My wife is at the beach right now. I couldn't go because I'm stuck in meetings all week. So being the great wife she is, she sends me pictures every day. I think she likes rubbing it in!
But this whole thing got me to thinking: a lot of folks imagine themselves in retirement resting on a calm, relaxing beach. I know my wife would - the beach is her happy place.
Unfortunately there are a lot of people who will retire frustrated because, like me, they can't experience the beach for themselves and have to settle for a picture instead of the real thing.
See, I've found that people enter retirement in 1 of 3 ways:
They end up running into a brick wall.
They end up racing against the clock carrying a ticking time bomb.
They are able to rest on the beach like they imagine.
A lot of people end up running into a brick wall in retirement
This happens when people haven't prepared enough for retirement or sometimes just have trouble making the transition into retirement. Perhaps they have never learned how to live within a budget or they dramatically underestimate their spending habits. They have spent their entire lives living for the moment instead of a balanced approach that allows them to save for the future. For instance:
I know of one small business owner who has a grand vision for retirement but his habits are preventing him from ever achieving it.
I know of another couple who underestimated their spending by half of what they need in retirement.
Yes, unfortunately, many people end up running into a brick wall because they have chosen the wrong priorities.
A lot of people end up racing against the clock carrying a ticking time bomb in retirement
These are folks who were trying to plan ahead, but a financial salesperson convinced them to buy a product that was not in their best interest. While the salesperson ended up with a great commission check, they ended up with high fees or an inappropriate product. They end up racing against the clock of inflation or running out of money before they die all because the investments they were sold turned out to be a ticking time bomb. For instance:
I know of one couple who bought a fixed annuity in their 40s with a super low rate of return. Had they simply continued what they were doing, they would have doubled the money they have today.
I know of another couple who bought an annuity with 3.7% annual fees and as a result their assets will be depleted before they reach their 80s.
Through no fault of their own, many people end up racing against the clock carrying a ticking time bomb because they were sold the wrong product.
But there are some people who end up resting on the beach in retirement
They are doing what my wife is doing and what I wish I could do right now. For them, retirement is relaxing and enjoyable - much like sitting on the beach listening to the ocean waves. They are the fortunate ones who will be able to experience retirement like the grand adventure it can be. For instance:
I know of one couple who will be able to retire early - I mean 10+ years early! - because they have diligently saved and invested wisely.
I know of another couple who will be able to spend their retirement volunteering and giving to causes they care about.
There will be a few people who are able to experience retirement like they imagine - resting on the beach because they have the right plan.
What will your retirement experience be like?