by Joe Hearn | Feb 20, 2012 | Pursuits, Retirement
Happy President’s Day! I learned recently that President Lincoln’s favorite poem was “Mortality” by William Knox. For me, the poem is a great reminder for how quickly life goes by. As Knox says: “’Tis the twink of an eye, ‘tis the draught of a breath, From the blossom of health to the paleness of death.”
In my book The Bell Lap, I introduced a concept I call the “Someday Window.” Retirement is often viewed as a time when you will do everything you didn’t have time to do while you were working, raising kids, and generally focusing on other priorities. Year after year, you tell yourself “someday” this and “someday” that. If a person retires at sixty-five and lives until seventy-five, he or she has a ten year Someday Window. The clock is ticking.
The takeaway from that concept is simple: We should all begin treating today like the someday we were planning for yesterday. So in memory of Honest Abe on this President’s Day and as a reminder to live your life to the full, I give you “Mortality” by William Knox.
(P.S. I drew twenty names from the Valentine’s contest entries. I will email the winners later today and the books will go out in the mail tomorrow. Thanks to everyone who participated!)
Mortality by William Knox
O why should the spirit of mortal be proud!
Like a fast flitting meteor, a fast flying cloud,
A flash of the lightning, a break of the wave –
He passes from life to his rest in the grave.
The leaves of the oak and the willows shall fade,
Be scattered around, and together be laid;
And the young and the old, and the low and the high,
Shall moulder to dust, and together shall lie.
The child that a mother attended and loved,
The mother that infant’s affection that proved,
The husband that mother and infant that blest,
Each — all are away to their dwelling of rest.
The maid on whose cheek, on whose brow, in whose eye,
Shone beauty and pleasure — her triumphs are by:
And the memory of those that beloved her and praised,
Are alike from the minds of the living erased.
The hand of the king that the sceptre hath borne,
The brow of the priest that the mitre hath worn,
The eye of the sage, and the heart of the brave,
Are hidden and lost in the depths of the grave.
The peasant whose lot was to sow and to reap,
The herdsman who climbed with his goats to the steep,
The beggar that wandered in search of his bread,
Have faded away like the grass that we tread.
The saint that enjoyed the communion of Heaven,
The sinner that dared to remain unforgiven,
The wise and the foolish, the guilty and just,
Have quietly mingled their bones in the dust.
So the multitude goes — like the flower and the weed
That wither away to let others succeed;
So the multitude comes — even those we behold,
To repeat every tale that hath often been told.
For we are the same things that our fathers have been,
We see the same sights that our fathers have seen,
We drink the same stream, and we feel the same sun,
And we run the same course that our fathers have run.
The thoughts we are thinking our fathers would think,
From the death we are shrinking from they too would shrink,
To the life we are clinging to they too would cling —
But it speeds from the earth like a bird on the wing.
They loved — but their story we cannot unfold;
They scorned — but the heart of the haughty is cold;
They grieved — but no wail from their slumbers may come;
They joyed — but the voice of their gladness is dumb.
They died — ay, they died! and we, things that are now,
Who walk on the turf that lies over their brow,
Who make in their dwellings a transient abode,
Meet the change they met on their pilgrimage road.
Yea, hope and despondence, and pleasure and pain,
Are mingled together like sunshine and rain;
And the smile and the tear, and the song and the dirge,
Still follow each other like surge upon surge.
‘Tis the twink of an eye, ’tis the draught of a breath,
From the blossom of health to the paleness of death,
From the gilded saloon to the bier and the shroud –
O why should the spirit of mortal be proud!
by Joe Hearn | Feb 14, 2012 | Misc.
Good morning all. Happy Valentine’s Day! Have I told you lately how grateful I am for each of you? Well, I am. To say thanks for being a loyal reader and to have a little fun, I thought I’d do an impromptu Valentine’s Day Contest.
The prize? I’m giving away 20 signed copies of my book The Bell Lap: The 8 Biggest Mistakes to Avoid as You Approach Retirement.
How to enter? Simple. Just email your name and mailing address to joe@intentionalretirement.com. I’ll randomly draw 20 emails from those I receive by this Friday at 10 am and mail those 20 people a signed copy of my book.
Legal mumbo jumbo: Your contact information will never be sold or shared. No purchase necessary. Void where prohibited. Etc., etc.
Good luck to all! Have a great day.
Joe
by Joe Hearn | Feb 9, 2012 | Pursuits, Retirement
Delayed gratification is great if it’s allowing you to work toward something. For example, saving for that trip you’ve always wanted to take or giving up that extra hour of sleep so you can make it to the gym. You’re giving up something good now in order to get something better later.
Where delayed gratification becomes a problem is when it is used as an excuse for life avoidance. Rather than allowing you to work toward something, it is keeping you from something. Sure, it’s hard to decide what you really want out of life. It’s risky to pursue big goals. Rather than rising to the challenge, we tell ourselves we need a little more time or a little more money. Not yet, but soon. Someday.
Here’s the thing. The longer you wait, the less you believe yourself when you say “Someday.” Your dreams begin to atrophy. Your opportunities begin to vanish. You aim lower. You talk yourself out of things. Before you know it, it’s too late.
If you’ve been around Intentional Retirement for awhile, you’ve seen the quote from Mark Twain below. Your biggest regrets in life will be the things you didn’t do. So don’t delay. Decide what you really want out of life and get after it. Start small if necessary, but start.
by Joe Hearn | Feb 6, 2012 | Asset Allocation, Debt, Income, Retirement
(Note: This is Part 2 in a three part series that I did for the Omaha World Herald on retirement planning for different life stages. I’m re-posting it here for all of you who don’t live in snowy, freezing Omaha!)
