This month marks my 14th year in retirement. Given all of the attention lately about the problems associated with retirement, especially for the aging boomers, perhaps this would be an appropriate time to share my own experiences and observations regarding the subject. Much of what I have to say may be too late for the leading edge of the boomer generation, for proper planning should start long before age 60. However, I believe it should be useful for the next wave–assuming they heed the advice or that their advisors steer them in the right direction.
Most of the lessons that I have learned worked for me, but as with most things, those lessons may not appeal to everyone. But–that’s life!
The best advice I ever received were the words of Mahatma Gandhi who said, “Live your life as if you were going to die tomorrow, plan your life as if you were going to live forever.” Gandhi’s words are also one of the best arguments for buying whole life (or equivalent) that I have ever heard.
In my view, planning for a fixed date, or age, for retirement is mostly a waste of time. I say that because as we age or as our circumstances change our attitude about retirement changes or evolves. A much better strategy is to plan for a date when you can afford to retire. Once that has been achieved then it is a great comfort to know that you can quit any time you wish. It means that you are working voluntarily rather than because you have to. That feeling of independence makes work more pleasant, and so much less stressful, that the urge to retire abates and you extend the date to hang it up. In my own case, I reached the point where I could afford to retire before I actually did, and those extra work years were some of the most satisfying of my entire work career.
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So the real trick is to determine what you have to do to reach your target afford date. First and foremost, I believe, is to ascertain when and how you can become debt free. By that I mean, your target date, you have no home mortgage to pay on, no car payments, and no continuing balances on credit cards. When you are debt free, you know your income is all yours to spend.