For many Americans, retirement is the time when you are supposed to kick back and start enjoying life. Children are often financially independent and there is finally time to begin taking some of those deferred vacations, focusing on hobbies you may have always wanted to explore and reconnecting with friends and family. The fact is, retirement is often viewed as the time to begin taking care of yourself and doing the things you have always wanted to do.
Unfortunately, it doesn’t always work out exactly that way. Americans continue to target older ages for retirement and in turn, often delay their “deferred enjoyment” even longer. In fact, according to recent Gallup Polls, the average retirement age was 60 in 2010 and today, the majority of working Americans do not plan to retire until age 66 or later. Other statistics from Harris suggest that the number of Americans working later in life will only continue to rise over time. For many it is a matter of preparedness and for others it is choice that they are simply not ready to retire. Either way, more Americans may not end up “kicking back” until much later in life, leaving them far less time to catch up on the things they haven’t prioritized. All of this highlights the importance of one thing – do not wait until retirement to start living.
Not only is it common to procrastinate on things we want to avoid, many of us also apply a “there’s always tomorrow” mindset to things we want to enjoy too. In fact, even retirees allow procrastination to push back their personal priorities after they have retired, often never getting the chance to do many of the things they wanted.
One common reason that people often choose to delay making time for themselves earlier in life is because they are singularly focused on their professional career and earning money. For some of us, we don’t ever feel as though we have realized financial security and so we do not make our personal happiness and enjoyment a priority. This can lead to a lack of “balance” where we simply keep our head down, plowing through each day. Many of us are conditioned to remain on the treadmill of life, often filling our days with the pursuit of money rather than meaning.
Financial planning is truly a balance between living for today and planning for tomorrow. Leaning too much in either direction can be problematic and so it is critical to understand how much “balance” you can incorporate into your life. Do you have the ability to budget additional time and discretionary spending on other things in your life you have always wanted to pursue? Are you on track for you current and future financial goals?
Prior to making decisions about when to retire, how much discretionary spending you can budget and how to re-prioritize your life, it is critical to understand the financial impact of your decisions before you make them. How does retiring 3 years earlier impact the maximum amount that you can spend in retirement or how would spending additional money on travel throughout your life impact your ability to stay on track for other goals. Remember, too much “living for today” can be detrimental to future goals so it is important to quantify the financial impact of your decisions before you make them whenever possible. It is also important to avoid assuming anything without having firm numbers to support your decisions.
The next question to ask yourself is what does it really mean to “live”? What are your priorities and how can you make time for them throughout your life rather than waiting until your non-working years to explore them? Family, friends, hobbies, volunteer work, spirituality – there are so many areas of our lives that we neglect over time. What would it take to make these a priority today and how would that impact the way you lived your life? For those that are already retired, consider seizing the opportunity of spending your time on the things that truly have meaning for you.
During our working years, attacking a project at work with a well thought out systematic approach is something many people do every day. Unfortunately, when it comes to prioritizing our personal lives, many of us do not apply the same approach. Rather than delaying your personal priorities until some undefined future date, consider exploring ways to incorporate your personal goals and meaning into each and every day. Since everyone’s circumstances are unique, consider speaking to your adviser to determine the most appropriate approach for you.
Kurt J. Rossi, MBA, CFP®, CRPC®, AIF® is a CERTIFIED FINANCIAL PLANNERtm Practitioner & Wealth Advisor. He can be reached for questions at 732-280-7550, kurt.rossi@Independentwm.com, www.bringyourfinancestolife.com & www.Independentwm.com. LPL Financial Member FINRA/SIPC.