January 14, 2018

"I Want To Retire Some Day. How Should I Prepare?"

Clock is ticking down, but you aren't there quite yet

If you are reading this blog, I assume you have some interest in retirement. Maybe not tomorrow, or even next year. Maybe it is a savings and money issue. Maybe you enjoy your job and the stimulation it gives you. Maybe your responsibilities with your family must be front and center for now. Maybe retirement scares you a bit. That just makes you normal. But, eventually you want to retire and would like some suggestion on how to prepare for the day when you are ready.

If you are already retired, I am asking a favor: read this post anyway, and then add you own hints and ideas as a comment. Your experiences qualify you to help those who have yet to make the move.

A) Make Your Financial Projections: Get a paper and pencil, spreadsheet program on your computer, or anything that will help you with the following:

What is your projected income from now until you retire. Obviously, this is a guess. Your job might disappear tomorrow. But, based on your past situation, you should be able to make an educated guess of what you expect to make from now until you do retire. 

What do you expect to receive from Social Security? Avoid the "it won't be there for me" panic attack. We don't know the future, but we know the present. If Social Security undergoes revisions, then you will adjust your other projections. But, for now, use what is real today.

 You get a yearly report that tells you what you can expect based on your past earnings. Do you think you will have to take your payments as early as allowed, or will you be able to wait? There are logical reasons for both courses of action that are based on your status. Add that monthly amount to your projections. There are often slight upward adjustments to your monthly check, like 2018's 2% bump, but it isn't enough to change any of your planning.

What is the current status of your retirement savings and investments? You can't predict what the market will do. You can project how much you plan on saving and investing in the years ahead. Using a conservative growth projection, what should you have when you are ready to retire? What do you need to have available when you retire?

Here's a biggie: what about health care costs? None of us knows what the future holds in this area. Personally, the only thing I expect are prices for coverage, medicines, and services will go steadily up. Plan on at least a 10% increase every year until you are eligible for Medicare (or its successor). If you are lucky enough to have good coverage through your workplace, you are lucky. That removes a large worry from your plate, at least for now.

Be aware, that even with Medicare after you turn 65, expect to spend at least $240,000 on medical expenses during the rest of your lifetime.

OK, now with those figures available to you, can you live on that for 30 years? People in good health today who are in their 40s or 50's can expect to live into their late 80s or mid 90s. If you retire sometime around 65, you will have to take care of yourself for another 30 years. Can you?

B) Make Your Lifestyle projections: Your financial situation will determine the overall structure of the life you will lead in retirement. Lifestyle issues will determine the quality: whether it is enjoyable and satisfying. Are you ready?

Where will you live? Many folks want to escape weather they don't like and use retirement as the motivation to move somewhere more to their liking. Or, their family lives somewhere else in the country and moving closer would make them happier.

Others like the roots they have established where they are, have family and friends nearby, and don't want to go anywhere. Moving to a retirement community on the other side of the country would never cross their mind.

Do you envision yourself in an "active adult" community, an age-restricted setup, an urban or rural environment, or selling everything and becoming a nomad in an RV?

What about the complications that arise when one or both spouses are with each other 24/7? Trust me, this is a a major adjustment for both partners. No matter how much Dr. Phil you have watched, how many books on relationship building you've checked out of the library, and how much you love your partner, being together all the time is tough without some planning.

Do you have something besides work that you love to do? If work is your vocation and avocation what will you do when you don't have that anymore? Do you have any interests, passions, or hobbies you'd love to explore? It is best to figure that out before you walk in the door of your house, retired, with no idea what to do next.

I've made the point many times in multiple posts that retirement is a huge adjustment for anyone. I don't care how well prepared you think you are, there are things you have not forseen that will happen. Such uncertainty shouldn't freeze you in place. Life is all about change. There is no way to cover all your bases ahead of time.

So, what to do? Plan, plan, plan. Then plan some more. Consider everything you know and things you know you don't know. Then, when the time is right for you, just do it. You will learn to adjust. You will struggle, grow, panic, and thrive. That is life whether you are retired or not.

January 11, 2018

Life-Alerting Challenges Can Open a Door

My young family had just moved from Salt Lake City to Tucson. With two daughters under the age of 3, my wife and I were excited by our new adventure. We had grown up in the east and had no idea what living in a desert climate would be like. Though we enjoyed our stay in Utah, the thought of no more snow and cold winter days had too strong a pull. 

I had accepted a job with a start up radio research firm. They were in the market to buy radio stations across the country and assured me I was an important part of their plans. The future opened up before my eyes.

