Want to Retire Early?

I remember early in my financial planning career that a commonly expressed goal was to retire early, say at age 55. Retiring early may still be an aspiration for many today. And surely, some people do achieve that lofty goal. But I’ve often wondered why it was that so many wanted to quit working. Was that a good goal to strive for?

Work often gives us a sense of identity. Why would we want to walk away from that? Is it the stress and aggravations that cause people to want to stop working, to exit the rat race? Work is often challenging and difficult. It is, after all, work. Who wouldn’t want to avoid all of that? But is that realistic? Can we avoid, much less, eliminate stress and aggravation. Psalm 34:20 says, “Many are the troubles of the righteous.”

When it comes to working, I think it is important to identify and isolate the source of frustrations. The root cause is found in the answer to the question, “Why do you work?” Of course, you must provide for your loved ones. But, is your driving motivation to advance up the corporate ladder and make as much money as you can? If so, then stress is what you should expect.

But, can you think of work this way: God gives you everything including the talents, abilities, drives and desires you have that lead you to work. Phillipians 2:13 tells us that “God is the one who, for His good purpose, works in you both to desire and to work.” Your role, then, as a disciple is to utilize those talents and desires as best you can to serve others, leaving advancement and material reward up to God. This puts work on a spiritual plane. That is a wholly different perspective.

Thomas Merton in No Man Is An Island, puts it this way, “Agitation is the force of fear or elemental greed for money, or pleasure, or power. In order to defend ourselves from agitation, we must be detached from immediate results of our work…from wealth and security, from pleasures and possessions…seeking first the kingdom of God and trusting that all our material needs will be taken care of.” (110)

This seeking first the kingdom, putting God first, puts the stresses of work in their proper place. We can now accept the aggravations and see them as opportunities for self-learning and growth. We can give them to God, and trust that He will use them for our good, to make us better and more productive, and to help us bring others closer to Him as we serve them.

With this attitude toward work, is retiring at 55 still a meaningful goal? Is retiring at all a worthy goal? Did you know that there is no scriptural basis for retirement? Actually, it is quite the opposite. Sirach 11:20 tells us to grow old while doing our work.

What Will You Retire To?

Not retiring does not mean remaining stuck in the same drudgery day after day until you die. But now a more worthy retirement goal can become to accumulate enough financial resources so that you can do work that helps bring more meaning and purpose to your life. Maybe that is taking a lower paying job at a non-profit, or non-paying volunteerism. The key question now is not what will you retire from, but what will you retire to?

Many of the clients I served found that once they retired, they became bored. There are only so many rounds of golf one can play in a week. Essentially, they would “un-retire”. They’d go find work that they felt added value to the community and to themselves. What will that be for you?

Think about your work and why you do it. Lift up your work, and your colleagues and customers to God, thanking and praising Him for the blessings and benefits of work. Ask God for the wisdom to know how best to use the talents He gives you, and then the courage to act, to do what will help them, and so bring glory to God. St. Augustine said, “Whatever you do, do it well, and you have praised God.” Have this view of work and see if you still want to retire early – if at all!


Retirement Comfort Survey

In April 2010, a study done by Merrill Lynch found that 73% of people over 51 are concerned that their retirement assets won’t last as long as they will. But, a pre-2007 survey conducted for the National Summit on Retirement Savings held in Washington, D. C. revealed that 70% of people said they were confident they’d have enough money to live comfortably in retirement. Interesting what a few years will do to perspective.

More interesting still is that of that group surveyed pre-2007, half reported having saved less than $50,000 and 15% said they have not saved anything! And to confirm, a Yale study discovered that the average retirement plan (think 401k) balance of those over 55 is just $79,200. Woo Hoo!!

Now, we all know what they say about statistics and lies.  But, what if there is some truth to these statistics?  What if it is true about you?  How do you plan to provide for your financial needs in retirement?  Are you counting on some windfall? A large inheritance? Or, Heaven forbid, the lottery?

If your faith is in events such as these to provide for your financial future, your faith is probably misplaced.  Proverbs 13:11 says that wealth hastily gotten dwindles, but those who gather little by little will increase it.

Surveys suggest you aren’t doing enough, and maybe not anything, to accomplish achieving a level of comfort in your retirement. Is it that the goal seems so overwhelming? Is it that you think you’ll just work forever never foreseeing a day when you’ll be too old and frail – bald-headed (like me) passing the time in a rocking chair, cane resting against the wall only an arm length away?

