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November 6, 2019 by intrinsic 0 Comments

Retirement Income Realities & Solutions

Retirement Income Realities & Solutions 1

The goal of traditional retirement planning has been to build a “nest egg” of personal savings and investments that will supplement Social Security and pension benefits.  Together, these three sources of retirement income have long been referred to as the proverbial “three legged stool”—a solid and well-balanced foundation for building financial security in old age.

However, Social Security benefits are less generous than they once were, and the solvency of future benefits is in question.  In addition, employers are also reducing retirement benefits and switching to pension plans that transfer accountability for investment selection and performance to employees.  Because these two legs of the retirement income stool are shrinking, more responsibility for financial security has shifted to personal savings and investments.  Nevertheless, for most pre-retirees, this third leg of the retirement income stool is seriously under funded as well.

Generational Viewpoints

What Is “Retirement? In an extensive report based on a 2019 survey conducted by the Transamerica Center for Retirement Studies.  It explores the meaning of retirement and examines the attitudes and behaviors of three generations currently represented in the workforce:

Baby Boomer:  Born 1946–1964

Generation X:  Born 1965–1978

Millennial:         Born 1979–2000

Due to the evolution of the retirement landscape, workers of all ages are increasingly expected to self-fund a greater portion of their retirement income.  In addition, they are expected to manage their own investments and associated risks.  However, across generations, only 20 percent “strongly agree” and 34 percent “somewhat agree” that they are building a large enough retirement nest egg.

In terms of “greatest financial priority right now,” the percentage of workers who cited “saving for retirement” increased significantly with age: Millennials (9 percent), Generation X (24 percent), and Baby Boomers (38 percent).  In addition, Millennials (the youngest cohort surveyed) also cited a cluster of competing financial priorities including “cover basic living expenses” (19 percent), “build savings” (17 percent), “pay off credit card debt” (16 percent), and “support children” (15 percent).

The authors of the study also cited “infrequency of conversations about retirement” as a major concern.  They described this major life transition as “a family matter that calls for important conversations.”  In fact, nearly one-third of Generation X (31 percent) and Baby Boomers (32 percent) reported “never” discussing the topic.  Surprisingly, it was Millennials (21 percent) who were most likely to report “frequently” discussing savings, investing, and planning for retirement with family and friends.

A New Solution for a New Age

Workers of all ages need a new framework to guide their preparation for this stage of life.  To add stability to the retirement income stool, this new model proposes adding a fourth leg comprised of income and benefits derived from post-retirement work.  In this scenario, “retirees” will likely follow one or more of the following paths:

  • Work longer and delay full retirement
  • Work part-time or part-year
  • Transition into new careers
  • Phase out of current position rather than make an abrupt departure.

In addition to extra income, post-retirement work also provides non-financial benefits that most adults find liberating and compelling.  That is because a growing majority don’t view retirement as a respite from work, but rather as an opportunity to explore new arenas, stretch their comfort zones, and engage in purposeful activities that contribute to their own life satisfaction and the well-being of others.

It Takes More than Money

In the past, the transition to retirement has been viewed solely as an economic event.  As a result, the focus of retirement planning has always been on building a nest egg.  In The Late-Start Investor, author John Wasik recommends discarding this obsolete view in favor of a “flexible life plan that provides for financial, vocational, physical, emotional, and spiritual needs.”  He explains, “Unless you look at your future holistically, merely saving up a pile of money will be a meaningless act.”

Of course, financial security is extremely important, but wise retirement preparation emphasizes that financial planning alone will not guarantee a rich and rewarding life.  In The Millionaire Mind, Thomas J. Stanley points out that the most satisfied wealthy people don’t just have financial goals, they also have life goals.  In other words, they have clarity around what they want in life and use their wealth as a tool to support those values and priorities.

Therefore, the most important message to remember as you prepare for retirement is this: “It takes more than money.”  Make sure that you not only consider how the transition to retirement will affect your life financially, but how it will influence all other areas of your life as well.

Reprinted by permission of Money Quotient, NP

The Purpose Of “Work” In The Second Half Of Life

The Purpose Of “Work” In The Second Half Of Life 2

Individuals in mid-life and beyond are increasingly viewing retirement not as a time to relax, but as a time to explore their potential.  It was Abraham Maslow, a psychologist, who gave us the term, “self actualization.”  He called it man’s desire for fulfillment, “to become everything that one is capable of becoming.”

