RETIREMENT IS WHEN YOU STOP LIVING AT WORK AND START WORKING AT LIVING

Enjoying life also does not mean it must cost you a fortune to pluck the fruits of enjoyment from the tree of life.

Isn’t it strange that most conversations about working eventually lead to “one day when I retire …” Yet, many people head into retirement without a plan. I am not referring to a financial or investment plan; I am talking about a life plan. I am talking about starting the second part of your life and living it to the fullest.

Everybody deserves that retirement honeymoon. Those 12 months of bliss where you just hang around, visit coffee shops, travel, play golf and in general, just have a ball. When the honeymoon is over, what then …?

How much time are you spending living at work, and how much time are you spending on working at living? 

Working at living should start the day you embark on your life journey as an economic contributor and participant. You don’t have to wait until you retire before you enjoy life. Enjoying life also does not mean it must cost you a fortune to pluck the fruits of enjoyment from the tree of life. As with everything, it’s a choice you make, and choices have implications, some may be good, and some may be bad. Some may be expensive, and some may be free.

Irrespective of what stage of life you are living, it all revolves around planning.

Everything that involves finances and quality of life has one thing in common – planning. Quality of life and finances are also entwined, and the one impacts the other. If you ask 10 people their definitions of financial wealth and quality of life, you will probably get 10 different answers. That is the beauty of it.

Our future quality of life and the wealth we accumulate primarily lie in our own hands. How successful we will be at accumulating wealth and creating opportunities to live a fulfilling life in retirement depends on many factors, including:

• How much time are we prepared to spend accumulating wealth?

• How much quality time with loved ones are we prepared to sacrifice on our journey to build wealth?

• What are we prepared to do to ensure our optimum health when we retire so that we can enjoy the ultimate retirement?

• What is your perfect balance between living life fully now without sacrificing a fulfilled retirement? Do you want to “enjoy every minute” today and forfeit the good times when you retire, or would you rather be a bit more modest in your lifestyle today and pluck the fruits later in life?

There is no right or wrong. It is your choice as long as you understand the implications of the decisions you make today. 

I often encounter people on both sides of the fence. Some prefer to live life to the fullest today and pay their way for doing so, as they view the future as uncertain. Their motto is, “I want to enjoy life while I can because I don’t know what tomorrow holds.” Conversely, others live frugally today because they do not want to rely on anyone in their retirement. Financial independence in retirement is their top priority.

Many factors can derail one’s plans for a fulfilled life and retirement. Unfortunately, that is life. Our success will depend on how we manage those challenges and adversities. If your retirement and life plans are too ambitious, you will most likely be disappointed along the way. Perhaps a more calculated approach will benefit you today and in the long run. 

Consider my four-step ladder that starts at ground level and rises to the height of retirement:

1. Pay yourself first

Set aside or invest 10% of your earnings from your first paycheck and do not touch the funds until retirement. If you can sustain this strategy throughout your working career, you can retire with an income equivalent to your last salary earned at age 65. Obviously, investment returns along the way matter.

The savings can be via employer’s funds or voluntary funds; it doesn’t matter. This strategy is important because you cultivate an investment/savings culture, and saving 10% of your salary will not negatively impact your quality of life. In fact, it will reduce stress and concerns about the future capital requirements that you will need to retire (the number one concern of people five years before retirement).

If you can maintain this strategy even when you are retired and have enough capital, finances will never be a problem. The “feel good” that you will experience will go a long way to ensure a positive mindset in retirement. Financial pressures will seem to melt away.

2. Enjoy the fruits of your hard labour

Our company motto is “Live life fully now”. Don’t be a hoarder and miss the best moments of your and your family’s lives. Take breaks and enjoy family and leisure time throughout your life.

Create a “bucket list” of things to do and places to visit. Incorporate it into your budget and five-year plan. Keep it realistic and affordable. This doesn’t always have to cost a fortune, but the quality time you spend with loved ones will resonate into retirement.

The stronger you mould your family bond, the more support, love, and assistance you will receive when you retire. When I mention assistance in retirement, I am not referring to financial help; I mean the physical and moral support we will all need in our later years when deteriorating health and losing loved ones become a reality.

3. Live within your means

Do not compare yourself to the Joneses. Understand your financial limitations and live within a managed budget. Avoid bad debt (such as credit cards) and leverage the good debt (like bonds) to grow your wealth through, for instance, rental property acquisition. One of the best investments is allowing others (tenants) to pay down your asset (rental property), but remain mindful of the risks involved. 

Rental property is not everybody’s cup of tea, and I understand why, but it can be a fantastic source of passive income that will supplement your retirement income someday. Alternatively, it can be sold, and the proceeds added to the capital that will provide you with retirement income when you retire should you no longer want the hassles of tenants.

4. Live your dream

Exercise your hobbies, maintain a healthy lifestyle for body and mind, keep relationships healthy, support and uplift your community and always think about the next three to five years. Make an effort throughout your life and in retirement to plan for expenses (holidays, health, accommodation, transport, life).

Plan your retirement in advance. Five years before you retire, you should have a blueprint of your retirement plan. This should include sources of income, time management (how are you going to spend your time from 8am to 5pm four days a week – I will give you one day off), accommodation (location in relation to family, friends, and medical facilities), research on retirement facilities with care units, leisure time, holidays, and family time.

Your blueprint must make provision for unforeseen events like unexpected medical conditions and expenses and the loss of life of a loved one (or your passing). Discuss all these possibilities with your spouse and family. Planning correctly and agreeing on a plan will make it easier and more tolerable for all involved. 

Identifying a partner who can assist and guide you through these different phases may be a good idea. This will become more important as you age and start to either lose the will to handle all these challenges on your own or start losing the ability to do so.

We find many “do-it-yourselfers” gravitating towards professional advisors due to the challenges and complexities faced in later life. Consider entering into such an arrangement sooner rather than later.

Go forth and enjoy life, regardless of your phase of life. Start working at living and enjoy the journey. 

Take care.