Thursday, March 9, 2017

Crash Landing in Retirement

They say that any landing you walk away from is a good landing.  However in retirement, crash landing is not necessarily the most optimal outcome.

I have received emails for readers who criticize me for focusing so much on retirement in my blog. But of course, since I am retired, it is pretty much the focus of my blog.  Even when I started this blog, I was only a few years away from retirement, which is one reason I started it - I realized that the money train was about to stop, and I had better have a place to land, if that isn't torturing mixed metaphors too much.

One reader opined that worrying so much about a small portion of your life is rather foolish as you can bypass enjoyment of life worrying about the future.  And there is a nugget of truth in this.  I am not advocating giving up on life in order to plan for some far-off future they may never occur.  But neither is it smart too avoid planning for a future that most likely will occur.

Moreover, if you think about it, your retirement years could comprise nearly half of your life.  And thus, it would pay to sort of plan for what could be half of your life.  It is entirely possible that you may retire in your mid-fifties and may live to be close to a hundred, and thus retirement may encompass a major portion of your existence.  Far from being some far-flung far off possible hypothetical scenario, it is going to comprise a major portion of your time here on planet earth.

[UPDATE:  My Father recently passed away at age 95.  He was forced out of his job at age 55.  Retirement wasn't some "end game" in "God's waiting room" but more than 40% of his life - forty long years, where he needed financial security because he had no means of earning income.]

If you think of it, the first 20 years or so of your life are spent living with your family, dependent upon them for your daily needs, your education and so forth.  Thus, your economic needs are really provided for for the first two decades of her life, or hopefully they are, if you're lucky.

So you graduate from college and get that first job and start a career - again if you're lucky, these days.  Or smart.  Your career may last 30 to 40 years at most.  Sure, there are people like Frank Lloyd Wright who worked well into his seventies, or authors who are still churning out books even into their nineties.  But those are the exceptions to the rule, not the norm.

Most of us find our working lives winding down in our fifties and sixties, a mere 30 years from the day we first reported for work.  So, if you think about it, your working life may be one of the smaller parts of your existence.  You spend 20 years growing up and learning how to be a human being and learning some skills.  You then spend 30 years working at those skills.  Then, you spend thirty or forty years enjoying the fruits of your labor - again if you're lucky.  Or smart.

So is planning for retirement all that stupid?   It arguably is the largest single portion of your life, and could be the best portion, if you plan properly.

Unfortunately, most people don't take this view - this long view - of life. They view their working career as the centerpiece of their life and their childhood and their retirement has two bookends that frame their existence. And neither of these bookends, in their minds, is significant.  This strikes me as odd considering how much people obsess about their childhoods.  And quite frankly, once you retire, it is like "school's out" and all that stuff you did while working means absolutely nothing - nothing at all.   Particularly today, where technology means that almost everything you ever worked on is in the dumpster in five years.

The reality is, for most of us, your working life is something that exists to fund your own children's upbringing, and your own retirement in the end. And both of these things could be quite expensive to fund.  To not plan for these things is somewhat scandalous.

So, when a reader tells me that he would rather buy a Ferrari today than plan for tomorrow, I think he's being somewhat shortsighted.  And perhaps his children will think that when they find that their college fund amounts to a big goose egg.  And they may be even more annoyed when their Dad, when retired, starts bugging them for money like some sort of homeless bum.

And you may think I'm kidding on this last part, but it is becoming a new trend - older people who are retired but have little in the way of income and often have to rely on their children for survival. Young people, just starting out and trying to form their own family find that they are also burdened by their childhood family hitting them up for cash on a regular basis.

So it pays to be prepared. It is better to land in retirement at a planned location and time then to crash-land at an unexpected place and at an unexpected time.  However, most people do the latter.

It is a good idea when you are in your forties or even thirties to sit down with your spouse and discuss what your future plans will be.  For many people pressured by the needs of the immediate, this seems like a far off thing that you can put off for a later date.  The kids need new shoes, so to speak, and that takes precedence over the future.

Sadly, many businesses plan this way as well.

There is no need to commit to a particular plan of action, but you should keep your mind open and eyes open for possibilities down the road.  When you travel, think about different places you go to and whether they would make good retirement possibilities.  Or whether you could possibly retire where you are right now - although most places where you work are more expensive to live in as a retiree.

The point is, to have some options in mind so that when retirement comes - and it is often thrust upon us rather than planned - you have an idea of where to go and what to do.  It is better to have choices and make choices than to have choices made for you.

Choosing where and when you want to retire may be one of the last choices you make in life.  Because the next choice you make may be made for you. You may reach an age where you no longer able to care for yourself or understand what's going on in the world, and your children or other guardians may have to decide where you should live and how you should live.  And in that regard it's a good idea to be in a good place where there are options for people no longer able to care for themselves.

Think about these things.  Make some preliminary plans.  Have an idea of what you want to do. Because all of that is better than having no idea, no plans, and no options.

In our travels, we see examples of people who end up crash-landing in retirement.  They end up living in a dilapidated RV or in the rundown trailer not because they wanted to, but that is where they ended up.  They decided that living for the moment was more important than planning for the future, and ended up screwing themselves in the process.

And it is not as though they are enduring this misery for just a year or two before they finally expire, but rather for a decade or more, sometimes decades.