When You Cannot Retire Because of Inadequate Finances, Who Will You Hold Accountable?
Eventually, most people retire. Some don’t because they love working or feel they will be lost without working or having something to do. Some don’t because they cannot afford to stop working. I will address this latter group.
Arranging for retirement is a process that takes many years. It doesn’t start the day you get your gold watch, a pat on the back and a shove out the door. If you have adequate funds, then there is not much to worry about and your life can continue as you would like it to. However, if you do not, at what point will you realize this and at what point would you wish you had done things differently? What things would you have changed?
Many people have multiple responsibilities in planning their finances for retirement – to themselves for sure, but also to their spouse, possibly their children and maybe to others they wanted to care for such as an infirm relative or a favorite charity. Inadequate planning can literally ruin the rest of yours and others’ lives.
The word planning is used a lot here, by many professionals and even by retired people who “planned” or who did not “plan.” Planning takes thought, a direction and goal and needs a period of time to be executed. Some people have a plan – get the children through college, pay off the mortgage and then bank what you are no longer spending for ten or fifteen years. That’s a typical plan and it works well.
Some skip the banking part and spend the excess funds on delayed vacations, trips, summer houses or a nascent life style. Some of this might be ok for a short time, but not for any sustained period.
Planning requires a goal and the attainment of the goal takes resolve. I find that many plans are thwarted by behavioral and not financial issues. All excess or absolutely nonessential spending can be continued or curtained depending upon how resolved you are to reaching your goal of financial security for the rest of your life. Investment methods and choices certainly play an important role, but the behavioral part is overlooked, ignored by many who simply do not want to stop doing what they want to do and who do not feel they need to worry, or face the reality of the need to provide for their future. That’s ok, if that is your plan, but if it isn’t, then you need to confront your current spending and decide what can be reduced or eliminated understanding that the savings will be banked.
A young [and now older] Warren Buffett always looked at a dollar at its future compounded value rather than its current spending importance. You don’t have to hoard your funds, but you can develop a plan and then go about implementing it. All trips start with a direction and road map. Make achieving financial security your direction and plan. Then, no one will need to be held accountable for a ruined “rest of your life” because of inadequate cash flow.