March 25, 2017

Two Approaches to Retirement


Retirement is a unique journey for each one of us. While there are basics that apply to everyone, it is the ability to shape this stage of life to meet our deepest desires and needs that make it so satisfying.

If I had to simplify the process I suppose I could put retirement into two broad categories: the "reasonable, got it covered, done my homework" type of approach, and the "Let it roll, what will be will be, I will adjust as needed, it is all good" crowd.

Neither of these are right...or wrong. That is what is so fascinating about writing a blog focused on retirement. Anytime I think I have it all figured out, someone leaves a comment, I read a new press release, or my own life kicks me in the shin and says, "Not so fast."

Certainly, I fit much more comfortably into the first category. My career was decided at age 12. I fell in love with the life of a radio announcer and never wavered. Saving for retirement started at 24. I have experienced only two major employment setbacks, getting fired and later having my own business slowly die.

But, the planning and "got it covered" mindset allowed me to thrive through both situations. Even finding myself retired at least 10 years before I thought might happen has been a blessing. June will mark 16 years on the other side of the employment equation; I can't imagine in my worst nightmare going back.

My parents taught me the importance of delayed gratification. My dad was unemployed for several stretches of my youth. He lost a substantial amount of money in a failed business attempt. Yet, never, ever, did he allow his struggles to upset the family. He was a steady rock. During tough times mom's school teacher salary kept us in casseroles, with a roof over our head, and a feeling of safety. I learned early on the value of planning and adjusting.

Over the last few years Betty and I have let a little of the "let it roll" attitude into our retirement. She has always been a bit more of a free spirit and has encouraged us to take the long RV trips, or rent a beach house for a family gathering. She decides we should stretch the budget in one area, but insists it contracts somewhere else. No deficit spending in the Lowry household if we can help it (last year was an anomaly!).

Our oldest daughter fits the first category well. Like her parents she is conservative financially, though willing to take a risk if she is comfortable with the pro-con balance. She keeps a tight grip on the family budget and expenses. She and her husband will probably look forward to a retirement that is comfortable and happy.

Our youngest is more in the "money is meant to be spent on experiences" camp. She has skated near the edge financially several times, but always manages to pull herself back to stability. She takes steps to cut expenses and increase her income so she can spend an extra week in Scotland or Spain or go to Disneyland with her nieces and nephew. Saving is not really in her nature. Retirement is probably going to look quite a bit different for her. But, importantly, her decision is absolutely right for her. She loves her life.

So, how about you? Which fits you best? Or, have you found a way to straddle both approaches, a little bit planning and conformity seasoned with a dash or two of "what will be will be?"



24 comments:

  1. I recall the famous Stanford candy study which showed that one of the most important markers for success in life was whether or not a child had the ability to delay gratification.

    That being said, I was pretty good at delaying gratification ... and I was modestly successful in business and life (emphasis on the word modestly). But my son is the exact opposite; he lives in a different, right-brain world -- and yet he's doing just fine. So go figure.

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    1. I guess the answer is there are many paths to happiness. Finding the right one for us is the challenge.

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  2. By nature I am a planner and I planned my retirement starting in my early 30s. My wife couldn't see it and used to admonish me for "spending" all our money on the retirement savings plan. She couldn't quite understand that I wasn't actually spending it, all she knew was that it wasn't available for spending so it was "gone". Planning is all well and good but you have to roll with whatever life throws at you as well, when conditions change sometimes you need a new plan. Over the years I lost my job twice during economic downturns but I also dedicated myself to the plan to get another job, which I quickly did both times. In the end it has all paid off and we are now living the retirement we dreamed of (planned for?) We winter in Mexico getting away from the cold northern weather, travel to Europe for a month each year, we didn't have to sell our house to cash-out for retirement which allows us to live close to our daughters and grandchildren, and importantly we were able to decide our own retirement date (most of my friends and coworkers were pushed out before they were ready). In fact all the previous planning now allows us the flexibility to not plan and life is good. Most of the people that I know who are non-planners seemed to have a life by the tail when times were good but many are now struggling with, what is for them, a significant drop in living standards as they consider retirement.

