by Joe Hearn | Apr 3, 2015 | Happiness, Lifestyle Design, Retirement
In 8 Habits of Successful Retirees I talked about what actions, habits and behaviors make for a great retirement. But sometimes being successful at something is as much about avoiding the bad as it is about doing the good. With that in mind, here are 5 behaviors that will ruin your retirement.
Poor time management. Legendary basketball coach John Wooden once said “I keep track of minutes like a banker keeps track of money.” He wasn’t just referring to games either. His practices were scheduled down to the minute too. His reasoning was simple. He had 5 two-hour practices each week over the course of a 21 week season to coach his players. That is 210 hours or 12,600 minutes of practice. That time is easy to waste if you’re not very, very intentional. The same is true for your retirement. You will have a very limited time in retirement, even under the best of circumstances. If you’re not careful, it’s easy to waste days, months or even years (See also: The surprising truth about how retirees spend their day). Keep an eye on the clock and be very intentional with your time.
Waiting for permission. Too many of us sit around in life waiting for someone to tell us it’s ok to do something. Call it the inertia of permission. It can kill your retirement. Chances are good that you don’t need anyone’s permission to do what you want in retirement. You’re a responsible adult. You live in a free country. You (hopefully) have financial independence. As long as what you do doesn’t break the law or hurt someone else, just do it. Don’t wait around for someone to give you a green light. You don’t need it. Give yourself permission and get going.
Assuming. We make lots of assumptions. We assume that we won’t develop crippling arthritis in our feet. That we won’t have a heart attack walking to the front door. That we won’t be diagnosed with a life changing illness like cancer or diabetes. That we won’t get divorced. That a friend or loved one won’t die. That we won’t lose our job. Those are all things that haven happened to clients of mine over the last year and when they happened, they wiped out dozens of opportunities from each person’s “To-do” list. If you assume that the opportunities available to you today will also be available to you tomorrow, a year from now or ten years from now, then you’ll tend to put things off. One of the most valuable insights I’ve gained from working with hundreds of retired clients over the years is that these “unexpected” things happen to everyone. Don’t assume that you’ll always have time. Live your life like your opportunities have an expiration date, because they do.
Confusing “Past” you with “Future” you. Retirement should be a time in your life when you do the things that you’ve always dreamed of. For you that might be travel, leisure, adventure, volunteering or learning a new skill or hobby. When given the opportunity to actually do those things, however, people will often talk themselves out of it. They say something like, “I’ve never been one to…” or “That’s not me.” Well guess what. That might not have been you when you were working 60 hours a week and raising 3 kids, but your circumstances have changed. You need to get rid of limiting beliefs and redefine how you see yourself. Maybe you ARE the guy who becomes an expat to Ecuador. Maybe you ARE the lady who takes up skydiving. Maybe you ARE the couple that sells everything and starts a B&B in Oregon. Past you does not equal future you.
Not leveraging the first half against the second half. I have a friend who works at IBM. Early in his career he changed positions within the company as often as possible so that he could get a broad set of skills and experiences. His goal was to take that varied set of skills and experiences from the first half of his career and leverage them into a successful management position during the second half of his career.
We should all be doing something similar in life. By the time you reach retirement you’ll have about sixty years of hard won knowledge, skills, wisdom, insights and experiences. Use those things as leverage to define, shape and create a successful retirement. You know what works and what doesn’t. You know what makes you happy and what doesn’t. You know who matters to you and who doesn’t. Put that knowledge to good use.
Have a great weekend!
~ Joe
Photo by Nick Kelly.
by Joe Hearn | Mar 25, 2015 | Investing, Retirement
How much should I have by my current age?
A lot of material crosses my desk in a given week, but one thing that caught my eye recently was a retirement report from J.P. Morgan. One of the charts in the report was titled Retirement Savings Checkpoints. If you’ve ever wondered “How much should I have saved by now?” this chart can give you a rough idea.
Just find your current salary on the top and your age on the left and then draw a line from each until they intersect. The number at the intersection point is how many multiples of your salary you should have saved by now. For example, if you make around $75,000 and you’re 55 years old then you should have about 4.1 times your salary (or about $307,500).
How much should I have by 65?
There is a general rule of thumb that says that most people need about 85% of their pre-retirement income during retirement in order to maintain their standard of living. Research done by Charles Farrell and Aon Hewitt shows that the average person can achieve that 85% replacement rate as long as they have Social Security plus 11-12 times their annual income in savings when they retire (for more on this topic read “The 15 minute retirement readiness review”). So the chart above can give you a rough idea of how much you should have saved for retirement based on your current age and income, but your ultimate goal will be to have around 12 times your annual income in savings when you retire.
That’s just an estimate of course, but it can be a helpful way to quickly gauge your progress. Ideally you’ll want to factor in the specifics of your unique situation when estimating how much you’ll need for retirement. You can do that by working with a trusted adviser or using a tool like our Ideal Retirement Design Guide.
