We’ve all heard about our friends, family and neighbors who retired “successfully.” That term is about as clear as mud. Success means different things to different people, so how do you define success in retirement?
I’d guess a majority would define it as being about the finances. Since Madison Avenue wizards have trained us to believe retirement is an economic event only, then the person you know who takes trips, spends time on the golf course in the middle of the week, volunteers at the library and other community outlets must be successful at this game called retirement. Right?
Not necessarily. If you have been someone who has intentionally hid your “wealth” from the public eye (only buy used cars, live in the same house you bought at the start of your marriage, bargain shopping is your passion) then you may not appear to be a “successful” retiree. And the guy who is on the golf course every day of the week, even in the rain, may be spending down the funds he has because he believes “life is short.”
Defining a Successful Retirement
Successful retirement is an amalgam of issues: finances are probably the largest, but certainly, attention to other aspects of your life is absolutely key. Are you spending time (and allocating resources to) your spiritual life, family life, your intellectual stimulation (adult learning classes, advanced degrees), your physical health (group outings for physical exercise, gym memberships, and, okay, golfing), and your quiet time (reading, music, etc)? Your retirement is not a game to spend down what you have.
Why take Social Security as soon as you can just so you can afford to take a cruise every year for the next five years? What will sustain you when you are 85 and you have no desire to “cruise?”
There has to be a reasonable mix between spending money (decumulation, we call it) and having some available to carry you through your life. Remember, our parents expected to live to 80 or longer. Most of them were savers who judiciously saved money and sought to pass something along to their kids. We are the beneficiaries of their frugality but we are not as frugal as they were. Should we worry that our kids won’t win the lottery when we pass? Hell, no!
But let’s not put them in a position that our careless spending forces them to have to support us in a basic lifestyle when we run out of money. They are the generation of ridiculous amounts of school loans, boomerang kids, downsizing, divorces, and the Great Depression investment hangover. It is not something they counted on, nor should they. They have their own issues to deal with, and, a constant demand for increasing their own retirement funding.
Related: Who Will Care for the Baby Boomers?
Having a Plan
There has to be an in between. And there is. Your retirement deserves some planning. It will be time better spent than what you do on your next vacation. Please consider the value of having a professional review your financial situation and design a plan for how you will spend those resources and time in retirement.
Knowing what assets to spend first, what assets to defer until a certain date, what assets to invest in guaranteed income later in life, all requires a plan. If it is left to an arbitrary strategy, or lack thereof, the mistakes you make are irreversible. Better to plan it now, than look back in regret.
It’s worth it.
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