Questions to think about

Here are four questions that hopefully will stimulate your thinking about your retirement planning. They are easy questions that are very hard to answer. In your answers think about the pictures and images they call to your mind. There is no correct or wrong answer. You will, however, notice a theme and a progression which hopefully will focus your thoughts. 

I want you to assume that you are financially secure. This means you have enough money to take care of your basic needs and wants now and in the future.
  
The first question is…how would you live your life?  
In answering this question, consider if you would you change anything? Use your imagination and do not hold back on your dreams.  Take some time and write down a description of your complete life with as much detail as you can think about. 

In the next question, you have gone to visit your doctor who tells you that you have only 5 years to live. 

The second question is What will you do in the time you have remaining to live?  What will you change in your life and how will you do it? Will you move, will you change relationships, will you travel, will you create and finish a bucket list?

We move along and you visit your doctor and you are told that you only have one day left to live. This is a shock, but take the time to notice what feelings arise as you confront your very real mortality. 

The third question is in three parts. What will I miss?,  Who did I not get to be?  What did I not get to do? As we are confronted by our own mortality or when we go to the next Celebration of Life, we should think about these questions and if we can we should take steps to be the person I am not yet, and do the things that I have not yet done and spend more time with the people I will miss.

Imagine you are the wise elder of your family and community. The last question goes beyond your life and asks you to contemplate your vision for a better world future and what you can do to create the world you would wish to live in.

The fourth question is What world you would like your grandchildren, great-grandchildren, great, great-grandchildren to live in?  When thinking about your answer, consider what lifestyle changes/actions (large or small) can you take today to ensure the sustainability of the human family and natural world around you for generations to come? What is it that you have done, or will do to make the world closer to the world you imagine for your family?

Life Planning and Retirement 2

As I said yesterday, money is a tool that should enable its owners to live lives they love, create memories they treasure and establish legacies that express their deepest values. The problem is, most people do not have a clear picture of what they truly want.  What are your goals? I imagine that they are fine goals, but are they  enough to enable you to look back at the end of your life and say: “I have lived a rich life that was truly my own, and I would not have changed a thing.”

Retirement Planning Starts with the “Why”:

One of the most popular TED Talks of all time is Simon Sinek's  “Start with the Why.” In his talk, he explains that most companies market to consumers with messages explaining “what” they do, followed by “how” they do it. This is because “what” and “how” can be clearly communicated using the logical parts of our brains. The only problem is that humans are typically not motivated by logic, but by emotion. Mr. Sinek makes a compelling case that the most important place to start is with “why.” Why we do what we do reveals what is in our hearts, and that is where true motivation and fulfillment lie.

NYU psychologist Jonathan Haidt uses a lovely analogy to explain both the logic and the emotional side of our nature: the emotional side is the elephant, the rational side is the rider. The rider of the elephant looks like he or she is in charge, but when there's a disagreement between the elephant and the rider, the elephant usually wins. The point here is emotions – positive and negative–are powerful, and you discount them at your own peril. 

As you are now retired or thinking of retirement it is important that you take the time to explore your own story. Telling your life story is important because your story has the power to inform, inspire, guide, persuade, entertain, educate, open hearts, create laughter/tears, heal and transform.

I was recently at an Elders Indigenous gathering in Vancouver and was struck by the range of experience and the collective wisdom of these people. Elders in traditional communities, through stories, fairy tales and myths, passed down through the generations their customs, culture and wisdom to ensure the survival of the community.  

Today we have lost the idea that Elders have wisdom, the industrial age undermined our connection to nature and the individual is now left to fathom out by themselves how to transition through never-ending change.  The ecological crisis, climate change, ethnic conflict, global warfare, financial debt crisis are all examples of immediate challenges for today’s communities.  Rituals and stories help us as individuals to see the world more clearly and equally make sense of our ‘place’ within it, so we owe it to our children and grandchildren to tell our stories so they can learn to navigate the complexities of their new reality.

Retirement Planning – Where Do You Start?

If you were like me, I was not overwhelmed by the prospect of retirement. I retired and then I realized I had no plan and no idea of what I should do next. I was overwhelmed so we went away for 8 weeks to Australia to visit family and friends. While there I did not think about the fact I retired but I did start thinking about what I should do next. When I came back to Canada I realized that I had retired too soon and I missed work. I was lucky and was able to return to work and I worked part-time and full time for eight years before I decided in 2014 to retire full time. By that time I had another purpose and ideas about what I needed to do with my time. I still am doing it and enjoying the freedom I have to explore my writing, my workshops and my time with family and friends.