Note: Sorry for the “radio silence” last week at the site. I was on the road visiting clients in Illinois and then spending some time in Tennessee during our daughter’s spring break. We’re trying to get her to all 50 states and Tennessee was number 22. Props to all of our Tennessee readers. We had a great time in Nashville, Franklin and Memphis.
~ Joe
by Joe Hearn | Mar 8, 2015 | Hobbies, Pursuits
Note: This post is part of a weekend series I’m doing throughout 2015 that is focused on fun things to do (or learn) during retirement (i.e. bucket list items). I hope you enjoy them and use them as inspiration for your own adventures. Congrats to Dennis from our email subscribers who was the winner of this week’s giveaway. There’s an iTunes gift card on the way to your inbox Dennis. Feel free to use it toward the purchase of the time lapsing app discussed below.Have you ever watched one those cool time lapse videos and asked yourself “I wonder how they did that?” Me too. So I added “learn to time lapse” to my bucket list. Time lapse is one of those things that has become infinitely more approachable with the advent of apps and the smart phone. Making a time lapse used to involve complicated and expensive equipment (which you can definitely still use if you want to make super high quality videos), but now just about anyone can make a cool time lapse video with equipment they already have in their pocket. Here’s an easy guide on how to make time lapse videos with your smart phone.
What is time lapse?
Before jumping in, let’s explain what time lapse is. Many people incorrectly assume that time lapse is just shooting a video and then speeding it up. In actuality, time lapse is a series of still photos that are strung together and played back to create a moving sequence. What makes it interesting is that the rate at which the photos are played back is faster than the rate at which they were captured. This allows you to see movement that your eye wouldn’t normally pick up on. For example, you could take a picture of clouds every 10 seconds and then play those pictures back at 30 frames per second and you’d see the clouds rapidly changing and moving across the sky.
What equipment do you need?
For beginners, all you should need is your smart phone, a tripod and an app to help you sequence and render the photos. The app I use is Lapse It, which is available for both iPhone and Android. (Note: Some smart phones like the iPhone have a time lapse setting, but it doesn’t allow you to control any of the settings, so I prefer to use the app). If you already have a tripod, you’ll need an adapter that will hold your smart phone.
Step 1: Compose the photo
One of the key benefits of time lapse is movement, so when composing your shot, you want to look for things with some sort of movement (e.g. clouds, sunrise, tides, traffic, etc.). Your camera needs to be still while taking the photos, so find an interesting scene, set your camera up on the tripod and you’re ready to go. Note: Try to set up your camera where people won’t be walking in front of it (unless people are the subject of your time lapse).
Step 2: Adjust the settings
Once you’re camera is set up, you’ll need to set the frame rate. That is the number of seconds (or minutes) between each photo. Lapse It allows you to easily adjust the frame rate based on what you’re trying to capture. If something is moving relatively quickly, you can set your frame to capture a photo every few seconds. If it’s moving more slowly (sunrise for example), you can set your frame rate to capture a photo every 10-15 seconds.
Step 3: Take the photos
Once you’ve chosen your subject, set up your camera and adjusted the settings, just hit the “capture” button to start taking photos. At this point you can sit back and relax, because it can take a bit to get enough photos for the video. For example, if you plan on playing photos back at 30 frames per second and you want a 30 second video, then you need 900 photos. If you’re taking a picture of clouds every 10 seconds and you want to take 900 photos, then you need to take photos for 2.5 hours.
Step 4: Render the images
Once you’ve taken all the photos you need, just hit “stop” and Lapse It will automatically bring up the settings for rendering the final images. This is where you can choose the playback speed, add music or filters, trim the video, etc. Each time you adjust a setting, you can play back the sequence to see what your final video will look like. When you have it like you want it, just hit “render” and Lapse It will complete the project. Once it’s done you can save the video to your camera roll or share it to social media like Instagram or Facebook.
The final product
What does the final product look like? I was in Belize a few weeks ago and took a quick time lapse of the sunrise. I’ll put it below, but if you’re reading this post in your email, you may need to visit Intentional Retirement to actually watch the playback. I’m still learning the ropes myself, so this isn’t the best quality in the world, but you get the idea. Now you can give it a try yourself.
by Joe Hearn | Mar 5, 2015 | Happiness, Health, Lifestyle Design
We put a lot of emphasis on saving enough money for retirement, and rightly so. Money is important, but as I’ve said time and again, retirement is more than a math problem. One negative side effect of our obsession with our “number” is that we forget (or never decided) what we wanted all that money for in the first place. With that in mind, here are 5 things that are more important than (or at least just as important as) money to a happy, fulfilling retirement.
1. Health. Emerson once said, “The first wealth is health.” You don’t need to be a millionaire to enjoy a nice walk on a beautiful day. Conversely, you can have millions, but if you’re constantly in pain or physically unable to do even simple things like walk up stairs or pick up your grandkids, then the options available to you during retirement will be small indeed.