Less than 8 months later, their plans and my life had crashed. The purchase of the radio stations had fallen through. The president of the research company had quit to start his own firm across town. With almost no staff, no marketing budget, and me woefully in over my head, the end result was predicable. I was fired, given a small settlement, and sent on my way.

I can't describe the terror my wife and I felt. The job I left behind was already filled. There was no other company in town that was looking for what I had to offer. Four hungry mouths needed to be filled and I had no idea how that was going to happen. 

After a few weeks of panic and thinking through my options, it was clear the only logical decision was to start my own business. Had I built enough positive feelings with those I had interacted with over the previous five years? Could I develop a marketing strategy that could be put together on a shoestring budget and work? Frankly, there was no Plan B. This idea had to succeed. 

A scary 7 months later, things began to jell. One major client took a chance on me. His influence was enough to convince others to follow. Clients began to enjoy better ratings, bringing more business to my door. Two major group broadcasters  each signed contracts. Eventually, what begin out of desperation on a kitchen table blossomed into a successful 20 year business.

Sometimes what happens in life is a case of "right place, right time." Other times we make our own future through an idea, maybe a dash of luck, and an extra helping of perseverance. Prayer plays an important part for many.

I am quite interested in your story of being faced with a failure or life-altering problem, and how you turned things around. It may be a story of job loss, like mine. Or, you had to turn things around after a divorce or death of a spouse. It could be a problem with an adult child that needed a special combination of effort and luck. Maybe it was finding your life severely limited by a health issue you hadn't expected and couldn't "fix."

There is tremendous restorative power in sharing experiences. We learn we are not alone. We find we have more strength than we believed.  We may be inspired by how someone else approached a problem that bothers us. We may find a new direction to follow. 

I ask that you add to our discussion and help all of us learn from your problems and your strengths.

January 8, 2018

The 10 Commandments of Retirement

Borrowing rather shamelessly from the Bible, here are 10 "commandments" that will help you increase the odds that your retirement is a satisfying oneUnlike the Bible's version, none of these are necessary to keep you on God's good side, or keep you from breaking a law or two. But, at least in my view, they should form the foundation of your future.

Thou shall not:

Spend More than you make. There may be times in your life when this was necessary. Few of us can buy a house or car without taking on debt and a total obligation well in excess of our cash flow. College education for the kids, major medical bills...life happens. Having the ability to borrow money and temporarily go into debt is OK. What can quickly ruin your retirement, however, is spending on wants and desires in excess of what your income is. The basic rules of finance don't get suspended once you cash your last paycheck. Funding your retirement with credit cards, home equity loans, or other options that put you in a perpetual hole will only get deeper. 

Ignore the need for a budget. Closely related to the point above, I don't know how you can make it if you haven't kept and maintained a budget for years in advance of retirement. That need continues. In fact, when regular paychecks stop, tighter control over your income and expenses is even more vital. The old rule of thumb is you should plan on spending roughly 80% of what you spent before retirement. I suggest that "rule" no longer applies. You should develop a budget based on your resources and what you think you will spend. If those two numbers work for you, then the percentage is not terribly important. But, you must maintain a budget.

Assume others will take care of you. By others I mean the government, your old employer, your family, or winning the lottery. We are living in a period where personal responsibility must be your primary care provider. It is likely you will receive some assistance in the form of Social Security and Medicare. If you have a pension you may receive everything you expect. Your family very well might be there for you every step of the way. But, I strongly urge you to plan as if none of that support will be there when you need it, not because I am overly cynical but because ultimately whatever happens will fundamentally affect your life, not theirs. 

Make a retirement plan and never review or change it. An overworked cliché, maybe, but still true: the only constant in life is change. That is absolutely true when you retire. There is no way you can correctly anticipate what interest rates, the stock market, real estate, or inflation will do over the next 20 or 30 years. The political process guarantees unpredictability. At the very least, once a year take a look at every assumption, every budget category, and every projection of your future income. Adjust as required.

Become bored and restless. Too many retired folks go back to work because they don't know what to do with all the free time. Others spend their days in an arm chair, watching TV or flipping through magazines. Still others play two rounds of golf a day, not because they love it that much, but because it fills the time. This should not happen. Time is a priceless resource. Control over how you spend it is one of the biggest pluses of retirement. Find your passion. Find something to do that jump-starts you out of bed each morning. All too soon, you will wish you didn't squander something that can't be bought, can't be stored, and can't be replaced. 

Treat a spouse or partner poorly. The entire dynamics of a relationship changes when one partner retires. To assume the person who just stopped working gets a free pass and can contribute nothing to the smooth operation of the household is not going to work. All that extra time together can be the greatest period of your relationship, or can contribute to the rapidly rising divorce rate among older Boomers. Work hard on your budget and finances...work even harder on strengthening your primary relationships.

