June 15, 2017

How To Guarantee a Satisfying Retirement


If only that were possible. Except for knowing you will die at some point, life doesn't come with a guarantee, and that includes retirement. 

After 17 years of experience, there are a few key concepts I'd be glad to share. Maybe I can help you eliminate some of the risks involved, though there is no guarantee.


1) Numbers

All sorts of numbers will determine the extent to which your retirement is satisfying: figures in your budget, income, outgo, the size of your investments and pension or IRA, the age you decide to start Social Security, and how you spend the hours in a day.

Not completely under your control but still important is how long you will have good enough health to do what you like to do. Days and nights spent in front of a TV or in an easy chair aren't very satisfying if you have other options. 

2) Assumptions
No one really know what the government will do with Medicare, Medicaid, or Social Security payments, or what will happen to the health insurance markets. Inflation, deflation, interest rates, the end game with terrorism, all will affect retirement. Being frozen into inaction by uncertainty is not a good choice. Waiting for complete clarity means waiting forever.

The only way to approach these unknowns is to make basic assumptions and move forward. Until something definitive happens, plan on the social safety net remaining intact for you. Assume that interest rates will rise and fall, but in ways that won't place your retirement in jeopardy. Assume that terrorism will continue for the foreseeable future, but realize your odds of being struck by lightning are substantially higher than being harmed in some sort of attack or bombing. 

Your attitude and approach to each day are under your control. Assume that, too.

3) Flexibility

Flexibility is in your willingness to adjust things as you move through retirement. A plan is important; entering retirement without one is not advised. Sticking to that plan without allowing for changes based on finances, interests and desires, health, or family situations is just as dangerous. Show me someone who claims he or she developed a plan for success after work and has followed it to the letter, and I will show you someone whose original plan was severely lacking in details. 

Odds are good you showed flexibility when you were raising a family. Dr. Spock was good but didn't have all the answers. If you have ever been the parent of a teenager, I know you learned to be flexible. It is quite likely you were flexible in how you fulfilled your responsibilities at work. You adapted to changes as needed. You changed employers when required. You made do when that was required. 

Retirement is no different. Flexibility is a show of strength, not weakness.

4) Luck

I'd be less than honest if I didn't note that sometimes luck plays an important part in your retirement. Through no fault of your own the economy slips into a serious recession, taking a chunk of your savings with it. An impaired driver slams into you at an intersection, putting you tens of thousands of dollars in medical debt.

You try your hand at building your own business, and you just happen to tap into the hottest trend in the world. It succeeds beyond your wildest dreams and Google buys it for 10 billion dollars. My mom's chance visit with me in tow to a local radio station resulted in an interest and career that stuck with me for almost 40 years. My going with her that day was pure happenstance.

Luck is when you and reality intersect in a way that helps or harms you in a way that you can't predict and can't avoid. A dictionary definition is, "success or failure apparently brought by chance rather than through one's own actions." Many religious traditions would say that God is ultimately in control, there is no such thing as luck. In that case, I could define luck as what happens when we can't explain what God has decided to do (or not do).


Get a warranty for the new solar panels on your roof or the repair work on your car. Get serious when planning for your retirement. That is the best guarantee available.


7 comments:

  1. Great post. The overall message I get here is to make your best plan with the best information available, adapt as needed, and then go forward in faith and enjoy.

    I've had to do this with my own retirement plans, and also in planning for my two adult sons with autism. After years of trying to figure out a guaranteed future for them after I'm gone, I finally realized that all I can do is make the best plan possible for them, and have faith.

    As the Dalai Lama said, If a problem has a solution, there is no need to worry. If a problem doesn't have a solution, there is no need to worry.

    If we are looking for certainty and guarantees, we are going to miss our lives.

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    1. The Dalai Lama's saying should be placed in a prominent place in all our homes. Worry is 90% waste. Preparation is 90% of the battle.

      Certainty is that the washing machine will break just after the warranty expires. Certainty in retirement just doesn't work.

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    2. Love the washing machine warranty metaphor! Ha! That should be put in a prominent place along with the Dalai Lama quote!

      Delete
  2. Regarding certainty in retirement...the only certainty I have is that I will figure things out, as Galen says, with the best information I can find and a flexible, positive attitude.

    ReplyDelete
    Replies
    1. ...and that is the wisest course to follow.

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  3. Bob, I think the likelihood of guaranteeing a satisfying retirement is about the same as guaranteeing a satisfying life! And I would bet that there's a strong correlation between the two.

    Jude

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