oh, yesterday's on my shoulders so I can't look back for too long. There's just too much to see waiting in front of me. And I know I just can't go wrong."
  • Memories and the past are great, but sometimes they just hold me back. I am excited by what is ahead.

"I'm growing older but no up. My metabolic rate is pleasantly stuck. I'd rather die while I'm living, than live when I'm dead."
  • I don't care what the calendar says, I can still be a little kid sometimes. I don't want to always act like a gown-up and I refuse to stop grabbing all that life has to offer.

"I'm a cultural infidel,. believe in common sense. I'm a cultural infidel, love the present tense."
  • They may not be "appropriate" for someone of my age but blue jeans and funny T-shirts are just fine for me. I don't live in the past; I take what's best about today.

"I wish lunch could last forever. Make the whole day one big afternoon."
  • My schedule is mine. I understand the importance of being wholly invested in whatever I am doing at the moment. And, if that is a long meal with friends, so be it.
"Ain't it funny how we all turned out. I guess we are the people our parents warned us about."
  • My 20's were a blast and completely different from my life today. My values, lifestyle, choices, and mindset then would probably shock many of my friends now. But, I learned tolerance and the ability of maturity to work its magic.

Jimmy speaks to the parts of us that mean so much: treasuring our memories but not living in the past, staying active and full of dreams, and keeping the streak of non-conformist alive, if only in our mind. I wouldn't suggest we try to model our life to fit the image Jimmy projects. But, it is a fun escape with some life lessons tossed in.