Today’s blog post comes from Jay Higgins. He is a financial adviser and an expert in the field. I asked him to write us an article about financial wellness. I’ll be honest I was a little worried it would be littered with industry jargon and boring financial talk. Boy was I wrong. Read on for fresh insight on how to view your retirement. I know you will gain some perspective on an important topic many of us fail to address.
I’d like to tell you a little secret. Now that you know who I am, it may surprise you. I don’t think you should retire. There, I said it.
That statement might come as a shock spoken from a person in the business of retirement planning. Please stay with me, however, and let me clarify what I mean.
What I am not advocating to you is working a grueling American schedule until you collapse on the job. I also am in no way trying to cheapen the importance of carefully planning for the post accumulation (industry term) or retirement phase of your life. So what do I really mean when I say you shouldn’t “retire”?
For many of you retirement is a long way off and probably nowhere near the front of your mind. For a few of you, you may have given it some real thought, and good for you. But for most of you, let me guess the image in your head of your retirement.
On your last day of work you plan to fill up your box, leave your job, and board a plane for Mexico, Arizona, or Florida so you can bask in the sun and enjoy time relaxing. Clearly there are many versions of this story but most of them have one thing in common. They fail to look past the first few weeks of your retirement.
What are you going to do after your vacation or your month relaxing in the sun ends? A normal retirement for our generation is 30 years. That means you have roughly 1,600 weeks of unplanned time on your hands. Not only is this a problem it’s probably not healthy.
Taking a step back, the idea of retirement that society depicts for us is completely unnatural for humans and generally doesn’t promote good health or vibrancy in our golden years. The law of diminishing returns applies to leisure activities as well, meaning golf and vacations eventually lose their luster. Boredom or being idle at this stage in your life will ultimately lead to poor health and overall dissatisfaction.
One writer put it this way, “The quickest way to disease, is a life of ease”.
So, now that you know the potential pitfalls that you may face in retirement, how do you rectify the situation? Glad you asked. There are two main things that I believe you can do to create a “retirement” that is full of vitality for you.
Consider these two things and you’ll be well on your way to a healthy retirement.
- Incorporate work into your plan. Human beings need a reason to wake up every morning. What will be your reason to get out of bed? Work as defined here is a loose term and may not mean getting paid, but responsibilities and action towards a greater purpose are important to your well-being. Paid work can be even better because of the potential for strengthening retirement income. The last few years in any retirement account are where the majority of your growth will come (from compounding). Retiring cold turkey forces you to draw an income off your account, essentially slitting the throat of your account right when it’s about to do the largest amount of work for you. Does this sound like a good idea?
- Redefine your retirement. Every single person has the same amount of hours to spend each week in retirement, 168. Knowing how you will spend yours will greatly improve your chances of being happy with your life. No two people are the same and the allocation of your time is uniquely your own. Rather than defining your retirement hours, work on defining your ideal life. Does that mean working fewer hours, spending some of that extra time fishing, crafting, or reading? Maybe you like to travel or want spend more time with family. Once you know how you would like to live its only a matter of developing a plan to allow you to do it. Yes that will probably mean saving and planning but those are only means to and end. Saving enough money is not the end goal. Then end goal is living and protecting the lifestyle that is healthy and meaningful to you.
Overall this post is not meant to scare you or to make you ignore your retirement. By explaining how the picture we’ve been given regarding retirement is a dangerous myth, my hope is to liberate and empower you. I would like for you to think outside the box when you address your retirement and be confident that you know what will make you happy.
Believe me, working towards a lifestyle that is specifically designed for you by you will make the planning process surrounding your retirement much easier to prioritize. Throwing money at a retirement account without a clear goal is like throwing a dart at a target you can’t see. You’ll probably miss the mark, and many of you wouldn’t even try. Having a clear vision brings the dartboard into view…and then proper planning will help you hit the bullseye.