What is the Retirement Revolution?

The Retirement Revolution is not an investment strategy; it’s a social movement. Retirees from all over the country are proclaiming, “I refuse to live the rest of my life worrying about running out of money!”

The revolution is a mindset. It means you are going to plan wisely for your retired years, make your investments work for you, and then get back to what life is supposed to be about: living.

When Can I Retire?

Sometimes it’s phrased a little differently. When SHOULD I retire or when do I HAVE TO retire, and the phrasing usually tells me a little bit about the person asking it. Are they ready to retire, or nervous about retirement?

Strictly speaking, there is no legal age for retirement. No one is going to knock on your office door, take your computer away and hand you a bag of golf clubs.

How Much Money Do I Need to Retire?

This questions results in a lot of, frankly unnecessary, anxiety among retirees and those about to retire. Not having the right, practical information to help you answer it can lead to financial decisions based on fear and dire hypotheticals.

Many people try to determine how much they need to retire by starting with how much they spend now. However, the reality is that majority of people spend less in their 70s than in their 40s.

The best way to figure out how much you need to retire is to first assess how much you’ll actually spend. I created a simple and effective budget worksheet to help.

Read the blog: How Much Does it Cost to be Retired?

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Could I Be Saving Too Much for Retirement?

There are a lot of reasons people give for continuing to save during retirement, but they all really boil down to fear and misinformation. If you feel like you have to hoard every penny, you’re not alone and it’s not your fault. Your parents survived the Great Depression. You’ve watched pensions disappear, mortgages rates skyrocket, and banks fail. It’s no wonder you feel safer saving every last dollar until you die.

But you don’t have to. You can spend money during your retirement. Listening to the mainstream financial news on TV, you might think that most retirees are dying destitute, but that is not the reality. Only 12% (source: 2015 Kaiser Health News) of Americans die with no savings remaining (only social security to live on).

When Will I Get Social Security Retirement Benefits?

The earliest you can claim social security benefits, is 62, but that’s only the beginning of the answer. Full retirement age is The age at which you start taking your Social Security benefits can vastly impact your overall lifetime benefits. Other factors, such as if you are married, widowed, or divorced, can also greatly affect your benefits. That’s why it’s best to sit down with a planner before you file for your benefits, regardless of your age.

To learn more about Social Security, visit my page dedicated to answering your Social Security Benefits Questions.

What Are Some Misconceptions About Retirement Planning?

“I need to have $1,000,000 to retire.”

There is no standard amount of money that you need to possess in order to retire. It all depends on your savings, your monthly budget, and your expectations. Someone with $200,000 in savings and a budget of $3000/mo is probably going to be just fine. Someone with $2,000,000 in savings and a budget need of $20,000/mo is probably in trouble.

“The stock market is unpredictable and dangerous.”

The stock market has a remarkably consistent (and successful) track record.

Read the blog: How the 2008 Stock Market Crash May Still Be Spoiling Your Portfolio

“Once I retire, I am too old to invest.”

The life expectancy of a healthy 65-year-old is around 90 years old. Without utilizing growth investments, such as stocks, you are missing out on a powerful tool. I’m not promoting that you put all of your money in the stock market, but a diversified portfolio of stocks and bonds is usually appropriate throughout your entire lifetime.

“If the stock market crashes it could take me 10 or 20 years to recover.”

Not true. It took less than four years for you to recover your losses from the 2008 crash.

History of every “crash” since the Great Depression:

2008 crash: less than four years.
2001: four year recovery.
1987: one year.
1973/74: four years.
1939/40: three years.
The Great Depression: four and a half years. (source)

Just get that belief out of your mind. Markets recover faster than you probably realize.

 

“Social Security is going to go bankrupt.”

I stay very close to developments within the Social Security Administration. I can find no evidence that your benefits are going to get cut. Luckily for you it is easier for politicians to kick that can down the road. My kids need to worry. You do not.

“I need to have my house paid off before I retire.”

While it might feel nice to be debt-free, it is not a prerequisite for retiring. As long as your retirement budget can handle the payment, many people retire with a mortgage.

“I shouldn’t spend any of my retirement savings until I absolutely have to.”

It is absolutely responsible and prudent to withdrawal a reasonable amount of money from your retirement accounts each month as soon as you retire. The simple fact is that many retirees are not spending enough money in their 60’s and 70’s. In fact, government statistics show that, on average, people are dying with nearly twice as much money as the day they retired. (source)

“Some people who invest in the stock market lose all their money.”

While this may be possible if you put all of your money into a single stock or a single bond; a diversified portfolio of stocks and bonds has never gone to zero. In fact, in the past fifty years, the WORST year for an investor with a 50/50 stock1/bond2 portfolio was 1974. You would have lost about 12% overall for the year. The same portfolio would have been up 20% the following year. (Source: NYU.EDU)

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Helpful Retirement Tips

Plan for retirement like a vacation.

You have to plan for retirement, both financially and mentally. Don’t expect retirement just to “happen.” When you go on vacation, you put time into choosing the location, activities, and schedule for your trip. Retirement is just a really long vacation. Start planning your itinerary now.

You need to invest.

Once you stop working, it is absolutely essential that your money continues to work for you. The options may seem endless — CD’s, annuities, mutual funds, money markets — but nothing beats a good old-fashioned diversified portfolio of stocks and bonds. They have a strong and consistent history of success.

It may sound boring, but you need to get a basic understanding of how stocks and bonds work. If your money doesn’t grow once you retire, it can be a recipe for disaster.

Allow yourself time to adjust.

For the first year or so of your retirement, you may feel a little out-of-sorts. You may not know what to do with yourself, or find the changeover from working to retired to be stressful. This is normal. This is a big transition. For many people, it takes time to settle into the retirement of their dreams.

Read the blog: What Does a Great Retirement Look Like?

Keep moving!

Retirement is NOT sitting by a pool drinking margaritas. (Or, it’s not ALL that.) The wisdom I receive from nearly every happy and healthy retiree is this: If you stop moving you die.

Pick up tennis, golf, biking, hiking, bird watching…whatever is interesting to you. Just make sure it involves physical movement.

Explore consulting opportunities.

Consulting is a great way to slowly and gently transition into retirement. Plus, consulting is usually an awesome experience. You are the boss. You work your own hours and can earn a reasonable income. Check out sites like FlexJobs.com to find this type of work, or utilize the connections you already have.

Give back.

Volunteer, or, if you’re feeling entrepreneurial, start a small non-profit for a cause you love. Open a animal shelter, build homes for those in need, read to kids at the library. Be proactive. Use your “get er’ done” business skills.

Share your wisdom.

Lastly and possibly most important: mentor. The happiest and most fulfilled Type-A retirees I know have taken a few younger people under their wing. The best place to start this process is a church or other faith-based organization. If you don’t attend church, there are many community centers that are in desperate need of talented retirees to build up the next generation of workers and citizens.

Why Attend the Retirement Revolution Class?

The Retirement Revolution Class is not some ivory-tower, esoteric discussion about investment philosophies. It is an extremely practical and actionable strategic plan that will allow you to live the life you deserve. You will walk out with the tools you need to find that perfect balance between spending too much and spending too little.

And I have a bias — I freely admit it. I want you to have the most cash in your pockets during the years you are going to enjoy the money the most. Of course we don’t want you to mortgage your future, and you won’t, but we need to find balance. We need you to realize that money is for LIVING.

Don’t expect some dry two-hour lecture. This is an interactive workshop that focuses on real life change. You will be putting pen to paper and constructing a usable plan for your life. Ready to join the revolution? Register for a workshop here.