How To Retire

Retirement may sound like the best thing that could happen to a person, however there are two major factors that determine how successful retirement really is.

Wealth, how much will you need to retire in the style that you are accustom to? I was like most young people when I started out. Not thinking about retirement and trying to earn just enough to support a family. After eight full time jobs during six years and at age 27 with a family, a small house, I started to think about our future. My first goal was to land a stable job with a good company that had benefits.

Wealth should be measured by not only how much money you have, but property, retirement plans, life insurance and investments. I estimated that I would need to have a net worth of at least one million, taking into account inflation, in order to be able to retire at a comfortable life style. With a conservative wife, a good job, and some property purchases, I was able to reach my goal by age 62.

Our saving account was our home, any time we had any extra cash, I made extra payments on the home. I invested the minimum in the company retirement plan and later in life realized that I should have invested more. During the last 10 years I invested the maximum amount into the 401k plans that were offered.

Investment property accounted for about half our net worth. I attended free seminars on property investments and restrained from buying in on the sell pitch at the end. When the opportunity came up, we acquired a few houses and we are now in the process of selling them. Tax savings from rental property throughout the years has helped greatly when the budget was tight.

Giving to church and others has also played an important role in reaching our goal. We have tried to always give more than the 10% often mention in the Bible and have been repaid with fortune from unexpected sources. There is a saying that you cannot out give God, and I have found this to be true. However I must caution that the motivate must never be to expect something in return.

Mental Challenge, is where I have had the most problems. Retirement is a big change in life style and few of us are prepared to make that change.

I had a close friend in North Carolina that told me that the only reason that he kept working after acquiring millions in rental property was to have a reason to get up each morning. He had a job as a service technician and I trained him on many of the products we serviced. He was an entrepreneur always looking for an investment. I was attending a class in Rochester NY with him once when he made several thousand dollars by brokering a deal to supply a shortage of plywood in North Carolina with a surplus from New York. But he needed that job to give him a purpose in life and a reason to get up in the morning.

Volunteer work can fill that need also and I have Volunteered about two days a week, but all the things that I planned to do after retirement seemed to have gotten away from me. It seems that when you are busy working, you make time for the pleasures of life, but when you have all the time you need, you seem to put off a lot of things.

How many people do you know that have retired, only to die of a heart attack or just disappear into their homes?

It is also hard to let go of those hard earned savings and start spending after retirement. My financial adviser once told me that I was putting quite a stress on my retirement funds by drawing out 8% to 10% each year. This may be true, but if I wait until I am too old, I may not be able to enjoy the things that I wanted to do after retirement. It is really hard to find that balance in maintaining the right amount or even knowing what the right amount is.

I have found that I require more income now that I have retired than I expected. But I am thankful that property values have increased and the economy has done so well to supply those needs without reducing my net worth.

It is never too late to plan for retirement, set a goal that takes into account inflation. Stay diversified with property and mutual funds and avoid “get rich quick” schemes. Have plans to deal with the mental challenge of retirement as well as the financial challenge.