For many, the path to self-actualization is through their “work”—which should be defined as the productive activities, paid or unpaid, that gives their lives meaning and a sense of purpose.  Helen Harkness wrote that linking work to the need for meaning has been a natural evolution:

“For the generation following the Depression and World War II, a ‘job—stable lifetime work that pays the bills—was the goal.  Later, the achievers focused on a ‘career’ in a particular profession such as law, banking, medicine, teaching, or management as the means to success.  Today we are adding another dimension: discovering our ‘calling’ or ‘vocation’—work with a deeper purpose or meaning, assuring us that each has something unique to offer.”

This new view of the purpose of “work” is particularly important to the millions of Baby Boomers who are approaching or living in the second half of their lives.  A number of surveys have shown that the majority of Baby Boomers plan to work beyond the time they are eligible to retire.  In Encore: Finding Work that Matters in the Second Half of Life, contributing author Ed Speedling wrote:

“Many individuals feel compelled to work for financial or psychological or social reasons, or for all three, yet they want to choose how they work and what they work for.  Instead of liberation from labor entirely, they see an extra measure of freedom—in many cases to swap money for meaning, to do work that they couldnt afford to do earlier but can do now that children have grown and other ambitions have waned.”

Similarly, in her book I Could Do Anything if I Only Knew What it Was, Barbara Sher explained that the first step to finding work that “fits” is to understand the connection between doing what we love and doing something worth doing.

She wrote that it is at this intersection that we will find meaning.  In fact, because self- actualization is at the very pinnacle of the hierarchy of needs, Barb Sher reminds us all of how lucky we are to live in a free and prosperous society:  “It is a tribute to the success of our culture that so many of us have the freedom to search for our own life’s work.”

Reprinted by permission of Money Quotient, NP

December 4, 2018 by intrinsic 0 Comments

Retirement Expectations

Retirement Expectations 3

Retirement will trigger changes in every area of your life.  As you anticipate and prepare for this stage of life, you are likely to look forward to certain changes and to dread others.

In fact, it is not uncommon for individuals to experience many ambivalent feelings towards retirement because of the significant transitions they anticipate.

For example, many express that they are eager to leave the workforce, but nevertheless are concerned they will miss the structure of the workday and interaction with colleagues. In addition, most people closely identify who they are as individuals with their job titles or what they “do for a living.”  Therefore, they are likely to feel less significant when they step out of those roles.

Furthermore, spouses or partners can feel a tremendous strain as they adjust to more togetherness and to a new economic status.  As one woman related, “I define retirement as twice as much husband and half as much income!”

Both research and experience have shown that overcoming challenges and taking advantage of opportunities are key elements to making successful transitions in retirement. Therefore, it is important to learn ways to cope with change in healthier and more productive ways.

William Bridges, author and preeminent authority on managing change, defines transition as the psychological process people go through to come to terms with a new situation. Similarly, in the world of music, the “passing note” is a note that is not part of a particular chord, but placed between two chords to provide a smooth melodic transition from one to the other.

As you prepare for the many transitions you will experience in retirement, seek ways that you can orchestrate the important “passing notes” in your own life.

To accomplish this goal, it is important to view retirement not as a respite from work, but as an opportunity to explore new arenas, stretch your comfort zones, and find unique ways to fulfill your potential.

Reprinted by permission of Money Quotient, NP

September 21, 2018 by intrinsic 0 Comments

Ambivalent Feelings About Retirement

Ambivalent Feelings About Retirement 4

Retirement will trigger changes in every area of your life.  As you anticipate and prepare for this stage of life, you are likely to look forward to certain changes and to dread others.

In fact, it is not uncommon for individuals to experience many ambivalent feelings about retirement because of the significant transitions they anticipate.

For example, many express that they are eager to leave the workforce, but nevertheless are concerned they will miss the structure of the workday and interaction with colleagues. In addition, most people closely identify who they are as individuals with their job titles or what they “do for a living.”  Therefore, they are likely to feel less significant when they step out of those roles.

Furthermore, spouses or partners can feel a tremendous strain as they adjust to more togetherness and to a new economic status.  As one woman related, “I define retirement as twice as much husband and half as much income!”