How about changing your vision of retirement?  What if you had the opportunity to work for a non-profit, or a school, but at a lower rate of pay? Could you make that transition? Can you build up the financial resources to take advantage of such an opportunity?

Dr. Robert Butler, head of the National Institute on Aging suggests that time is the ultimate currency and that people who continue to work past retirement age should want more of that as compensation. Wouldn’t it be great to have the flexibility that when you awoke in the morning, if you didn’t feel like going to work, you don’t have to? You are financially independent enough to make that decision.

How are you going to get there?

There is an old riddle of a proverb that goes something like this:

When is the best time to plant a tree?                           Answer – Twenty years ago.
When is the next best time to plant a tree?                  Answer – Today.

Now is the time to act – to save and invest for retirement.  Faith demands action.

Opportunities abound for putting money away for retirement.  An outstanding avenue for retirement savings is your company’s 401k plan. You can defer up to $16,500 of your salary – and more if you are over 50.  If you are not contributing to that plan, begin today. If your company does not offer a retirement plan, ask them to consider adding one to your benefits package. There are plenty of products available to large and small employers alike.

Outside of the company you can accumulate funds in personal and retirement accounts such as IRAs and ROTH accounts.  Contribution limits allow you to put in as much as $5,000 per year. And if you are over 50, you can add an extra $1,000 per year for a total of $6,000.

A professional financial advisor will help you formulate your vision of retirement. Talk to him or her about your hopes and dreams for your financial future. We will help you create strategies that will put you in a position to achieve your goals. More importantly, we will work with you to monitor your progress and keep you on the right path. Take that step of faith today.

Will you Inherit your Retirement?

Will you have enough money for retirement?  How will you get it, by savings? Or do you expect to inherit your retirement? Should this even be a concern? Is retirement worth worrying about?

In Matthew 6: 25-34 Jesus tells us 4 times not to worry.  Our heavenly Father knows we have needs. We know that God does and will provide. But, wouldn’t we be presumptuous if we just sit back and do nothing?  So, what are you doing; on what are you counting to provide for your needs in retirement?

Many of us incredulously count heavily on precarious sources to provide for our old age.  Many expect to inherit large sums that, combined with social security, will generate the income desired to support our current lifestyles.  Let’s see about that.

Social Security?  Really?
Baby Boomers used to enjoy joking about the unlikelihood of social security being there when needed in retirement.  This was a benefit available to past generations, but not for us.  Lengthening the time line of when full benefits are payable is just one imposition that helps confirm that notion.  But, as we Baby Boomers near retirement age, we hope to leave these fears for Generation X, Y and Millennium and claim our due.

It is reasonable to believe that social security benefits will be paid to retirees for years to come.  In 1980, the Federal Old-Age Trust Fund from which social security benefits are paid had a balance of $26 billion.  Today, the balance is over $1 trillion.  So, what’s the worry?  Only two things.

When social security began building its trust fund in the late 1930’s, there were 159 workers contributing for every beneficiary of the system.  There are only 3.4 workers for every beneficiary today.  There have been only 3.4 or so workers per beneficiary since 1970.

Yet, the trust fund balance has grown dramatically.  However, the trust fund can invest only in Treasury securities.  Treasuries are obligations of the federal government.  So what we have is a government program obligated to make payments to covered individuals that gets its money from obligations of the government.  Huh?  Can you say deficit?

Inheritance?  Really?
Now for the bad news: Will you inherit your retirement?  A Federal Reserve study done in 2000 estimated that only eight percent of Baby Boomers would inherit any money.  A recent AARP study was more optimistic.  It showed that 17% of Boomers had already received an inheritance, and that another 15% expected to.  Even so, the median value of inheritance was $47,900.  Less than two percent received over $100,000.  Who can afford to retire on a social security check and $47,900 in the bank?

The reasons for this paltry pittance are obvious.  Health care costs are rising at ever increasing rates.  Even if the government comes up with a national plan, what government agency can we hold up as an example of prudent and efficient fiscal operations?  Plus, with all of the necessary spending in an effort to revitalize our economy, our national debt must put added demands on future cash flow.  And parents are living longer and necessarily spending down accumulated assets. With all the trouble we Boomers caused our parents during the wild and free days of our youth, they are justifiably less concerned about leaving any inheritance.  (Teenagers take note)

So I ask again, Will you inherit your retirement? Will that be enough money?  Are you maximizing your 401k contributions?  Are you contributing to a Roth IRA?  Talk to us, or your trusted financial advisor today about your retirement needs.  We can help you determine what you need to do today, how to align your budget in a way pleasing to God, so that you’ll have financial peace of mind tomorrow.