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A great deal of information about “retiring” is available to anyone who wants to read or ask questions or get coached. But the actual transition is a bit of a mystery to most people! Especially anyone who has never done it before. I have always marveled at coaches who want to teach people how to retire but are not retired and have not been there themselves.
First, retirement is as much a state of mind as it is anything else. It may be the first time in our lives that we can control most of what we do and the time we take to do it! Control of your time is, in my opinion, a great blessing of life. But getting there and creating time, so it works for you is a mystery for many.
Psychologists estimate that 40% of us have trouble with this transition. Why? One possible explanation is that we spent about 40 years of our lives focused on “work.” We were educated for it, trained for it. Then all at once, our work life is gone the way of the dodo! Part of our identity is gone too. Hence the struggle, awkward transition, and an excess of time weighing down on us after the euphoria of freedom has left.
So how do we find these “best years of our lives?” In a word: planning! It amazes me the effort we put into planning education, planning vacations, finances, or anything else that merits our interest, but not our lives. Today our retirement years measure potentially 20% to 30% of our total time. Yet we just “kind of step into” our last 20-30 years!
Most people worry about money without even knowing what they want. The truth is that the money, effectively managed in retirement—not something most financial advisors understand or are trained for—is the least of our problems. Contrary to the published reports, you don’t need half of what the financial industry says you need. Knowing ourselves and creating a life we would enjoy living—that is the obstacle. Find that, and the money falls into place most of the time. Although we learn to the contrary, money is not life.
What makes up our Second Act?
After an initial failure at retiring, I admit that I read, studied, and created a website around this topic. What I found is that this transition, done successfully, for most of us, takes effort. We spend 16 years getting educated and a decade or so getting trained in our chosen field. Why not spend a little time learning what we want from the last part of our lives?
We are complicated beings.
We think, we have a soul; we have a body that shows the effects of our years of efforts on the job, a spiritual base, we have familial and societal relationships, clubs, sports, likes, dislikes, things we want to do and do not want to do. How often do we take the time to look carefully at who we are, examine what we believe, what is essential, fun, and productive? For many of us, the answer is rarely.
One of my favorite philosophers, Cicero, said:
“It is not by muscle, speed or physical dexterity, that great things are achieved,
-Cicero
But by reflection, force of character and judgment.
In these things old age is not poorer,
But it is even richer!”
The process of aging creates great value that most of us fail to see!
My initial failure at retirement, and my subsequent cancer treatment, was the impetus for two trips taken alone. These trips gave me six weeks of uninterrupted, controllable time to myself. In that time, six years before I retired, I realized I wanted to write and learn photography. I didn’t know how I would do this, but I had spent the time to unwrap myself and discover what I wanted. The internal parts of my retirement process had fallen into place.
KEY #1 to Retiring Successfully: The Internal Drivers
The quiet, undistracted time and space to think and plan the first three internal drivers of a successful retirement.
- Who we are,
- What we want and enjoy spending our time doing,
- How we will be productive.
These three parts create the impetus for your future. I have counseled and helped hundreds of people to develop a financial retirement*. It was only in the last decade, working on my transition of life, that I realized my clients who were happiest in retirement were those that significantly changed their lives. Some by accident, but most who were successful, succeeded because they planned it.
Two of my favorite clients were people with basic educations. She was an accounts receivable clerk, and he drove a truck. They could not wait to “get out.” Did they move? No! They had worked hard on having no debt and no mortgage. I asked them both what made them happy and what they would do when they “got out?” You would have thought a dam was overflowing at the flood of words and smiles that came from both of them.
She wanted to garden, can her veggies, help feed people through her church, and remodel their bathroom and kitchen. He wanted to work in his workshop, fixing engines and small appliances, weld, and help his wife remodel. Together they would travel every summer and fall to parts of the US, Canada, and Mexico and visit their grandchildren. She said that giving back, working the soil, remodeling their home, and traveling would give them both great joy and purpose.
The day of our next-to-last meeting, close to their separation from work, when I reviewed their budget, showed them the changes to their investments necessary for retirement and how they had under almost any circumstances adequate income with Social Security. She cried for ten minutes before I could convince her this was all true! They were so aware of what they wanted for the remainder of their lives that they feared the only obstacle they saw—money.
Key #2 to a Successful Retirement: The External Housing
Your next key is planning the five areas that allow the expansion and growth of Key #1.
- Slowing down. Much of our lives amount to running from one thing to the next: home to dry cleaners to work, meetings, home to dinner to bed: it is endless. Slowing down creates much joy and a new sense of what living is.
- Right-sizing. We are great collectors of stuff. America has more storage units than any other country in the world. To what end? If you were to get rid of anything you haven’t used or seen in a year, you would be amazed at its effect on your life. STUFF has a psychic weight that we carry with us.