Both research and experience have shown that overcoming challenges and taking advantage of opportunities are key elements to making successful transitions in retirement.  Therefore, it is important to learn ways to cope with change in healthier and more productive ways.

William Bridges, author and preeminent authority on managing change, defines transition as the psychological process people go through to come to terms with a new situation. Similarly, in the world of music, the “passing note” is a note that is not part of a particular chord, but placed between two chords to provide a smooth melodic transition from one to the other.  As you prepare for the many transitions you will experience in retirement, seek ways that you can orchestrate the important “passing notes” in your own life.

To accomplish this goal, it is important to view retirement not as a respite from work, but as an opportunity to explore new arenas, stretch your comfort zones, and find unique ways to fulfill your potential.

 

Reprinted by permission of Money Quotient, NP

 

 

September 13, 2018 by intrinsic 0 Comments

Successful Aging Requires “Whole Life” Planning

Successful Aging Requires “Whole Life” Planning 5

We often equate preparing for old age with achieving the financial security needed to sustain us throughout life.  However, a truly successful and fulfilling aging experience requires planning and preparation in all areas of life.

Financial planning is indeed important, but money alone cannot “buy” happiness, good health, meaningful relationships, and purposeful activities.  In The Late-Start Investor, John Wasik wrote:

“Instead of absorbing an obsolete view of retirement, you should consider what I call your New Prosperity.  This includes a flexible life plan that provides for your financial, vocational, physical, emotional, and spiritual needs.  Unless you look at your future holistically, merely saving up a pile of money will be a meaningless act.”

Invest in Nine Facets of Life

The key to successful aging is acknowledging the impact of choices made today on your life in the future. Therefore, it is important to seek growth and development—throughout adulthood and old age—in each of the following Nine Facets of Life:

  • Intellectual Engagement – Includes activities and educational opportunities that facilitate lifelong learning; stimulate thinking and curiosity; and increase understanding, knowledge, skills, and mental acuity.
  • Purposeful Pursuits – Includes productive activities that are considered to be one’s “work,” whether paid or unpaid, and provide a sense of meaning and contribution.
  • Leisure & Recreation – Includes activities for personal enjoyment and for refreshing the body, mind, and spirit.
  • Healthcare & Physical Fitness – Includes appropriate medical and self-care, good nutrition, and regular exercise.
  • Close Relationships – Includes one’s inner circle of family members, friends, and colleagues.
  • Community & Social Relationships – Includes formal and informal networks, gatherings, associations, and affiliations that provide a sense of belonging and opportunities for social interaction and contribution.
  • Home & Location – Includes type of housing, ambience of living space, and geographic location that meets physical needs and nurtures one’s mind and spirit.
  • Inner Growth – Includes commitment to emotional well-being, personal and spiritual growth, and an ever increasing sense of self-actualization.
  • Financial Well-Being – Includes basic financial knowledge, sound financial practices, and a growing understanding of beliefs and attitudes that influence financial behaviors.

Visualize Your Life in the Future

There is a lot of truth to the old saying, “if you don’t know where you are going, any road will take you there.”  In contrast, as you plan for old age, it is important to envision and articulate the various elements you want to include in your “whole life” portfolio.

A good approach is to first picture yourself at different ages and in each of the Nine Facets of Life. In this process, it is especially helpful to think of your future in 5-10 year increments.

Take time to visualize what you would like to have, do, see, feel, and experience in all of these areas. In particular, consider how you will define quality of life and how your aging process will affect every component of your personal well-being.

Draw a picture in your mind of the life you want to have and then continue to build on those images. Whatever you identify and claim for yourself will become the internal compass of your life by consciously and subconsciously guiding all of the big and little decisions you make on a daily basis.

Commit to a Positive Outlook

It is not uncommon for individuals to avoid thinking about growing old because it conjures up feelings of dread and anxiety as well as images of inactivity, sadness, and decline. The truth is, however, that life can remain rich, satisfying, and meaningful throughout one’s life.

Each life stage offers challenges, but incredible rewards as well.  This perspective will not only help you to keep a positive outlook, but will also guide you in creating an aging experience that is rich and rewarding.

 

Reprinted by permission of Money Quotient, NP

 

 

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Tustin, CA 92782

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