From the start of this site we’ve looked at many aspects of retirement planning trying to incorporate some alternative ideas into the conversation. The manner in which people will retire, both day to day living and funding their lifestyles, is of course evolving and doing so at a fairly rapid rate. I’ve worked in financial services for decades and all of the concepts about how to save, invest and then withdraw are all valid but appear as though they will apply to fewer and fewer people for the foreseeable future.
Earlier this year I had a series of blog posts looking at lifestyle choices at attitudes in a series called Figuring it Out and so I think a next step is a series of blog posts about retirement but with less of an investment advisor approach as a lot of people, for whatever reason, will never seek out professional guidance. The significance of the Figuring It Out series is that retirement issues might be a little easier to address retirement issues once the other stuff is figured out. You can look at the Figuring It Out posts here, here, here and here.
If regular financial planning won’t be sufficient for some folks those people still need to figure something out, like the horny toad pictured above who can change his color to better fit in with his surroundings, they need to adapt their expectations of their future to their reality.
My first direct exposure to this concept cam from living in Walker. There have always been people up here successfully making their “retirement” work without having $1 million saved or otherwise being rich. We’ve had many posts about my neighbor with the backhoe, there are people who work as contractors of varying types, odd jobs and the list goes on.
This concept is important for all levels of retirement preparedness. People who have not been lucky enough to accumulate something of a retirement nest egg will need income from some form of work, people who are border line on having enough accumulated can relieve some of the burden on their investment portfolios by doing some sort of work and people with more than enough can benefit from the social and mental engagement that comes from working.
There are a few basic, underlying threads to these blog posts. One of which will be the importance of starting to save no matter your age. The more you have saved the more options you will have in the future. Someone who is 60 with no retirement savings probably won’t save enough in the next five years to fund the rest of their lives but they can probably accumulate a pretty robust emergency fund.
Another basic concept is something potentially having to give. For someone who simply cannot start to save money, something will have to give in the future like the benefit of having a nest egg. For someone for saving money now is iffy than the thing that might have to give is some aspect of their regular routine now like maybe eating out frequently as just one example.
I am one who believes luck plays a big role in how things work out. I believe the chances for good luck improve with being a positive thinker. Don’t confuse skill with luck.
Lately there have been quite a few articles on the value of experiences being greater than the value of stuff. This means spending less money on stuff which paves the way for living below your means which might make it easier to start saving money.
One other point to make as part of an introduction that of giving yourself more options, more choices. I did not come to learn the importance of this until I was out of school when I realized better grades would have given me more options at certain points earlier on in my professional life. My wife and I have more life choices available to us by virtue of having lived below our means our entire life together. While we find great contentment in what we do, no one knows what they will want in the future. One colleague from the fire department had a high paying professional career that he grew to dislike, was able to move into a new field but it pays a lot less. He had the ability to absorb the cut in pay by having made some good decisions early on.
Hopefully over the next few weeks we can look at different scenarios that people might be facing and sort through alternative ideas to lifestyle, working, investing and taking Social Security.
I recently had a post that covered some of this ground.