It’s my job to constantly inveigle you to plan, save and suffer for a prosperous retirement.
I’m at you all the time – will I ever stop?
Sure; on the day you retire. But even then, there’s good advice to share. I won’t be leaving you, friends.
Let’s get started. What are the secrets to a happy retirement? Let’s start with good health. In Moscow, 20 years back, I got lucky and found a good doctor. Dr. Manet was his name – not his real moniker, for privacy’s sake, but he wore a fine familia reflecting color and light, and he brought it into his doctoring.
One time, after finishing a battery of tests to celebrate my 50th, he said, “Despite all appearances, you’re perfectly healthy.” Read this with an Inspector Clouseau accent and you’ll get it exact. Far better yet, he once told me this: “People underestimate the role of happiness in good health.”
There – that’s your first principle. We attain good health by securing a good sawbones, exercising a bit, taking a glass of wine as required; even smoking in moderation, he said, was OK, but then M. Manet hailed from rough Marseille – hardi boys and girls live on those docks. So find your own way and take sound-sense advice. Think healthy thoughts, too – keep projecting those positive waves. Science and sense prove their worth.
Here’s our old saw: have insurance to cover long-term healthcare, and allocate funds to pay for extraordinary treatments the government won’t cover. Many seniors ditch their life insurance at retirement, but if there’s a healthy cash balance involved, consult your planner – it might be sensible to hang onto the policy for emergency needs. The death benefit, if you’ll forgive my negative waving, has all sorts of uses. For one, it can fund your legacy to beloved heirs, freeing up assets to spend, spend, spend in your sunny Indian summer.
Yes, that’s right: you get to enjoy your own money now.
Retirement is time to eat, drink and be merry; Ecclesiastes 8:15. Here’s the full verse:
“So I commend the enjoyment of life, because there is nothing better for a person under the sun than to eat and drink and be glad. Then joy will accompany them in their toil all the days of the life God has given them under the sun.”
“You’re always preaching” says my manager, Rebecca, but isn’t that my job? Insurance, IRAs and investments; 401, 529, SEPs, DEPs and ESOPs. Grant me your pardon, but sympathize, because I believe every word of it.
So there – enjoy yourself, with authority. Nothing to excess, now. One of my Greeks said it; which one? Socrates? Parmenides? Papou’s brother Charley (he enculturated after immigrating)? That goes for life before retirement – you must save, prepare, compound, but don’t miss out on life entirely. Once crossing the border to relaxation land, you’ll need to take care, lest you run out of money, yet still live. Longevity is a trickster, so watch it; keep reading for the how-to.
First, let’s talk a bit about Uncle John. My father’s brother, he was an officer on the USS Salt Lake City in the first years of the War. Here’s his description of naval combat, close-quarters: “Boom! Boom! In pitch dark, locked in a compartment, waiting. That’s about it.” Taciturn fellow, but did you expect a cavalry charge? A long career at Ford Motor, managing their landscaping – companies worried about their lawns in those days. A prosperous career, retired at 65, and at 74, the scourge – cancer.
We prepared to salute his last sailing, but guess what he did – Uncle J got better. He lived to 101, for gosh’s sake, longer than anyone in the family, excepting brave Heraclitus, and I’m sticking with that – sharp to his last, as is said; true this one time, most surely. So take hope, be prepared and consider: most say to plan for 20 years of life in retirement. Hmm. You might be pleasantly surprised, even if faced by a scare, and the life raft had better be stocked.
But about you. What should you do? One last time, you need to plan. If you’re married or otherwise hitched, and expect to travel in tandem through active old age, it begins with ‘the talk’. There will be several, in fact: deep stuff, heartfelt, considered and honest. What do you want from retirement? The earlier you start sharing your visions, the better, because what you decide will inform everything you do together – particularly for our purposes today: how much you spend, and when, on retirement’s arrival.
You’ll also need a retirement life spreadsheet – you can DIY it to start, but work out the kinks with your planner. All regular expenses should be estimated and listed. An emergency fund must be designated; as I always caution, the roof could blow off, or you could blow off the roof. Decide which resources – Social Security, company pension, this IRA or that, rental income, whatever – should cover which item. Carve that in Old Testament stone; then, proceed to the good stuff. In fact, this part is good, too, because it uplifts security and relieves base anxiety, that sworn enemy of moderate blood pressure.
Remaining resources go for fun: what floats your boat? A boat? Travel; a shack on the beach (with heated pool); a flashy ride (let the kids stare); some fantasy lived? OK, but how much can you spend? The commonest wisdom says to withdraw 4%, no more or less, from IRAs and similar plans. A wise counselor recently suggested an alternative: draw out 6% in the first ten years of retirement, then gradually reduce withdrawals as you age. Elderly can mean active, but not forever, this analyst warned. At 65, with the blessing, you’re still spry, so more cash is golden. At 85, you’re hopefully healthy (hello, Uncle John), but perhaps growing tired of exertion – relax more at home, spend less. Even John gave up golf, finally, at 95.
Let’s conclude with a tale of my Singaporean friend, Mr. Chiang. When I moved to the city, I didn’t know anyone, hadn’t a clue. There was one restaurant on the corner near my exec apartment, open to the street. He had been running it since Singapore had become a thing, and his wife did the famous cooking. Chiang wore a white t-shirt, shorts and flip flops when we met, and over two years, I never saw him in anything else.
Some hotshots offered $11 million Singaporean for his place. Chiang thought for a good while, then said ‘no’. Whyever not?
“My friends come by every day to chat. My wife is right there in the kitchen. If I want to see things, I can watch Discovery Channel. Who wants to go anywhere, at my age?” He’d already traveled, anywhere you could name. Now, pushing high in his 70s, enough.
Chiang was a millionaire and wore a white t-shirt, shorts and flip-flops all day. Why go anywhere? Everyone slows down, if they’re lucky enough to get there, and he was the happiest guy in town.