Ready For Retirement

Ask Yourself This Question to Transform Your Retirement

August 01, 2023 James Conole, CFP® Episode 174
Ready For Retirement
Ask Yourself This Question to Transform Your Retirement
Show Notes Transcript Chapter Markers

What do you think is the key to a successful retirement?

By asking yourself the right questions and being intentional about using money to enrich life, you can live more presently in the moment and enjoy a meaningful and successful retirement.

James explains the most important question to ask yourself so that you can transform your retirement.

Questions Answered:

How do you get the most out of life with your money by living intentionally?
How do you live intentionally for a more meaningful life?

0:00 Intro
2:37 The email
6:42 The responses
9:46 Points to note
12:03 Steph’s story
13:35 Important things to think about
15:30 Outro

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Speaker 1:

What do you think is the key to a successful retirement? Is it the right investment allocation? Do you think it's having the perfect budget? Is it maybe collecting Social Security, or implementing Roth conversions at the perfectly right time? Well, while all these are important, none of them are the most important in my opinion, and in today's episode of Ready for Retirement, I'm going to share with you what I do believe is the most important, and it's a very simple question that has the potential to transform your retirement. This is another episode of Ready for Retirement. I'm your host, james Cannell, and I'm here to teach you how to get the most out of life with your money. And now on to the episode. Today's episode was inspired by something slightly different than typical episodes are. Typically, we answer a listener question on these episodes, but I just returned from an amazing family trip to Colorado, where it was myself, it was my parents, my wife and my daughter and on that trip I was reflecting how grateful I am to have married Ashlyn, who's my wife, and I'm grateful for many reasons, but one of which is she spends so much time planning trips that the whole family loves, and these are trips that are filled with moments that become memories, and these are memories that we're going to cherish forever, and one of the many reasons I'm grateful for this is that I personally I'm not naturally hardwired to live in the present moment or even spend money on things that are meaningful today, with my personality type and thankfully, this has changed a bit, even since being married. With my personality type, if I have a few extra bucks, I'm inclined to invest them. If I have a few extra hours in the day, I'm inclined to use them, working longer. And if, given the option of being present today or planning for the future, too many times I default to planning for the future. Now, that's not to say I don't live in the moment and don't spend money on things today and don't spend time with family and friends, but it's more of an intentional effort on my part to do so, because I'm hardwired to think in the future and to plan for the future, and because of this, a lot of times I have to check myself and say, okay, james, play this out. Over 20, 30, 40 years, you've grown the business, you've grown your portfolio, you've grown your financial independence, but to what end? Well, so I can spend more time with family, or so I can take more vacations or so I can buy more of the things that I want to buy, and then I have to ask myself well, what's stopping me from doing that today? So this, along with many other reasons, is one of the reasons I'm so grateful for Ashland. She prioritizes family time, she prioritizes these trips, she prioritizes these experiences that all contribute to the richness of life. And I'm not telling you this just to say hey, here's a giant monologue about my wife, but what I am telling you this for is it sparked something? Or it made me think back to a recent email that I sent out to clients. Now, sometimes these emails I send are more notes to myself than they are to clients in terms of how can we live better, invest better, plan better, but all ultimately to have a richer, more fulfilling life. So I'm bringing up this email and I want to share with you both what I asked to a bunch of clients and some of the responses that I received, because I do believe this is the fundamental thing we need to get right in our retirement planning If we want an incredible retirement and if we want an incredible life. A lot of that starts with intention, and intention begins with asking the right questions. So what I want to do in this episode is I'm going to read to you the email I sent to clients and I'm going to read with you, or read back to you, some of the responses I received from clients, in the hopes that it prompts some of you to ask the same question and start to play out what those responses look like, so that you can start living better today. So to start, let me read to you the email, at least a paraphrased version of the email. This is what I sent to clients. I said this. I said if you ask the average American how much it takes to feel wealthy, the answer is about $2.2 million. If you ask a group of millionaires how much it takes to feel wealthy, the answer is about $7.5 million. It appears, at the point at which we feel wealthy depends a great deal on where we are today. There was another story from a few years ago that asked people to approximate how much money would be required to feel comfortable. The consistent answer, across the entire spectrum of net worth, was about twice their current net worth. And, although it's likely apocryphal, there's a story about the wealthiest American to ever live, john Rockefeller, being asked how much money is enough, to which he responded