Retirement Planning
Often, thinking about retirement can be difficult because we are not sure what questions to ask and where to start. So lets start with asking the Why, When, How, and Where.
Retirement Before or After Covid
The Covid Pandemic has undeniably changed the answers to many of the above questions, especially the when and the where. Economic stability concerns and travel restrictions, are new elements in the retirement equation.
A good example of how the travel restrictions have played out is the surge in Recreational Vehicle sales and Pick-up trucks.
With fears about safety and sanitation on airplanes and in hotels, many individuals have sought the freedom of the open road.
Prices have skyrocketed due to limited manufacturing supply in both sectors and high demand for existing inventories. Spaces to rent in RV parks have been difficult to come by without advanced reservations.
No doubt, these purchases were not previously planned and were not on many peoples radar until Covid changed our daily routines.
Asking the Why?
There are lots of reasons to retire aside from your financial readiness. Sometimes retirement occurs because of an unexpected threatening medical issue. Sometimes its because we unexpectedly receive an unexpected financial windfall. At other times it’s because we need a temporary respite from work and career in order to re-consider what really matters to us. In America, we have this notion that retirement is something that occurs coincidentally with our eligibility for Social Security if we qualify. If our portfolio of stocks, our 401Ks, Roths, and other retirement plans contain enough money to last us the rest of our days, we may pull the plug on regular work. In order to get your answers to some of the issues in retirement, I highly would recommend that you develop a “Vision Board” that is broken down into various life event categories. This will help you to “flesh out” some of the values, beliefs and emotions that you have around being retired. Today there is a whole cadre of people who buy into the FI movement which stands for Financial Independence. These are folks whose investment focus early on in life is to gain the financial independence that allows them to leave their 9-5 jobs for some type of life adventure. Much of what has driven the FI movement has been the uncertainty that younger people feel about the future of Social Security. Many of these folks have the belief that any available Social Security money they get at retirement should be the cherry and cream on the retirement pie and not the pie itself. These folks are not waiting for their 62nd, 65th, 66th, or 70th Birthdays to retire on Social Security. They are looking to retire either partially or fully at ages somewhere between 30 and 50. Our beliefs about retirement determine HOW we plan for it. Do you believe you won’t live long enough to see retirement?. Do you have medical issues that force you to stay employed for the insurance and as a result you will die working? Do you have so much debt that affording retirement is impossible? Most of us will not be able to survive on Social Security alone without entering the ranks of poverty. Children, if you have them, may or may not be financially able to care for you. To answer the how question, you have to honestly evaluate if you have done some thoughtful retirement planning in the past or if you are willing to start now? Have you consistently reviewed and adjusted your financial portfolio, if you are even lucky enough to have one? Do you work with a certified financial planner or a CPA to learn about the best investment opportunities that minimize your tax consequences in retirement? Do you know the values in any 401K’s, Roths, cash accounts, life insurance policies, or a reverse mortgage? Have you assessed your current and future medical and mental health issues? Do you have an idea of how long you can live independently? Is there a family medical history of diseases that lead to an early death? Do you think you will or you won’t outlive your money? Personally, I have considered the “where” question VERY seriously from a financial point of view. Again, the vision board activity helps to both include and exclude locations. Are you a warm weather or cold weather lover? Do you like the mountains, the ocean, or the open spaces. Do you need to be around people in a metropolitan area or do you favor a remote rural location? My preferences of where to retire included considering such things as being near water, being in a warm or cool climate, access to services such as hospitals and public transportation. You can limit your “Where” to the country you live in, or consider residing elsewhere. After researching for a year, I knew some of by basic requirements. I needed a location that was warm and not too rainy. I wanted someplace that had reliable and affordable medical care. I discovered that I loved the Spanish culture with it’s emphasis on vitality and family, (despite a limited Spanish vocabulary). And most of all, I love the ocean!! I was focused on the exchange rate between the locations I considered and the the U.S. Dollar. I explored requirements for passports, visas, and different types of residency status. I explored the ease of returning to the mainland USA via international airports. I decided to get my Passport and then proceeded to traveled on three separate occasions to Puerto Rico, Mexico and Panama. Of course, Puerto Rico is not cheap in comparison to Mexico and Panima, but it does have U.S. Territory status, so having a Passport is not necessary. The economy and crime in parts of Mexico ended up being a deal killer, despite my love of the very wonderful people. Panama was interesting, but the rainy season, poverty, and overall poor sanitation, dissuaded me, as did all the military and police roadblocks searching for drugs. Now admittedly, I was fortunate to be financially able to visit these places in person, but there are hundreds of books, You Tube to help educate you without having to do the traveling up front. As you can see, this is a challenging and fun process, but it is not easy and it requires doing it before those magic “retirement birthdays”. One helpful retirement planning tool you can explore are vision boards. These help you to see what your values have been, what they are today and how they could change in retirement. You can find many examples of Vision Boards by Googling the term, going to Pinterest or to You Tube. It is so worth the time to put one of these together! Asking the When?
Asking The How
Asking the Where
Get Excited and Get a Passport!
Use a Vision Board
10 Questions to Ask About Retirement from US News