- Health. It is unfortunate, but our health takes a back-burner to things much less important in our lives. “If you don’t have your health, what have you got?” We need to pay greater attention to our weight, ability to move, and essential eating habits. If we don’t eat less as we slow down, we create problems in retirement we don’t need! Yet, I have discovered that when it comes to food, “less is more.” How do I know? Over the last year and a half, I have lost 50 lbs, eating Italian food!
- Moving (or not). Have you thought about the cost of the tax liability you have in the state in which you live? We moved out of a state with Gross Receipts (business) Tax, food tax, sales tax, real estate tax, and a separate income tax to a State with only RE taxes, and we no longer live there, so the RE taxes don’t affect us: where you live affects your life!
- Financial management. After four decades in the financial services industry, I learned more in the last five years than in the first thirty-five. We manage the money of our retirees almost universally poorly. Advisors: not knowing any better give you too much risk (I know how to fix that now.) and too much expense – this is fixable too! And you do not earn enough from what you have. Income is repairable. For the most part, we buy products that are too expensive, too risky and benefit other people (read Wall Street) more than they help us!
So often, ‘life coaches’ give you a description of video lessons, homework, personal coaching, and in-depth discussions without disclosing the critical parts of how and what you learn. For this change of life, our adjustments differ for each person. It is the rigor of having done it, of having failed, and finally of having succeeded, that created this process: not a book or a class or an online course.
What fascinates me most is that my exploration of the finances led me down a path that made the finances less essential and the needs of the individual more important!
Putting the eight parts of a successful retirement together and planning them is the key to a fulfilling life after work.
How I do this with my clients are simple writing exercises and video calls—exploring ideas, thoughts, and experiences we enjoyed but left behind or just never started. We work together to identify what makes us happy, opening space for new efforts and new thoughts.
All of this and taking a hard look at our costs of living and how we might lower them if need be is a step-by-step process that it took me a decade to define and create for myself and those who have an interest. Even after thirty years as a Certified Financial Planner who had managed over $100 million, the last five years of work and creating the process of retiring changed much of what I thought I knew.
You can do this on your own as a DIY Course, work with me, work in a group with me, or maybe even come to Italy for a hands-on practice retirement camp.
Why do I believe this approach is the best?
First, unlike most “life coaching processes,” our process focuses on you (retiree) as the internal drive and then on the external parts of living. Second, it is driven by creating a life for retirement. It is driven by your inner desires, often not available to us due to the external pressures we tend to allow to shape us. One of the great pleasures I realized myself was the process of writing down what I believed. It was as though I met myself for the first time! Try it! Ask yourself this question: “What is my knowledge?”
Once the internal foundation of who we are and what we want is complete, the outer five sections of your “retirement” house can be built.
Seldom does a complete course cover right-sizing, as we don’t like letting go! But the process of letting go allows for even greater possession. Other courses might include slowing down, but not usually moving or rediscovering our health, making our finances safer, less expensive, and more consistent. The fullness of this process will allow you to have the best time of your life! As always, our process, any process, is not the essential part.
The Most Important Part is YOU!
How often have you tried to create “your perfect life?” If I may hazard a guess: not very often, if ever? Until I started this process, I had never even thought about it.
Is having the best time of your life when you leave work something you desire? How much would you sacrifice in time and effort to create this life of joy and happiness? How much would you give up to have “your best life?” The sacrifice of your time and your effort is in direct proportion to the life you create! The greater the sacrifice, the greater the reward.
The book “Outliers” by Malcomb Gladwell describes a journey of 10,000 hours necessary to master a skill. That kind of effort creates a business Microsoft (Bill Gates), or an Athlete (Jordan Spieth), or a Billionaire (Warren Buffett).
I am not suggesting this takes 10,000 hours, hardly! But over the last dozen years, I and closing in on that kind of effort, time, reading, and research in creating this, and STILL: YOU are the essential part of the equation.
Whether you do this yourself, with someone else, or with me: here in Italy or sitting at home in your living room, you are the bottom line. However skilled, however trained or gifted, no coach can give you the desire to create a better world for yourself. Only you can do that! Recorded videos, in-depth workbooks, financial reviews, and expert coaching have no value unless you have a heart for the outcome.
I wish you well. I wish you success, and I wish you a wonderful life in retirement.
A.W. Chip Stites, Retired CFP®
Writer, Retirement & Financial Counselor
thelaughingretirement.com
*We are taught by advertising and Wall Street and hordes of Financial Advisors that the most important part of retiring is how much money we have, as though money makes life work. Not true. My experience has been quite the opposite: The more planning one does about how, where, and why one wants to live and how they want to create value, the less important money is. The “money” seems to fall into place when everything else is correct! For example, we moved to Central Italy because we wanted to travel, and we did not have the money. We live in Italy on less than half the cost of living in the US. We travel for a tenth of the average price of visiting Europe. Many people do not want to move, and that is fine. Usually, there are enough possibilities available to create the life you want, where you want! It would be best to explore them and have an experienced ‘coach’ who has already done it.