    - David

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    1. Your story is strong validation for the benefits of long term planning. Some might argue that you put off living until retirement. I'd argue you lived appropriately in each stage of life. The freedom to spend winters in Mexico and a month in Europe wouldn't have been feasible while employed, and impossible now without the foresight of preparation.

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    2. I certainly don't want to rag on young adults who are creatively living a "right brained" lifestyle, but it's really hard to say how they are going to be doing when they age or just when times get really tough. They may, in fact, seem to be fine with their lifestyle decisions right now, but have they weathered any of life's blows to the midsection yet? That's when you know that your "grasshopper" choices probably aren't going to get you through unless you have permanently generous and wealthy parents.

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  3. I find your description of your two daughters interesting. It's not just examples, basic nature plays a part, too. Personally, I am a planner. My parents were spendthrifts and I didn't care for that lifestyle. My daughter can't hold onto a dollar with super glue. Oh well. As a retiree, one challenge is finding a spending balance, assuring enough for end of life care, while enjoying the pleasure of today.

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    1. As long are both are happy then the different choices they make are fine with me. My youngest daughter's approach has helped me be a bit more open to some things that aren't strictly part of the plan.

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    3. Bob, I've said to you before: "When you are retired the future is now." As I commented above I am by nature a planner and saving for the future was something I always did but now it's all about experiences, the money has been looked after so that job is done. My plan now is to enjoy the payoff from all those years of saving.

      - David

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  4. We attended a program called "Whitehall Management" in the 80's and 90's when Ken first opened his chiropractic practice.They helped us understand the importance of saving, getting debt free, and planning ahead.So we did.And as a result we were able to retire a couple of years early, as health care practices became more and more stressful to manage--Ken retired at 59 instead of 62 and it's worked out pretty well.That said, we then went "with the flow" and bought a house in the mountains, very emotionally, (as you know) and it did not quite work out. That scared me. We luckily got out of that situation unscathed,financially, but it was a heck of a lot of disruption--maybe as time passes I'll just say it was an adventure.So we're back to the way of life we had originally planned and it's going well. We did decide to get a bit more adventurous and take some far flung trips this year, and spending that money is making me antsy-- yet we feel we need some exotic experiences,make some memories while we are young enough to really enjoy the activities.. I have never been to Europe ever!! I expect this year to be pricey but we will pull in the travel plans NEXT year when we'll just do USA travel and local stuff. I am seeing that retirement is not at all a straight path from point A to point B! Planning ahead, to a point, makes all the difference in being comfortable..and having the leeway to make a few changes along the way---

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    1. Your vacation choices are very much like the ones Betty and I have made. Last year we went way over budget, this year is much closer to the vest. In fact, I am typing this while we are on a 4 day RV trip at Patagonia Lake, our first getaway this year and only 3 hours from home.

      BTW, we have been to Europe a few times and loved it, though I dislike intensely the long flights to get there!

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  5. Another thought I had--there is delayed gratification..and that is important.But an equally important quality that helps with retirement and with savings, is, developing the ability to enjoy life with LESS..I mean, being happy with simpler things. BEFORE retirement,so you HAVE MONEY TO SAVE!! Being able to eschew luxury vehicles every 2 years,living in a modest home vs a McMansion, and finding all the freebies in town for entertainment wit occasional splurges. I have always been very content with a moderate lifestyle.. and so , in retirement, "simplifying" was not such a big change.I still cook most of our meals, we splurge when we really will get a lot out of it, but mostly we enjoy free concerts,the library,long walks,hikes in the local parks,etc..and none of that takes much money. Developing a happy/frugal state of mind helps immensely..the sooner the better! Today we are going with a meetup group on a Historical Walking Tour in Mesa, a local guide is showing us various historical buildings,coffee shops,etc. (FREE EVENT) and then we will meet our son for a cheapie empanada dinner at a local place on Main in Mesa.

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    1. I get excited when I find something free or low cost that turns out to be fun and memorable.....Odd but true.