just a little bit more. If this was the case for Rockefeller, what hope do we have? It seems likely that we'll always need just a little bit more. It goes to show that finding comfort with our respective levels of wealth can be a perpetually elusive target, and the problem with never feeling comfortable is that it can sometimes cause you to refrain from doing things that might actually make your life better or more fulfilling. And given that my job, as I see it, is to help you live a life that is as fulfilling as possible, I want to use today's note to explore opportunities that may truly make your life better. I'd love it if you spend a little time pondering the following question what are a few things you have always wanted to do or to buy in your life that you have not done or bought, for whatever reason? And if you're married, what about for your spouse? I'd enjoy exploring it if we can make it a reality sooner rather than later. And that's the end of the email. So I know I read a lot in there. A lot of that was just background building up to the question, but the real question was what's something you've always wanted to do or to buy, and then why haven't you done so already? And once I sent that email, I got a great deal of feedback from clients and the results were very interesting to see. And why was that? Well, many of the things that people said they wanted and this was subconscious, I think. In most cases they were assuming that they wouldn't do these things until they retired, or at least until the time was right, which always seems to be sometime later, but definitely not right now. So I want to offer you some of these responses because they can help to trigger desires in your own mind, because a lot of times, the hardest thing isn't doing what you want, it's sometimes just knowing what you want. So I hope that by offering some of these examples, it might stir up some thoughts in your mind. And the reason I say this is the most important part of your retirement is because, if you get to the end of your life, it will not matter how large your portfolio is, it will not matter how many millions of dollars you saved in taxes through the right tax strategy, it will not matter how much you maximize your social security benefit. If you're unhappy and if you look back on regret because of the things that you didn't do. None of that will matter. What does matter is living intentionally, and living intentionally comes down to asking yourself the right question, which is what do I actually want, what do I want my life to look like, and how can I do the things that align with that so that I can have that more fulfilling, more enjoyable retirement? Hey everyone, it's me again for the Disclaimer. Please be smart about this. Before doing anything, please be sure to consult with your tax planner or financial planner. Nothing in this podcast should be construed as investment, tax, legal or other financial advice. It is for informational purposes only. So let's take a look at some of the responses I received from clients when I sent out this email. Now, some are exactly what you'd expect. One client said she said James. One of the first items that comes to mind is I would love to stay in an overwater bungalow, perhaps in the Maldives, fiji, tahiti, bora Bora or any other destination that offers this luxury. Another client says I'd like to go to an SEC football game, or I'd like to watch a game at Yankee Stadium in Fenway Park, so two iconic baseball stadiums. Now here's the interesting thing with these, I think, when I ask people, what do you want to do in retirement? They say, oh, I want to travel. But then you think about it. You say, well, why only in retirement? Why not start doing some of these things today? Today, when maybe you have more of your health, more of your energy, the financial means to do so? And when we think about it that way, one of the reasons that we say we want to travel in retirement is because it's a sense of procrastination, of I'm just not getting around to it today. And, to be clear, there are obviously financial trade-offs for doing this. The more you spend on stuff today, the less you can save for retirement. But the interesting thing with these specific client responses is, for these clients I've either met with them already or will do so in the future. But in these cases this was something that did not have to be deferred until retirement. This is something that did not have to be deferred until some indefinite point into the future. These are things that could very much start happening now. So one of the reasons I'm sharing this is because, like I mentioned at the beginning of this, this is my natural inclination as a person. Is it so easy to get in a rut and it's a healthy rut in some ways of save to the 401k, save to the Roth IRA, put in the time at work, plan, prepare, do all these things so that you can travel, so that you can enjoy life, so that you can do an engaging experience that are meaningful to you. But if we're constantly in that mindset of these experiences and this travel and these things that we want to do are in the future, then you're losing out on some of the richness of life along the way. So that's why I love some of these answers is, once we really start to understand what we're doing it all for, we can then ask ourselves why is it that this isn't until my retirement, at least in my mind? Why isn't this something that I could do sooner rather than later? And many times this is something you can do sooner rather than later. Now there's absolutely a financial trade-off, and I just mentioned that. So that's why it's so important that you have a financial plan, that you have an understanding of what's required to meet your goals. But also, how do you ensure that you don't