I realized that there are only two sides to retirement planning.

1) The financial side is established financial planning where you determine if you have enough money and where your income will come from each year for the rest of your life. I had done that before I retired so I was not worried nor am I worried about running out of money before I die.

2) I think the more important side of retirement is the personal/emotional side is where you answer the question: What do I want to do with the rest of my life? 

If you think of money as a tool that should enable you to live the life you love, create memories you treasure, and build legacies that express your deepest values then money becomes not important once you know you have enough. The problem is most of us do not have a clear picture of what we really want. Find someone, who can guide you through life’s transitions and help you figure out how to live a retirement that will leave you without regrets, doing this can really help you make the transition into retirement.

Most of us as we think about retirement become very focused on traditional financial planning. To that end, we use various programs to determine the likelihood of us outliving our money. The output of this planning will only be as good as the data you put into it. That’s called the “garbage in, garbage out” principle. Going through this process is important so you need to have  reasonably accurate numbers in the following areas:

Planned Spending:

• Core retirement living expenses – How much you plan to spend in after-tax dollars each month/year, and

• Large infrequent expenses – This includes items such as cars (if you pay cash), home remodelling/updating, etc.

• One-time expenses – a child’s wedding, vacation home purchase.

• Also factor in whether or not you have expenses that end during retirement (e.g., mortgage)?

• Financial assets – You will need a list of all your accounts (e.g., TFSA and RRSP, or for my American friends their 401k, IRAs, cash in the bank, real estate) and all your liabilities (mortgages, car loans, consumer loans, etc. 

You should also understand your risk tolerance, preferences, and past experiences with money. It is impossible to know exactly how much you will spend five or ten years from now. Don’t worry. Your initial plan is not going to be perfect. The goal is to forecast as close as reasonably possible and then update the plan based on actual spending and actual investment returns. Financial planning is not a one-time project but an ongoing process, kind of like landscaping (but less painful).

In a future post, I will talk about why we do what we do reveals what is in our hearts, and that is where true motivation and fulfillment lie and why that is important for retirement planning.

Life can change in a moment:

I was talking to a retired lawyer at a workshop and he was telling me his life story and he casually mentioned that he had survived a fire and that as a result of that fire, he had burns over 40% of his body. He went on to explain that the hardest part of his recovery was how to regain the use of his hands. Those of you who have followed me for years know that in 2014 my wife had a brain aneurysm and that at that moment I realized how life can change so quickly. The lawyer I talked to had a life-changing moment and was able to talk about it without being bitter.

I had experienced transitions when I retired and over my career,  I had brought about some major changes and I thought I had embraced the concept that change seems to be the only thing that is inevitable. But until you face life-changing issues or death the concept of change is abstract. Some events are planned while others come out of nowhere and smack us in the head. I know that lives can change at a moment’s notice. Yet nothing can prepare you for a fire, a car accident, or a catastrophic medical event. 

How well we respond to the events is I think one of the chief determinants of how well you savour life. In my life and in the retired lawyer's life the events we experienced made us stronger not more fearful. We both were very lucky as we had a wealth of people who would and did support us in our time of need. Not everyone has this luxury of a strong support group and have to face new and sometimes terrifying situations alone. My hope is that these unforeseen situations make you more effective not more afraid. More altruistic not more self-absorbed. More welcoming not more careful.

If a person does not have a strong support group then they need strong coping skills as they face the life-changing event and transition to the other side. It may be cliche to say but even after the most horrific tragedy life goes on and those who have the best coping skills, and are the most emotionally resilient, bounce back from disappointment or traumatic events and find new opportunities.  

Life is a range of transformations. We experience these changes in our careers, businesses, families, relationships, finances, and even our health. Each change requires us to go through a psychological process to come to terms with our new situation. According to William Bridges, the process of change and transition has three stages all require an emotional resiliency. The stages he uses are endings, the neutral zone, and new beginnings. 

If you are fortunate to know what changes you are up against then you can prepare for the change. If it is an unexpected change, such as a fire or a medical emergency then you cannot begin to prepare properly, but you can take steps to cope. Think of an upcoming life event including the unthinkable ones (death of a spouse, medical emergency, car accident, etc)  or one you are dealing with now. Write down every relevant question, concern, and possible consequence. You have to get them out of your head and on to paper. For example: What’s my greatest fear? What’s the potential financial impact? Where will the money come from? What resources or expertise could help me with this situation? Whom do I know who has been through this and what can I learn from that person?

The process of thinking through these questions will give you the confidence to respond when the time comes. Proactive thinking puts you in a different headspace even when the situation turns out far differently than what you anticipated.