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    2. Can you be a mixture of both types? I had always thought of myself as a non-saver, didn't think much about retirement, etc. My family viewed me as a spendthrift because I bought new clothes, had a new-ish car, bought what I wanted at the supermarket, had nice furniture, etc. However, it turned out I (and my husband) were thriftier than we knew. Early in our marriage we invested in his military career, and have a lifetime income and excellent healthcare that doesn't cost us anything. Although we bought ourselves a new car, we had just the one car - my husband always used public transportation provided for free by his company. I bought what I wanted at the market, but I didn't go crazy, and I wasn't out shopping at the mall or elsewhere all the time. I shopped when someone needed something. Even though our furniture was nice, we bought it because it lasted. We've always lived simply.

      We did hit a rough patch a few years before retirement when my husband's income was slashed by over 1/3, but we buckled down, paid off all of our debt, and were able to retire three years after that which surprised everyone, especially my family. My husband and I call ourselves "accidental retirees" because we never were actively planning it, but had aparently done everything right anyway so that we could retire when we wanted.

      So, I don't know which side of the process I would put myself on. I'm very good at delayed gratification, of planning for things I want or want to do, and yet at the same time I also sort of let things happen, and take joy in how things can unexpectedly turn out.

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  6. I have always been firmly in the first camp as a planner and saver, having learned those attributes early in life. Deb definitely got more on board as time went by, and realizes our current situation (both of us early retired) is largely due to that mindset. On the other hand we did loosen the purse strings for experiences as well in the fairly recent past, namely traveling 4-5 months out of the year. And I am proud to say our only child, our daughter, has picked up many of the same attributes after getting rid of a husband a few years back who was most definitely in camp two. From what I can tell it appears that most of your readers are from the same camp as yourself, Bob. Probably why many of us are in the situations we are today.

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    1. I'd agree, Chuck. I doubt many wild and crazy spenders frequent these pages, unless it is to see what the other side of the coin looks like.

      When my dad died two years ago, triggering the 4 year process to close down my parents' estate, Betty and I said we would absolutely, definitely, take 10% off the top for trips and experiences we had been putting off.

      That didn't happen. We couldn't bring ourselves to dedicate that sum of money to such expenses. The reality is that we may actually spend that much over the next several years, but we will have to "sneak up" on it, so the total spend isn't so obviously. Silly? Yea, probably.

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  7. I am in the non planner camp mainly, and it has worked throughout what life has given me.

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    1. There is always another way so congratulations! I am a planner but truth be told it's not perfect and plans are often turned on their heads. Fortunately most of my plans worked out but it was just as likely that they would not have. Often people would tell me that I was lucky because of this or that but for the most part it was a lot of work and not luck (same for you I'd bet). The number one piece of luck I have had is that I have remained heathy and that is luck, disease can strike anyone at any time without warning.

      - David

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  8. Honestly, I feel like I bounce back and forth between the two camps. I am mostly a saver but I also know that life is short and you need to enjoy it also.

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    1. I can relate because I do the same thing.

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  9. Well, I am 100% planner, so my following comment must be understood to be coming from that viewpoint: I see the 'free spirit' as perfectly acceptable in the short term but I wonder in the long term who will be responsible. As we all get older the cold truth is that we are unable to work, to produce. We must live off of the funds put away during our productive years. Those who do not save, who do not plan, their needs are part of the many issues we have in this country today.

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    1. In theory I agree completely. If a shortfall is caused by long term irresponsible saving and spending patterns, who is supposed to bail that person out?

      However, if someone cannot save enough because of employment skills and education or faces an emergency not of his making, aren't we to take care of our brother or sister? But, exactly how?

      You raise an important issue, Morgan, with no simple answer.






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  10. I lean naturally toward the planning side. However, when unique opportunities arise, I am willing to make quick, spontaneous decisions, throwing the plans out the window. Also, I have learned that sometimes life throws you curve balls, and I think that it is harder to cope with challenging new realities if you are too committed to following a plan and being in control. So... a bit of both for me.

    Jude

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    1. I am not sure I will ever be able to throw plans out the window, but at least I am standing closer to the window than I used to.

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