At some point we all start considering retirement and what that life might look like. For some it might consist of traveling more, devoting more time to hobbies, or just enjoying a slower paced life. Regardless of what we hope for our retirement years, we can’t get there without a plan. Unfortunately many of us don’t start giving serious thought to retirement until we’re well into our careers.
My planning for retirement has been more of an exercise in defining what my vision of “quality of life” might look like once retired. Of course my definition has evolved and changed over the years. Being divorced, how I now define my quality of life in retirement is considerably different than before. Years ago the retirement vision consisted of remaining in the state, where at the time I was still married, and moving to the country and occasionally travelling. Given my current life status and having no desire of changing it, I have a lot more flexibility in defining what I would like my quality of life to be in retirement.
I can see the door to retirement getting closer but I still have a few years before deciding to actually walk through that door. Right now my vision for how my quality of life in retirement will be defined consists of general concepts. I currently live in a state that has excessive heat and humidity in the summer along with weather effects from hurricanes, occasional tornadoes and mosquitoes that think it’s open-season on humans almost year-round. I’ve decided that once I walk through the retirement door I plan to avoid geographic locations that are similar to my current environment. Another location consideration is population density. Currently the population of the metro area I’m in exceeds 6.5 million and continues to grow. The traffic in this area seems non-stop, crime rates have been increasing and so has the cost of living. I think I will enjoy a future location with a population around 50K… while also factoring in accessibility to quality healthcare. Other considerations include a climate that experiences all four seasons, options for outdoor activities, and financial flexibility to periodically travel and explore new areas.
As I’ve gotten closer to retirement over the years my vision of what that quality of life might look like has evolved. In the earlier years my vision was very specific and detailed, but now it is more concept oriented. There is nothing wrong with being very specific and detailed with respect to retirement planning, just understand there may be times when you might feel as though you’ll never reach your goals when unexpected life events occur. When I got divorced that became crystal clear to me and I changed how I was defining quality of life in general.
My list of criteria isn’t all-inclusive, but you get the idea. So the next question is, “How to achieve this and how do you know when you are ready?” The first part of this question is more involved and requires an honest self-evaluation of your financial situation and discipline; the second is influenced by how you manage the first part along with a few factors that are out of your control such as work status, market fluctuations, personal health, etc. I recently acquired several spreadsheets that allow me to understand my financial situation (assets, liabilities, net worth) and monitor my progress as I make changes. I can also track debt balances and pay-off timelines and compare them to accelerated timelines if I apply additional payments. Finally, I can monitor, track, and forecast my potential retirement income. This allows me to monitor my progress in reaching my retirement income goal. It has become a sort of game I play by setting goals throughout the year and then trying to beat them.
Some of you might be asking why use spreadsheets when there are numerous websites that can do this and update your balances automatically. This is true, but I’ve never really liked the idea of having all of my eggs in one basket. In order for those sites to provide you with a complete picture you have to enter all your various account information (usernames, passwords, access PIN, and account numbers) into their website. This consolidates all your personal financial information in one place and if that website ever experienced a data breach how much damage could be done to you financially? By using a few spreadsheets I’m not entering any usernames, passwords, or account numbers and all this stays on my local computer… unless I choose to save it to a cloud storage; but even then there is no personal account information to compromise. I enjoy managing this information because it keeps me aware of my progress and if I should consider making adjustments. I have found the more involved I am with managing and tracking my progress, the more likely I am in meeting or exceeding my goal.
We all look forward to the day when we can retire. It doesn’t have to seem like an impossible dream, the first step is to get an honest, accurate picture of your current situation and set realistic goals for your future. From there, take small steps towards your goal. It won’t happen overnight but I assure you, if you set realistic goals and maintain a positive attitude you will see progress. Keep taking small steps towards your goal and over time they will add up and you will find yourself standing in-front of the retirement door.