Forty-five is an interesting age. It’s like the Junior High of aging. Too old to fit in with the kids at the Kanye West concert, but too young for the senior discount crowd at Denny’s. Exactly halfway between 25 and 65, it’s like a weigh station between the carefree and exciting days of your 20s and what will hopefully be the carefree and exciting days of retirement.
With 20 years to go, it’s a good time to reflect on the planning you’ve done so far and see if you are on the right track. If not, you’ve still got time to do something about it, but the clock is ticking. Here are 20 ways to make sure you’ll have enough in 20 years.
1. Actually figure out what you need. Too many people retire based on their birthday instead of their bank account. Knowing how much you’ll need will help you save with purpose and intention. A good rule of thumb is to shoot for a nest egg that is 25 times larger than the amount you want to take from it each year.
2. Get out of debt. No one in the history of the universe has gotten rich spending money they don’t have on things they don’t need. You won’t be the first to crack the code.
3. Perform budget triage. Most budgets don’t bleed to death from a gaping wound, but rather a thousand little cuts. Wasting $20 per day for 20 years will shave about $334,000 from your nest egg (assuming an 8 percent annual return).
4. Beware any sentence that begins with “Hey dad. Can I…” People in their teens and twenties are incapable of ending that sentence with anything that doesn’t cost you money and put a hole in your nest egg. Whatever the request, just answer with a firm “Yes, as long as I can move in with you in 20 years because I had earmarked that money for retirement.”
5. Make your saving automatic. Saving is like going to the gym or eating your vegetables. You know you should do it, but it takes discipline. Make it easy on yourself by having money automatically deducted from your checking account or paycheck each month.
6. Focus on the basics. Saving and investing doesn’t need to be complicated. You can contribute $17,000 to a 401(k) and $5,000 to an IRA each year. Start there. Maxing out your contributions for 20 years would add about $1,006,000 to your nest egg (assuming an 8 percent annual return).
7. Refinance. Interest rates are at historic lows. If you still owe money on your house, consider refinancing into a loan with the same payment, but a lower rate and shorter term. You’ll save thousands in interest and you’ll enter retirement with no mortgage.
8. Get healthy. In 1900 the three leading causes of death were influenza, diarrhea, and tuberculosis. Today they are heart disease, cancer and stroke. All three of those diseases are expensive (even with insurance) and heavily dependent on things like diet, exercise, smoking, drinking, and stress.
9. Beware midlife crisis purchases. If you’re tempted to buy a Hemi powered midlife crisis-mobile, don’t. Buy a nice used grocery getter instead and put the difference in your IRA.
10. Add up everything you’ve spent during the last 12 months on beverages (e.g. soda, red bull, alcohol, venti non-fat no foam double shot hazelnut lattes, etc.). If the number is greater than the world median annual income (about $1,700), reacquaint yourself with the benefits of water.
11. Make it personal. You’re not planning “retirement,” you’re planning “your retirement.” Once you realize that and spend some time thinking about the things you are really looking forward to, you’ll be incredibly motivated to make it happen.
12. Avoid mistakes, especially those that result in large investment losses. At 20 you had plenty of time to recover. At 45, large losses are like meteors to dinosaurs. They are extinction level events. Don’t put all your eggs in one basket (like your own company’s stock) or make questionable investments (like that can’t miss tip from your brother-in-law).
13. Meet with a trusted adviser annually. Answer three key questions at each meeting: How did my investments do this past year? Am I still on track for retirement (see number 1)? What changes do I need to make?
14. Work on your marriage. Middle age is a risky time for you and your spouse. Having a happy marriage is reason enough to put forth the effort, but if you need something more, remember this: A sure fire way to derail your retirement is to divide all your assets in half.
15. Don’t be too conservative. The markets have been crazy these last few years and a lot of people responded by moving everything to cash. That may help you sleep well, but it won’t help you grow your assets and outpace inflation. Repeat after me: Safe is risky.
16. Review your asset allocation. If instead of moving to cash, you ignored your investments through the recent market turmoil, there’s a good chance that the ups and downs threw your portfolio out of balance. Research shows that your asset allocation is responsible for 90 percent of your investment returns. Work with your adviser to rebalance to a more appropriate allocation.
17. Downsize. Once the kids are gone, reconsider the necessity of having a house big enough to have its own gravitational field. A smaller place means that you’ll be spending less on your mortgage, heating, cooling, insurance and property taxes. Invest that savings for retirement.
18. Take advantage of peak earning years. You’ll likely make a lot of money in your 40s and 50s. As the kids grow up and move on, be sure to make your peak earning years your peak savings years as well.
19. Beware of fees. A good adviser or mutual fund can add value, but pay close attention to the fees you are paying. It’s not just the fees, but the compound interest those fees would have earned had they stayed in your account. Over a 30 year period, an extra 1 percent in fees is enough to shave 25 percent off the ending value of your investments.
20. Don’t retire early. Calling it quits before your full Social Security retirement age could mean a 20 percent permanent reduction in benefits. It’s worth remembering that the number one reason people retire early is poor health (see number 8).
Unless you’re a trust fund baby or a lottery winner (and let’s be honest, they all quit reading after number 3), you’ve probably got a little work to do. But have no fear. You can do a lot in 20 years. The key, as with most things, is to start. Ready? Go.
