Putting Together the Plan

One of my favorite quotes came from Leonard Bernstein; “To achieve great things, two things are needed; a plan, and not quite enough time.”

As for the first part, if you don’t have some sort of plan for your retirement, you’re leaving it up to someone else to decide your destiny.  If that sounds like a bad idea, read on and I’ll describe how you might put your plan together.

As for the second part of the quote, timing plays an important part of your plan.  If you are in your 30’s retirement may seem like it's decades away, and it probably is.  But believe it or not, now is the best time to start putting together a plan.  Your plan will give you a way to approach important life decisions that may have an impact on reaching your retirement goal.

If you are in your 40’s, you better have a plan.  At this age, you are probably so busy with the demands of your career, your family, being a consumer, and paying the bills, you can’t imagine taking the time to think about how you are going to live once you leave the workforce.  But this is where a retirement plan will be the most useful.  You’ll be faced with big decisions in your 40’s.  Should I buy the bigger house?  Should the kids go away to university or live at home?  Should we buy that boat?  Should we take the trip of a lifetime this year?  While these may not seem like life altering decisions at the time, you can’t measure their impact on your ultimate goal of retirement unless you have a plan.  Your retirement plan gives you a measuring stick to gauge the impact of decisions on your ultimate goal.

If you are in your 50’s (or older!) and you don’t have a plan, well, you’re behind the power curve.  Now’s the time to get serious and figure out how you’re going to make up for lost time.

Now, what are the steps?  They’re coming, but first I have a caveat.  Don’t think that all you have to do is follow these 6 steps and you’ll have success.  Don’t think “Hmmm, 6 steps, I can have a retirement plan by this afternoon!”  These steps will take lots of thought and commitment.  You might even have to backtrack and go through some of them several times.  That’s OK.  After all, you’re putting together a plan for how to live the best part of your life.  Isn’t that worth some effort?

The steps are:

1.       Visualize: Develop a strong vision of what your retired life will be.

2.       Commit: Ensure others in your life are willing to take the journey with you.

3.       Prioritize: Put first things first.

4.       Characterize: Assess your current situation.

5.       Improve: Make changes in areas that are necessary for success.

6.       Achieve: Measure your progress.

In my next series of posts, I’ll go through each of the steps in detail so you can think about how you can implement these to build your plan.

Putting together your plan will take some effort, but stick with it.  The end goal is worth the journey!

How to Retire Early

I’ve been retired now for just over a year.  During the weeks before I left the workforce, I found that each of my peers reacted differently to my big news.  Some were genuinely happy for me; some were a bit jealous; some were skeptical; some thought it was just a dumb idea.  But the common theme among them is that they also had a plan to retire.  Or did they?

I was interested in why each person reacted differently to my retirement when they all planned to do the same thing themselves.  After all, who has a plan to just work forever?  Who doesn’t imagine what their life would be like once they no longer have to devote almost all of their waking hours to earning money at their workplace?

When I carefully dug a little bit deeper into their retirement plans, I found that these people didn’t really have a plan.  Most would respond with something like “I plan to retire at 60” or “I plan to retire when my kids graduate from college” or even “I plan to travel after I retire.”  Does that sound familiar to you?  Well, I have some bad news for you.  Those are not plans, those are dreams.

Retirement is one of the biggest decisions that you will make in your life.  It ranks up there with choosing your career, buying your first house, getting married, and starting a family.  Yet, a surprising lack of early planning goes into retirement.  Even more frightening is that you may not be entirely in control of the timing of your retirement.  It seems that more and more, employers are looking for a younger, less expensive workforce. They are willing to sacrifice your wisdom and experience earned from years in the workforce to “make their numbers on Wall Street.”  Whether you want to believe it or not, you may not be part of their plans.

So what does a plan look like?  It’s not a simple matter of saving enough money, although that’s perhaps the most important aspect of a plan.  Where are you going to live?  What are you going to do with your time?  What is your spouse going to do?  Clearly, each of us will have different answers to those questions.  How do you figure out which of those questions are most important to you?  How to go about finding the answers to them?  I’ll lay the steps you might want to follow to Retire Right in my next post.