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Happy New Year!
What do we do every New Year? We make resolutions. Yay! Let’s do it again!
Why do we humans repeat this oddball ritual each year? Well, for self-improvement of course. If you want to be well-read, you can read a book every month. If you want to be more worldly, you can travel more. You can save money, take classes, find a partner, lose weight, stop smoking, donate more time, organize your closet, or be a kinder and gentler spouse.
Sometimes our resolve stands firm for months, sometimes a few hours. On rare occasions, resolutions last forever. That’s when they matter most.
Think back to prior years. Did you make resolutions that you’re still keeping today? I have a few and I’m sure you do too. Successful resolutions turn into positive habits that turn into lifestyle changes that benefit you, and people around you – now and into the future.
In 1988 I resolved to overcome my fear of public speaking, and I did. To this day I’m comfortable and confident when speaking to groups.
In 1995 I resolved to take up cycling, and I still ride often. It’s a boost to my physical and mental state.
For 2021, I have three great resolutions for you, no matter your age. Three easy resolutions that will change your life right now, and at the same time set you up for an outstanding retirement, whenever that may be.
Invest in yourself
Half of all retirees are satisfied with their lives. The other half are not. What’s the difference? Hint: It’s not money.
I’m talking about investing in yourself and developing traits like satisfaction and confidence. It’s not how long you live, or how big your house is. It’s how well you live, and how happy you are. And the best part is, you get to decide what “happiness” is.
An outstanding retirement is one that you, and you alone, believe to be happy.
Just like $100 invested at age 20 grows to $2,300 at age 65, a small investment in yourself today can grow into a wildly happy future. Small, simple resolutions today will pay off tomorrow, next year, next decade, and throughout your entire life.
Three pillars of an outstanding retirement
There are three powerful pillars that work together to deliver an outstanding life in retirement.
- Health: Being as active as you can be, given your age and personal/genetic circumstances.
- Security: The confidence in knowing you’ve carefully guarded against physical and financial threats.
- Happiness: The feeling of satisfaction from being free of fear and anxiety over an uncertain future. The state of being in control of your life.
Health is the gift of meaningful time. Security gives you the untethered freedom to pursue your dreams. Happiness is the frosting.
Your three New Year’s resolutions align with these pillars. They’re not a panacea or all-encompassing. You’ll have more next year and the year after, but they’re a simple start, and they’re fun!
Try them.
Resolution #1 – Health: “I resolve to move more each day.”
Science has proven repeatedly that active people are healthier and live longer. But more important is they’re able to remain active later in life, increasing the value of their years. It’s one thing to live to 100 while lying emaciated in a nursing home bed. It’s another to live to 90 and die while jumping the wake on water skis.
Other than kicking the smoking habit, the simple act of moving around is the best thing you can do for your health.
Here’s how you’ll be healthy:
- When you’re out, pick a parking spot that’s NOT the closest to the door. The further the better.
- Commit to a vigorous walk at least three days a week. Pick a time and distance that fits your schedule and your ability. Distance is less important that consistency.
You can probably do more – which is fine. I have a friend named Greg who has been an ultramarathon runner his whole life and at age 62 still runs 50- and 100-mile distances. I don’t recommend that for everybody, but it shows you can push your limits.
There are millions of physical activities you can do, but don’t get caught up in a lot of complexity. You don’t need a gym membership or a water ski boat to stay healthy, you only need to move.
It’s free, easy, and fun.
Resolution #2: “I will increase my savings.”
I told you above that over 45 years, a single investment of $100 grows to $2,300. Did you know that if you put aside just $1 a day over that same period, you’ll have $115,000?
It’s not an illusion, it’s the rule of compounding investments and interest over time. Starting young is best, but no matter how close you are to retirement, you can benefit from increasing your savings rate now.
Here’s how you’ll save:
- Automate it and ignore it! Adjust your 401k at work up by 1%. You’ll never notice it. If you don’t have that option, set up an investment account to automatically transfer a small amount from your bank account each payday. Do it once and forget about it.
When you automate savings, you learn to live on less (a very good lesson indeed), and you gain from the compounding of interest. Here’s what you end up with:
Your growth will probably be even better. This example doesn’t include salary increases and assumes 7% investment growth. Salary increases and higher returns would skyrocket your savings.
When you know you have enough money to live comfortably in retirement, you are financially secure and in control. Money is among the top worries of retirees, and without that concern, you have all the time in the world to be happy.
Next year, turn it up a notch.
Resolution #3: “I will practice being retired”
I started doing this two years ago, and it’s turned out to be one of the best resolutions I’ve ever made. Each morning I pretend I’m retired, and briefly ponder my day as if I were. I would go hiking or cycling or start a new book. I might plan something special for dinner or book a night at the opera. I wouldn’t actually do any of this of course (I hate the opera), but it’s the mental exercise that makes this work.
Why does this help? It’s a visualization and reinforcement exercise. Visualizations are proven to help people replace uncertainty with confidence. It reinforces behavior until it becomes a habit.
People are nervous about retirement, not knowing what it’s like on the “other side.”
They say: What if I’m not ready?” “What if I don’t have enough money?” “Will I be bored?” “Will I be happy?”
A friend of mine named Tony retired at age 63 without a plan. He sat on the couch watching TV for 9 months until he couldn’t stand it anymore. He went back to his old job.
If he had practiced being retired, he would have had a thousand ideas of what to do. His days would be full and rewarding.
Here’s how you’ll practice:
- Write yourself a note and post it on your bathroom mirror or your computer monitor.
- Take a moment when you see it to think about what your day would be like if you were retired. Ponder the thought while in the shower or when your computer is booting up. One minute is plenty.
You can’t be good at waterskiing or public speaking without practice. What makes you think you’ll be good at retirement without it?
So, practice. Be retired!
Best wishes for the New Year!
It’s not hard for 2021 to top 2020, but with these simple resolutions, it may be one of your best years ever.
Remember to:
- Move vigorously at least 3 times a week – for a long and meaningful life
- Turn the savings up 1% or more – for financial security and control
- Practice retirement each morning – for confidence and happiness
If you’re young, your future is bright when you take control of your life. Small changes now will be fun right away, and they’ll also lead to enormous benefits later.
No matter if you’re young or old, there’s no better time to take control of your life than right now. Don’t forget that you get to decide what “happiness” is.
Be healthy, secure, and happy – your life and retirement will be outstanding!