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Retirement Planning Should Not Start With Money
By Don Seibert
Everywhere you look and everyone who you talk to about retirement all seem to be focused on the financial issues. Have I saved enough to live my dream retirement lifestyle? When should I start taking my Social Security, at age 62 or 65 or 70? What percentage of my current expenses should I expect to have in retirement?
I think that focusing on the financial aspects first is like looking in the wrong end of a telescope! There is a whole lot more to 'retirement' than just the finances. Surely, they are important, but not all consuming.
As we progress through our careers, I believe that most of us have an idea when we would like to be able to scale back on the work and begin what is called our 'retirement years'. Most of us devote 90,000 working hours in our career earning toward the dream 'retirement' but less than a few hours actually planning it.
Before we get too far down the road of discussing retirement finances, it would be good to plan what, to us, is a dream lifestyle to have in your later years. This may come as a surprise to some, but most people really need something to keep them active, their mind and body functioning, and their attention focused.
I retired once when I was just 52 years old and, after the novelty of not having to get up by a certain time each morning wore off, I became very bored. I then took up golf and found that everybody my age or younger was far more experienced and better golfers than I was and I just didn't enjoy losing every day.
My wife and I then purchased a marina on the lake where we built our new 'dream home'. That turned out to be a huge and very expensive mistake. You see, I got into the marina business for all of the wrong reasons but mostly because I was bored and have always like boats. I have never worked so hard for so little income in my life! It then took us almost 7 years to sell the marina and return to being retired.
I learned the hard way to retire "to" something, not 'from' something. You need to always be looking forward. Luckily, I was able to get out of the marina and back into retirement with our savings intact, but this time we have a very specific plan about what we expect from retirement.
A 'perfect retirement lifestyle' is entirely different from person to person. Each of us has an idea in our minds what we want to do, where we want to live, what activities will be important to us, etc. Unless you are completely destitute, you should be able to plan a retirement that will be somewhat affordable for you and your spouse. Until you have planned the "who, What, Where, When, Why and How" of retirement, there is no way that we can estimate what our living expenses are likely to be!
It all must start with your plan. Once you have those big questions answered, then you can more realistically estimate what level of income will be necessary to support your planned lifestyle. Then, when you have an estimated budget in mind, you can take a look at your expected income form Social Security, pensions, annuities and the income from your nest egg investment. Hopefully, the expected retirement income is larger than the budgeted expenses of your planned lifestyle.
If you arrive at an income shortfall (as many or most people do), you have a couple of options. Obviously, you can go back to the planning stage, lower your sights a little and redo your expense budget. Or, you may just include some other source(s) of income to get your retirement budget to work out. This might mean taking a part time job, increasing the risk of your investments to provide more income (this would be very risky!), finding other sources of income, or postponing your retirement until you have saved more.
Do not neglect to explore the possibility of earning enough passive income on the internet to cover the income shortfall. There are many ways that you can earn from $1,000 to $3,000 per month from various internet marketing activities. Most of these require some time and effort to learn, but can be accomplished by most people. There are many resources available on the internet, including our own, that stand ready to help you learn these skills. Beware of the internet gurus who will try to sell you a magic program to earn how to make money. You should not get involved in any program that requires you to pay more than a few dollars until you have cash coming into your account. If a solution sounds too good to be true, it probably is!
The process of re-doing your budget estimates is called regression. You just keep on planning, cutting, adding income sources, etc until you arrive at a retirement budget that you are comfortable with.
Please work with your spouse to devote adequate time to planning as many aspects of your dream retirement and put them on paper. Do this before diving too deeply into retirement finance. The results will amaze you!
Resources:Don Seibert is a retired business executive who, as an Expert Author, writes timely articles on many issues concerning sources of retirement income Having retired three times, he now is the host of http://www.RetireToEasyStreet.com Visit the site for a complete discussion of Retirement Income Options
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