Keys To a Successful Retirement
Staying happy, active, and productive in your retired years.
I have been a big fan of Fritz’s blog for quite a while. He has tons of excellent content on his website, TheRetirementManifesto.com
Nevertheless, I was looking forward to reading his book. Let me tell you – he did not disappoint.
Let them eat cake
Fritz likens retirement to a metaphor I can sink my teeth into: cake. I guess I like concrete edible items. He highlighted the need for retirement planning. This is like working off an excellent cake recipe. Fritz knew that many mess up retirement. So, he spent the three years before retirement reading, learning, and writing on his blog, TheRetirementManifesto.com
After a great recipe, you will need to line up your ingredients. He likens piles of cash to eggs in your cake. He points to guidelines telling us how many eggs we will need. For example, 25-30 years of living expenses in cash. That’s a lot of eggs, and they are essential. Don’t kid yourself since they will be hard to come by if you come up short.
On the other hand, there’s a lot more to a good cake than eggs. He cautions us to spend time thinking about the nonfinancial ingredients of our retirement. In time, you’ll find they’re more valuable than money.
Some factors we could all attend more to include our attitudes, curiosity, generosity, intellectual stimulation, lifestyle needs, social connections, experts, fitness, and spirituality.
As we work and receive our paychecks and W-2s, we don’t realize how dependent we become on these dripping deposits of cash flow. Suddenly -in retirement- the flow stops. Most of our households’ cash management is based on our regular paychecks. Fritz explains how to use a bucket strategy and accounts to make this flow after the paychecks stop.
I realized the importance of this when I went onto disability, and my work paychecks stopped. Those had flowed in consistently for twenty-five years and now dried up. How would we pay the bills? Sure we have a sizeable portfolio and a wide array of assets, but markets are down this year, and the utility company still wants to get paid. Fritz convinced me of the benefit of a Bucket Strategy. He recommends:
· Bucket 1 has three years of living expenses.
· Bucket 2 will be 5-7 years of low-volatility income-producing assets (e.g. bonds).
· Bucket 3 is for more volatile growth assets (e.g., stocks).
“Welcome to a coffee break that will last the rest of your life.” -Fritz Gilbert
We may not realize it, but we are creatures of habit. We started to ingrain our behaviors every time we head off to work. How many times have you done that? Don’t underestimate the importance of setting up new routines in your post-work world.
Fritz found that after decades of arising at 5:15AM, he can rest until 7:30 and feel more refreshed. He can get outside and walk his dogs before spending time in the community or on his blog.
We don’t need every 10 or 15-minute block scheduled but some loose structure is helpful.
We underestimate the power of relationships at our workplace. Those may range from some of our best friends to occasional acquaintances. They all form an essential piece in our current relationship structure. People often underestimate that effect, and so it’s worth preparing for.
Have you thought about which relationships you would continue after leaving the workplace? Chances are those relationships will change in some way, and so you need to be strategic. Which relationships will you continue to invest in after your routines no longer cross?
How will your relationships at home change? If you have been away from your spouse sixty hours a week and suddenly are always there, that’s a big change. Maybe you can talk that through ahead of time. You likely will land on some balance between “alone time” and “together time” that works for you.
Most of us think of our workplace as well -just that- a workplace. A place to do our job and earn a paycheck. But the workplace can be where our passions come alive. For those of us in medicine that’s true for many of us -despite significant changes over the years- our career is our calling. We see it as serving our fellow humans, igniting our passions, and imbuing our life with meaning.
We should think about this role in our own life before embarking on our retirement journey. They are more important than our Roth Conversions discussed in many retirement articles.
Passion provides the frosting on the cake. Who would want a cake without frosting? Reflecting on what you used to enjoy decades ago or what groups of people you are now well-equipped to help can provide clues to your passions.
“What do you want your life to be?” -Fritz Gilbert
In keeping with Fritz’s motto of “Never Stop Learning” he was generous with his time and thought in producing a useful resource list. I’m pretty involved in this space, but he brought several websites and podcasts to my attention for which I’m grateful. I hope you read his book and take the time to explore his many recommended resources.
You worked very hard on your career. Likewise, you should put some thought and effort into planning a comfortable transition for life beyond work.