Opinion: Much of retirement planning is wishful thinking – what I learned after 3 years in retirement
It ended up being one of the most read things I have ever written, seen by several hundred thousand people. After seeing the impact this had, I assumed I would share my thoughts and lessons in a recurring annual blog post.
Well 2020 has been one hell of a year. So here’s what I learned …
Plans are worth nothing but planning is essential
If 2020 hasn’t shown that the future is unpredictable, I don’t know what will.
While we cannot predict what will happen, we can be aware of chance and luck. We can develop a robust planning process that allows us to adapt to better or worse results than expected, even if we don’t know in advance what the causes of those results will be.
In March, I shared the thought process I used to analyze how to manage my investments and those of my parents in the midst of extreme volatility. I drew different conclusions for each of us, then acted decisively despite imperfect information.
Both decisions were correct in hindsight. It has nothing to do with short term results that I frankly never would have predicted. Instead, they were correct as they were developed following an elaborate process from planning ahead.
You may never feel safe
Can I still retire? When people ask this question, they are really asking: do I have enough money to maintain the lifestyle that I want forever? Unfortunately, there are too many unknowable variables to answer this question with any certainty.
Think about it for a minute. It’s scary.
When I left my career in December 2017, we knew that Kim’s continued income would cover most, if not all of our expenses. It was always scary to give up the security of the high savings rate we had as a two-income household. When the market fell a year later, it was confirmation that we were right to be afraid.
In 2019, the markets rebounded. We have become whole and much more. It was a rare year where practically each asset class has increased. All investors were making money, it was just a question of how much. But not everything is supposed to go up at the same time. It’s rare. It couldn’t go on. It scared us.
Last March, the bottom fell from the stock market as the impact of the pandemic became apparent. There have been debates as to whether we are in a recession or a depression. Of course, we were afraid.
Over the year, many segments of the economy remained tight. Yet our portfolio has started to rise. Over the past month, the pandemic has worsened considerably. The stock market has reached new all-time highs. Sometimes things just don’t make sense. It doesn’t seem real. It’s scary.
Do you notice a theme here? As a community of savings, many of us find security in creating wealth. So we find it scary to spend from volatile wallets.
It’s okay to be afraid no matter what is going on around us. It doesn’t make him healthy or productive. Making big changes requires recognizing our fears and acting in spite of them.
Priorities won’t magically change
In sharing my thoughts a year after early retirement, I wrote that priorities won’t magically change when you retire. After three years, I believe it even stronger.
Many of us cling to stories that just aren’t true. We use work as an excuse for anything that we choose not to make a priority in our lives or that we are afraid to do.
I’ll be brutally honest. If there’s something you’re thinking about doing in retirement that you aren’t doing now, you probably won’t.
There’s a good reason why you aren’t already doing this thing. It is not a priority in your life. If you want things to change, you have to own it.
If you are thinking of starting to exercise, meditate or eat better in retirement, start now!
If you plan to become a better spouse, parent, child or friend when you retire, start now!
If you are planning to give this hobby a try, develop that new skill, or learn the foreign language you’ve always dreamed of when you retire, start now!
If you want to travel in retirement, start traveling now! (OK, you might want to wait a bit on this one until it’s safe, but I think you get the hang of it.)
Much of the planning for retirement is wishful thinking. I was guilty of it and I promise to be brutally honest about it in my writing so as not to help spread this mindset to others. I encourage you to start building your best life today, even if you can’t retire yet.
You CAN change if you get down to business
Change is difficult. That’s why it’s important to be brutally honest about the stories you create to explain why you aren’t already doing the things you say you want to do and know you should.
When I wrote about my first year of early retirement, I wrote about not volunteering or climbing more like I said when I had more time. But honestly, these are insignificant compared to what I thought I was afraid to write.
Throughout our careers, Kim and I have had a great marriage. I wanted a great wedding. I used the hustle and bustle of work as an excuse to explain why we didn’t already have this. It would be better when… It was my story.
In reality, financial independence and early retirement did not suit us. It almost broke us. Achieving our financial goals took away a unifying mission. He also eliminated our excuses.
After two and a half years of ups and downs, we’ve finally decided to be honest. And get help. We each stopped trying to change the faults of others that were so glaring. Instead, we’ve each learned to look within, see our own flaws, and change ourselves.
To be clear, it was beneficial to have the financial resources and the time to do this brutally hard work at this point in life. To be equally clear, it would have been a lot easier to do without the 20 years of luggage we were carrying.
There is an old Chinese proverb. The best time to plant a tree was 20 years ago. The second best time is now. If there are changes you were expecting to make, stop waiting. Get to work.
Be grateful for the challenges
I have always had a practice of gratitude. Kim and I make teaching our daughter this a priority. We regularly give thanks for our family, our health, the beauty of nature and our good financial situation.
If there’s one overarching lesson I’ve learned this year, it’s to be grateful for everything. All.
We are a community of planners. Translation: we are control freaks. We try to optimize things. We create backup plans for our backup plans.
This year I wasted a lot of time and energy getting mad at things I can’t control.
To a virus that took away my freedom to travel and spend time with the people I love.
To a lack of leadership from our government and a lack of responsibility from our fellow citizens.
In an earthquake that rocked my home in March, adding anxiety and fear when we needed it least.
To a back injury that left me unable to do anything other than lie on my stomach for weeks.
To a spouse who does not share my exact values and my outlook on life.
And all my anger left me in exactly the same place… and exhausted.
In his book “Love what is, “Bryon Katie writes that there are only three types of businesses in the world; my business, your business, and God’s business. This past year has taught me to live in my business and avoid spending time in the other two, they only lead to suffering.
Planning for retirement involves many uncertainties. Life is uncertain. We control the monsters must learn not only to accept but also to be grateful for those things that we cannot control.
You may disagree with me on this last lesson. Many of you will. Good luck with that!