January 17, 2018 – Many important things in life rely on a three sided approach. Christianity has as the Holy Trinity the Father, the Son, and the Holy Spirit. A pyramid relies on 3 faces for stability. Less seriously, our brother likes to say that a good gumbo relies on the holy trinity of vegetables: green peppers, celery, and onions (we would add okra). We think there is a good case to be made that a good retirement relies on three key supports as well.
3 Pillars of Retirement
1. Health. Far too many people yearn for and plan for a great retirement, only to have those hopes shattered by a serious change in their health. Sometimes that happens before they retire, other times it happens not along after their working days end. Instead of enjoying golf, tennis, hiking, fishing, or whatever – you find yourself living a sedentary lifestyle, often with crushing medical expenses and painful treatments. Having a serious health change can also affect many other aspects of life too, such as where you live, and how you plan to stay busy in retirement.
The problem is that no one ever thinks bad medical news will happen to them. But too many times, one day you are healthy; the next day a stroke, heart attack, cancer, or serious joint issue totally changes your life.
What you can do
In most cases, there is not much you can do about it. But you can at least be prepared with steps like these:
– Build an expense cushion. Plan on putting extra money into your retirement savings because almost everyone has big medical expenses as they get older, and they are usually much worse than anyone plans for.
– Stay healthy. If you are obese, smoke, drink more than your doctor advises, or don’t exercise regularly – look out. Chances are you are headed for a medical problem that could wreck your retirement. Likewise you need regular physical exams and to follow doctors’ recommendations.
– Consider long term health insurance. These plans can offer peace of mind and stability.
– Consider the availability of good health care when choosing a place to retire. If you end up with a serious condition, you might have to move to get good and convenient care.
It is really hard to do the things you want to do, or even survive comfortably, if you don’t have enough money in retirement. Travel, recreation, and a nice place to live all cost money. Not to mention ordinary bills for medical insurance, health care, transportation, food, and taxes that must be paid. As certified financial planner Ellen Siegel said in a recent MarketWatch Retirement Weekly article, “Retirement will cost you more money than you think. Get real about it. Get a bigger nest egg than you think you’ll need because you will spend it.” More critical than that, according to Mark Hurlbert of MarketWatch, we now have to plan for much longer retirements than we used to. The median 65-year old male today can expect to live to 89 – and because that is the median, half of us will live longer than that!
Just like planning to stay healthy, getting ready financially for retirement requires an early start. Hopefully you have been taking advantage of every retirement savings plan you could, and will retire with adequate resources. But if you think you are going to come up short, here are a few things you can do to try to recover:
– Start saving now with renewed vigor
– Delay retirement
– Plan to work at least part-time once you retire
– Downsize and move to a less costly area or home
– Drastically reduce your expenses, the sooner the better
– Get creative about how to do the things you want without spending a lot of money
One of our favorite things to say about retirement is that it offers a “do-over on life”. No matter how your life has worked out so far – where you lived, what your job was, what you did in your spare time – retirement gives you the opportunity to completely start over.
The problem most people have with actualizing their retirement possibilities is that they don’t invest time in planning. Typically they want to retire, but when that day finally arrives they just let it happen. Events overtake them, instead of vice versa. Robert Siegel, who recently retired as the long-time host of the NPR show “All Things Considered”, recently discussed what he was going to do in retirement with Terry Gross. He likened feeling like Benjamin in “The Graduate”; everyone keeps asking what he is going to do with his life, but he has no idea. Meanwhile “helpful” advice like “Plastics”, or in Robert’s case, “Podcasts”, keep pouring in!
There are so many things to plan for in your retirement we can only scratch the surface in this article. Here are some of the top planning items to consider (see more resources below):
– Where to live
– What kind of community
– What to do to stay busy
– Work or not
– Family and friends considerations
– Retirement and your spouse or partner
Planning needs to start early and often for the best results. Our free eBook, “The Baby Boomers Guide” is a good place to start. It has checklists and questionnaires to help you and your partner think through some of the key issues.
Getting to a rewarding retirement is not something you just fall into. It involves planning, keeping your health, and having the financial resources to be comfortable and do what you want. If you do it right, it could be the best time of your life! Good luck.
Comments? What do you think the pillars supporting a great retirement are?
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