Move right after retirement. The stress of retiring is substantial. Suddenly what your life looked like changes. Much of what gave you purpose and meaning is over. That is not the time to tear out the roots of your home life. Regardless of how much you want to move away from the rain or snow or desert, no matter how much you want to live near your grandkids....do not make that decision for at least a year. After the upheaval of not working settles down, then you are able to rationally look at what you'd be giving up and what you'd gain by moving. 

Ignore your health. I don't need to belabor this point. If you don't feel well, if you don't take care of yourself, and if you don't follow common sense steps to maintain your health, your retirement will not be all you want it to be. If you already have health issues don't stop fighting for the life you want. You have a mind and you have creativity. You are alive and you are a unique being who have things to contribute and people to love.  

Allows others to define what a satisfying retirement is (including me). This is a personal journey. Lots of people will tell you what to do or sell you a book with the 8 steps to a happy retirement. Heavens, I blog about the subject every three days! But, the bottom line is retirement will become uniquely yours. Take all the input and suggestions you can. But, in the end, you decide what your life will look like

Become a curmudgeon. The stereotypical grumpy old man (or woman) isn't a requirement of aging. Don't become so set in your ways that you reject everything new as flawed and no match to "the good old days." No one likes to be with a grouch.

Unlike the tablets Moses gave us, these ten commandments aren't written in stone. What have I missed that should be the 11th or 12th commandment? What in your view is the most important one on my list?

Or, do you believe that retirement is the time of life when the whole concept of a "commandment" is not appropriate? You spent your working days taking orders from others. Now, it is time to go with the flow and live for today.

I look forward to your thoughts.

January 5, 2018

Retirement and Humanity

Maybe it is because Christmas with its serious doses of family love and good cheer is still fresh in my mind. Maybe because it is I am so tired of reading and hearing about all the division, hate, partisanship, and violence that we accept as part of daily life. Maybe it is a dawning revelation that, as a group, retirees, could be a powerful force for so much good and change in our fractured world.

Whatever the genesis, I wanted to step off the normal topic list of this blog just for today to try to make a point and stimulate a meaningful discussion. Those of us on the other side of the working world divide are well aware of the need for prudent financial planning and control. All of us are quite aware that our health, or lack thereof, will play a large part in how satisfying our retirement will be. Those in any type of serious relationship understand that love between two people is the foundation of everything. That includes single folks: relatives, friends, even caring neighbors can fill that role. Bottom line: we are not built to be alone all the time.

I am a Christian. That said, there has been a lot done in the name of my religion that disturbs me, causes me to wonder if some people who wear the same label have actually read the Bible. The acceptance of the central message of my belief is not that hard to understand, but difficult to live day after day.

I will assume that some of those who follow a different faith, be it Jewish, Islam, Buddhism, Hinduism, whatever, have some of the same feelings: that the core of their belief system has been hijacked, politicized, or in some way perverted from how it began. I guess an atheist would also struggle with core beliefs and how the world is functioning, even without belief in a god.

This is not a post about religion, or its power to do good and evil. But, I had to set the stage for what my main point is: the time of life we are so privileged to enjoy should come with a moral or ethical obligation to make the lives of those not so lucky just a little bit better.

As I look at my 2018 budget and worry whether the money set aside for vacations, or Netflix, or dinners out will be enough, I ask myself about my priorities. If I believe what I profess to believe then I have three simple marching orders:

1) Feed the hungry
2) Protect the weak
3) Welcome the stranger

There is nothing in there about vacations, re-doing the bathroom, buying a new car, or even refreshing my wardrobe for spring. Nothing. They don't make the list. Yet, I live as if they were actually somewhere in the top 10.

I am asking you to consider a simple question: as a retiree should we have an outsized sense of responsibility for engaging in the world's problems? Should we be using our gifts of time and freedom to do more than just make our own lives satisfying? 

Is retirement a time when our humanity can really exert itself? Is it the phase of life to get back to work - living like our bounty is meant to be shared to ease another's burdens?

Honesty alert: My answer is yes, but I am not putting that into practice. Shouldn't part of my retirement be a more active living of my faith?

I apologize if you came to Satisfying Retirement for the first time today, and wonder whether you have been taken to the wrong site. NO, you are where you want to be. The next post will be about one of the subjects that form the basis of a retirement blog: relationships, health, finances, whether to move, how to use your time, and so on.

Every once in a while, though, I must address my inner demons and express a strong feeling.

Thank you for reading.