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There's good news for baby boomers entering the life phase formerly known as retirement. According to Roger Whitney, CFP, in his book Rock Retirement: A Simple Guide to Help You Take Control and Be More Optimistic About the Future, you don't have to suffer now or later (or now and later) as you pursue your version of the good life.
You will need to plan, articulate your dreams, act intentionally, set priorities, save and invest, and possibly work past traditional retirement age. But suffering is optional.
Here are a few “Rock Retirement” lessons from Whitney as he juxtaposes traditional financial planning tactics emphasizing wealth building and risk mitigation with a holistic life-planning approach.
Retirement Planning Should Focus on Life's Riches, Not Its Numbers
Whitney argues in Rock Retirement that traditional retirement planning, including the techniques he employed for years, emphasize storing up of wealth to fund spending in retirement while neglecting important matters that make a life worth living — like family, friends, health, intellectual pursuits, and more.
Naturally, we'd all like to hit our wealth-accumulation goals and enjoy life. Focusing on the math doesn't seem so terrible for people like me who find delight in creating spreadsheets. But today's retirement numbers are often out of reach for many people. Baby boomers are expected to fund 30+ years of retirement living themselves whereas their parents (or grandparents) were more likely to be sustained by pension benefits for, admittedly, simpler lifestyles.
Whatever the reason for the shortfall or what financial pros call the “savings gap,” the traditional recommendations for hitting the numbers have been joy-depleting ones like these:
- work more hours at a job you don't really like, so you can save more money and spend fewer years in retirement
- live on less today in order to save more for the future
- take greater risk in your investments with the hope of growing account values to desired levels (but putting assets at greater risk of loss)
- settle for less in the future, downsizing your lifestyle significantly in retirement
Whitney has noticed that many of his clients and podcast listeners feel so pressured to achieve financial goals that they're persisting in jobs they hate, foregoing activities they love, scrimping on relationships, and ignoring health. He strives to reverse these challenges by focusing on life optimization, not asset maximization.
It's Okay, Really, to Imagine a Dream Retirement
Early in his book, Whitney asks readers to imagine their best life in retirement. This exercise prompts an envisioning of a “retirement masterpiece” that's uniquely yours, not settling for a paint-by-numbers kit that someone else designed.
This approach reminds me of a technique I used as a professional resume writer. Before gathering detailed information about work experience, education, etc., I posed the question “what is your ideal job?” to gain insight into each client's professional goals, personal constraints, and career vision. People always hesitated to express their genuine desires. Still, I encouraged responses unencumbered by what she (or he) believed was likely.
Never did I hear “get paid to travel the world” or “make six figures doing mindless work.” Instead, clients voiced particulars surrounding job content, compensation structure, company type, colleague interaction, work environment, and professional growth. Responses guided me in identifying and highlighting aspects of each client's experiences most meaningful to an employer and ones likely to offer the types of opportunities being sought. My clients often landed positions closer to their ideals than anticipated.
Similarly, I imagine that dream retirements aren't exclusively focused on sipping margaritas on Caribbean beaches or traveling to exotic locations in private jets. Instead they're centered on elements such as proximity to family members, outdoor recreation, and top-notch healthcare facilities. They may involve meaningful paid or volunteer work, occasional travel, mastery of new skills, and time with friends. Articulating what's ideal in retirement allows you to clarify and pursue what brings purpose and joy to your life.
Of course, certain aspects of retirement dreams cost money. Later in Rock Retirement, Whitney confronts these issues with prioritization and negotiation. If your income streams and asset base don't support your dreams, you aren't obligated to abandon wants or sacrifice enjoyment of your present life to make the numbers work. However, you may need to determine what's most important to you or negotiate an updated plan with your spouse.
For example, let's say you'd like to travel frequently in retirement and own a vacation home but your finances don't seem to support both. Following a traditional methodology, you could stop family vacations now to save money for later. Using a creative approach, you might choose retirement travel over a second home or you may buy the home and do house-swaps to facilitate your travel.
Having employed this type of dream-first, edit-later approach, I recognize its value. You may not get everything you want but you'll improve your results and feel more content with the outcomes. Further, and perhaps to Whitney's point, you won't lose your life chasing after the wrong things, like more and more retirement dollars to fund a lifestyle that's not meaningful to you.
Earning Income in Retirement Could Be Fun (It'll Be Financially Rewarding)
Rock Retirement tackles money matters as secondary to living a full, rich life. Still, money helps smooth the way.
So, Whitney suggests the possibility of working in retirement doing something you love in the early phase of the traditional retirement years. Under this arrangement, you'd find (or keep doing) meaningful work with a flexible schedule in your 50s, 60s, and possibly 70s.
This approach yields significant financial advantages because you can:
- save more money
- pay off debt before fully retiring
- avoid spending down assets, which may be useful if your retirement years begin with a bear market
- keep investing and grow the value of assets, again useful during bear markets
- delay Social Security retirement benefits
- maintain and grow your social network
Working in some capacity during retirement years (also called a phased retirement) may sound like, well, too much work — especially if you're ready to bail on your job right now. But many people embrace work on their own terms well after turning 65.
Why do I concur that working may be a good idea? I've noticed that many people of retirement age don't simply stop working and start resting. Instead, they volunteer in the community, tackle home improvement projects, and take care of grandchildren. Very often, they tell me they're busier than ever and wonder how they ever got things done while working. My take-away is that I'll likely be busy in retirement anyway so I might as well generate income, particularly if I can do work I love.
Whether or not you plan to pursue some form of work, it makes sense to plan your days in retirement based on your goals, not what others want you to do or what happens to fill the time.
Whitney encourages readers to imagine and create the building blocks of joy, purpose, good health, and meaningful relationships now so you'll be ready for the transition to retirement later. Rather than see retirement as the ultimate destination worthy of endless sacrifice, he urges you to consider this time as a life phase with many components that work together to make a good life.
If you're saving for retirement but haven't started planning what your days in retirement may look like OR you've got a handle on what you want but haven't figured out the money piece, you'll benefit from reading Rock Retirement.
How have you been planning your life and finances?