The traditional view of retirement — working for the same company your entire career and then retiring to draw a lifetime pension — is a thing of the past. Yes, some government workers continue to retire with paid pension plans, but as states and municipalities continue to fight for survival, these pension plans will also be phased out. To add to the angst, Social Security is scheduled to run out of money within the next 25 years.
The bottom line is that many, many of our upcoming retirees are in trouble. The average baby boomer has less than $100,000 set aside for retirement and, according to Financial Planning magazine, 56% of those nearing retirement age have no idea how much income they will have in their retirement years. Because they have no personal finance plan, the time to wake up is now.
“But Joe", you stammer. “It is too late for me to do anything now. I have waited too long."
“Wrong! You just need to redefine your retirement. These tips will help."
1) Learn where you stand.
Whether you run the numbers yourself or get some help from a financial counselor, you need to know the truth. Answer these questions: “If nothing changes, what will my retirement income be?" and “How does this compare to my current standard of living?"
2) Budget accordingly.
Based on what you learned, make the appropriate changes now. Make those sacrifices today, while you have a choice, because some day you won’t have that choice.
3) Pay off your house.
Think of it this way: getting that house paid off will bump your retirement cash flow by whatever payment you are currently making. Besides, having your home paid for in your retirement years will give you a security you wouldn’t have otherwise.
4) Invest in your health.
No matter how fit you are financially, your retirement will be dampened if you lose your health. Our local community college offers exercise curriculums, with all of the equipment and a trainer for only $30 a semester. The time to invest in your health, regardless of your age, is now.
5) Don’t retire.
One way to redefine your retirement is to change that definition from one of lazing around for the last 20 or 30 years of your life to one of staying active and productive. Ask yourself, “What dreams have I left undone?" If you do what you love to do, you won’t want to quit doing it…ever! Fulfill that passion and your later years will be full of wonder and meaning.
To close this post, I challenge you to allow some of these seniors inspire you to redefine your retirement:
- Olive Riley: began blogging at age 107, and continued until two weeks before her death at age 108.
- Pierre Jean “Buster" Martin: Claims to be the United Kingdom’s oldest employee at the age of 102, and notably refused to take a day off on the day he celebrated his 100th birthday. Martin entered the 2008 London Marathon and, according to press reports, he walked the 26 mile course in approximately 10 hours.
- Arthur Winston was a Los Angeles Metro employee for 72 years. He is best known for being honored as the “Employee of the Century" because he was never late to work and only took one day off during his entire career.
- Ron Donahue (72), Norm Benson (77) and George Nesbitt (80), who volunteer their carpenter skills to make school desks for special needs children. (See picture at beginning of post).
Maybe you won’t run a marathon or work for one company 72 years, but you CAN live life to the fullest for all of your life.
Doing so will redefine your retirement.
Readers: In what ways do you need to redefine your retirement? What changes do you need to be making today?