2. Curiosity. Thomas Hobbes once said, “Curiosity is the lust of the mind.” Lust is an emotion or feeling of intense desire. Curiosity, therefore, is a lust to know “Why?” and “How?” It’s an intense desire to learn, explore and discover. It’s a passion to do and be. It’s an appetite for experiences and an interesting life. Money can’t buy that.
3. A willingness to act (a.k.a. Be intentional). Donald Miller once said, “If you happen to be sitting in the theater of your mind, watching through the camera lenses of your eyes and the story you’re watching isn’t very interesting, there’s something you can do about it. You can edit it. You can change it.” You are not a passenger on the plane of your life. You’re the pilot. Some initiative and a willingness to be proactive can often go a lot further than a few extra bucks in your bank account.
4. Relationships. David Rockefeller once said, “I am convinced that material things can contribute a lot to making one’s life pleasant, but, basically, if you do not have very good friends and relatives who matter to you, life will be really empty and sad and material things cease to be important.” I can’t add much to that.
5. Time. Carl Sandberg once said, “Time is the coin of your life. It is the only coin you have, and only you can determine how it will be spent.” Carnegie had more money than you. Kennedy had more power than you. Clark Gable (or Grace Kelly) was better looking than you. Elvis was more popular than you. Shackleton had a more adventurous life than you. Would you trade places with any of them? No, because they ran out of the one commodity that makes any of those things worthwhile: Time. Time is your most important asset, but you have less of it now than when you started reading this article. It is your only asset that never grows. Use it wisely.
~ Joe
Photo by Nick Kelly
by Joe Hearn | Feb 26, 2015 | Asset Allocation, Investing, Retirement
The number one fear of retirees is running out of money. How can you create a predictable paycheck in retirement?
Step 1: Create your retirement budget.
Decide how much money you will need each month in retirement by creating a detailed retirement budget. You can download a free Retirement Budget Worksheet from our Retirement Toolkit.
Step 2: Evaluate your potential income sources.
There are 5 primary sources of retirement income: Social Security, pension, personal investments, passive income like rental property and work (usually part-time). Evaluate which of those income sources will be available to you during retirement and estimate how much income you can derive from each.
Step 3: Compare your budget with your income.
Is your anticipated income enough to cover your anticipated expenses? If not, you may need to delay retirement or find ways to trim your retirement budget.
Step 4: Decide on a claiming strategy for each income source.
With Social Security, you can claim early, on time or late. You might be entitled to spousal benefits or it might make sense for you to file and suspend so your spouse can claim benefits based on your record while your benefits continue to grow. Likewise, there are a number of strategies available when pulling money from your investments, such as dividends only, guaranteed income, systematic withdrawal, bucket strategy and a time segmentation strategy to name a few. All that just to say that for each source of income, there is usually a way to maximize that income based on your unique situation. Working with a competent adviser is usually a good idea when you get to this point. There are a lot of moving parts and the difference between a good strategy and a bad one is usually the difference between…well…a good retirement and a bad one.
Step 5: Retire. Review. Recalibrate.
Having a predictable paycheck doesn’t stop once you retire and turn on your various sources of income. Take time each year to review your withdrawal strategy and make changes as necessary. Some questions to ask yourself:
- Is my withdrawal rate sustainable?
- Is my income still sufficient and keeping pace with inflation?
- Is my asset allocation still appropriate?
- Is the amount of risk I’m taking still suitable?
- Has the value of my assets changed significantly?
- Has my life expectancy changed?
Your answers to those questions will help determine if you need to make changes to your investment and/or distribution strategy.
Bonus: How can I make my money last longer?
Earlier I said that one way to help extend the life of your nest egg is to maximize income from sources like Social Security. What are some additional ways to make your money last?
Dynamic Spending: Take a look at your retirement budget. How many of your expenses are non-negotiable vs. discretionary? If most are non-negotiable, then you will likely be forced to draw money from your investments during inopportune times. If, however, you’re able to set up a budget that has a certain level of discretionary spending, then you can adjust your spending based on market conditions. In down years you can put the discretionary spending on hold and extend the life of your nest egg in the process. Housing and transportation are two of the biggest non-discretionary retirement expenses. Downsizing your house and cars or entering retirement with those things paid for can give you a great deal of flexibility with your spending.
Diversification and asset allocation: Having an appropriate asset allocation helps you mange three key risks: 1) It keeps you from being too aggressive and subject to large declines. 2) It keeps you from being too conservative and subject to inflationary erosion. 3) It will hopefully help your portfolio grow consistently over time so it will last as long as you do.
Stay (or get) healthy: Longevity is a risk because the longer you live, the longer your portfolio will need to last. Even so, most of us want to live as long as possible. Staying active and healthy can save on health care co-pays, prescription costs and (biggest of all) long-term care expenses.
I kept things pretty simple in this post. When you start considering things like inflation, longevity and market fluctuations, the complexity of the predictable paycheck multiplies quickly. If you want to take a deeper dive into some of those issues, feel free to check out The Ideal Retirement Design Guide.
~ Joe
