Plan for a peaceful retirement

By Lionel Wijesiri

At a recent social gathering I overheard a cheerful young man advising a group of his friends, “Cheer up guys. Stop worrying. Let’s have fun. Remember, life is short. Let’s make the most of it.” Later, I came to know that he was thirty years old. People, especially the young, often say “life is short” as a justification to do or buy something immediately rather than waiting. But the truth is, life is not short. Life is long. For example, the average life expectancy for a Sri Lankan male is 72.6 years, and 79.8 years for a female.

A thirty-year-old discussing a short life may actually be looking at another 40 to 50 long years.

Financially speaking, a long outlook on life is important, because the decisions we make today will have a significant impact on the remainder of our lives. In short, these decisions can make or break our retirement plans. Whether you’re in your 30s or 40s, it’s time to create a retirement plan. And if you’re just five or ten years out from retirement, it’s crucial that you do so immediately. At its most basic, such a plan entails estimating what your retirement expenses will be, and figuring out where the money will come from to pay those bills.

The plan can show people that, ‘Yes, I do have enough money for retirement,’ or, ‘No, I have to make sacrifices now.’ A written plan helps take away that anxiety. If you don’t have that written plan you can blow through your savings. Or you can spend too little, and have a retirement that’s really below what you deserve and what you worked all your life for.

Basics

If you don’t have a written plan, start with the basics of income and expenses. Just one page!

First record your current expenses. Try to be very realistic in looking at your current expenses. Then, make some guesses about how your current expenses will change in retirement. Don’t be surprised if your retirement expenses total about the same as what you spend now, rather than decreasing.

The income side of your written retirement plan is trickier because you have to guess when you’re going to die. You don’t want to outlive your money, and it’s a lot harder to go back to work at 80 than it is at 65.

You really have to learn how to live off the income from their retirement accounts. That’s really where a plan comes into effect. More income is going to be needed later, just to keep pace with inflation.

While the initial document doesn’t have to be that complicated, it does require some serious thinking about your retirement goals. You have to think about what you’re going to be doing to know how much money you’ll need. And if you’re married or partnered, it’s crucial that this discussion involves both of you.

It is really digging into what you want your retirement to be. Do you want to travel, to spend time with the grandchildren? What are your hopes, goals, dreams, and aspirations in retirement? Is leaving a legacy important or are the retirement funds solely for your needs?

Importance

The writer believes that retirement planning has become a vital factor in the modern society. Five decades ago, our society consisted of closely-knitted extended families who came together to support their ageing parents. It was a wonderful experience when brothers and sisters agreed on decisions about and pitched in with parents’ care.

However, today, it is often not the case. Few weeks ago, the writer was listening to a panel discussion, where one expert mentioned that in urban areas only one-third of siblings help in caring for their parents. Physical distance, work obligations, the influence of daughter and son-in-laws, old wounds, and damaged feelings remain or create family divides you never thought possible in your family.

The simple message conveyed is that the supposedly “traditional” families are becoming a dying concept. Today, we can never be certain as to what might happen in the future. Life, in that sense, is not predictable. Time flies by so fast without you realising it. Probably now, if you are still a young person, you are enjoying your youth. But it does not hurt if you will also start thinking of things that you want and need to do before you turn elderly.

It is definitely much better to come in prepared when the time comes that you are already in your senior years rather than ending up with regrets.

Financial stability

While you are still young, you need to solidify your financial capacity. As much as possible, you need to be financially stable so that when the time comes that you are no longer capable of working, you have enough savings and you can still do the things that you want to do. This is not just about your retirement plan or your future needs, remember that once you have a family you also have to make sure that their future is secured.

When there are still many opportunities that are coming your way and when you are still strong enough to work, you can grab these chances and achieve financial stability in the long run.

Your goals

With the kind of life that we have today when everything just seems to be fast paced, there is a tendency to take some important things for granted. Before you turn elderly, start to ponder on some thoughts. What are the things that you want to do and to accomplish? Career wise, what do you want to achieve many years from now? For your personal life, what are your short term and long term goals?

While you still have the capacity to do the things that you love to do then you should definitely do these things. Never be afraid to try and have new experiences. At the end of the day, at least you won’t have any regrets.

Future plans

Thinking of your future plans does not mean that you are fast tracking the time. It only means that you just want to be prepared in the future. For instance, you might start thinking of your retirement plans. Do you intend to buy a small land out of city where you can relax and maybe breed ornamental fish to earn some money for living? What are the activities that you think of doing many years from now? Is there a need for you to draft your last will and testament?

Although you are living at present, thinking of these matters enable you to be prepared, at least when everything is ready and settled by the time you grow old, you can just ride life to the fullest.

Mickey Charles Mantle, nicknamed “The Commerce Comet”, was a successful and rich American professional baseball player. He once said, “If I knew I was going to live this long, I’d have taken better care of myself.”

If the young man I met at the social gathering knew just how young he would feel in his 50s and how much life is left to live, he would have taken much care of planning for his retirement needs just now and not 20 years later.