pass up on these amazing opportunities and amazing experiences before you retire, to make sure you have that more well-balanced life? So those were just a couple examples I received from clients A lot of other clients that emailed me back and they said I'm just not quite sure. This is a really good question and we spent so much time saving and investing and planning financially for retirement that it's difficult to actually think about what would we want to spend money on. One client said this and he put it really well. He said it's not easy to shift from savings mode to spending mode. I think we'd like to travel. There's an Arkansas home, charity, work, self-improvement, they all come to mind, but let's discuss this at our next meeting. So that's another reason I want to talk about this now. Many of you might be thinking, gosh, I've spent so much time just thinking about making more money or saving more money. You're investing more money. I haven't done as much thinking or planning around. Who am I? What do I enjoy doing? What is it that I want out of life? So sometimes you're not going to have an immediate thought here of I want that new car or I want that vacation or I want this experience. If you do, great, you have a very easy goal and easy target and you can start to quantify what will that cost and when can I realistically do that? But if not, then these are healthy questions to begin pondering. What is it that I want to spend money on? Money is just a tool. Money is not the goal by itself. So how can I understand how to best use this tool? Well, to understand that, I need to understand what I want my future to look like, or, heck, even, what I want my present day to look like, so I can make sure my money is aligned with that. So understand that that is sometimes difficult thing to even recognize. What do I want to spend my time doing? What do I want to spend my money on? But it is crucial that we start to think through those things, because this next response I'm going to share highlights the somber reality of what could happen if we don't. Another client, in response to this email that I read you, said this. She said my husband and I had dreams of traveling throughout Canada by train, continuing our love of trout fishing and just being together and enjoying life. Unfortunately, he passed away and I would give anything to have him with me now. So this is obviously the most difficult part of planning and the most difficult part of life is it's unpredictable. None of us are guaranteed tomorrow, none of our spouses are guaranteed tomorrow. So the last thing that we want to do is defer everything to some indefinite point in the future and then realize one day that the opportunity to do those things that we love, or those opportunities to do the things that we really cared about and create memories, those aren't going to be around forever. So how can we, in a responsible way, balance planning for the future but also doing the things we want to do today because we're not guaranteed tomorrow? So I know a lot of people in that situation and that's a sad, unfortunate reality of this world that we live in. And that is why, as a financial planner, it's not actually the money that I care about, it's how can we use our money to get the most out of life. And I think this last story, this last response that I want to share, highlights this perfectly. It's just the perfect example of how do you use money to get the most out of life. And this comes from Steph, and Steph gave me permission to share this. She said this in response to my email Many years ago 2006, I believe, when Dave's great aunt passed. She unexpectedly left us $30,000. We were shocked and blessed. We obviously considered investing it, but instead we bought a boat. Yep, we bought an old 1974 fishing boat and kept it in Dana Harbor. This changed our quality of life. We had some of the most relaxing times, some hard and some scary times. It was hard work keeping it clean, safe and functioning. Crazy fun times, romance, adventure, seeing David the Helm using his Coast Guard navigation skills. We made incredible family and friend memories on that boat. We connected with nature. The memories are endless. We sold it when we bought the farm. We miss it in a lifestyle. Often that is our spin story no regrets whatsoever. Sure, we could have invested responsibly into the market, but, like you said, it's all relative and the value of that boat season is priceless to us. So this was an absolutely perfect answer to the question that I asked of how can you use your money to enrich your life. What's one thing you could purchase today to do so? Now, obviously, in Stefan and Dave's example, that wasn't something they purchased today. This was an example from 15 plus years ago. But this illustrates what good spending can do. So often we talk about good investing and good planning and good deferring, but there's also such thing as good spending. We don't invest and save and plan forever just so that we can grow the largest portfolio. We do that so that we can do the things that are meaningful to us and to others and impact those around us in a wonderful way. So, as you're listening to this, maybe right off the bat, when I ask the question, what's one thing you can buy or do that will immediately add quality to your life, you might have an answer right away. Or some of you might be more like me, or, without the help of my awesome wife, it would be difficult sometimes for me to bring myself to spend, even though I know how important it is. So, whatever the case might be, some of you know this on your own. Some of you need someone else to pull it out of you. If that's you, I hope this episode is the thing that's going to help pull it out of you. So your homework for today is to do this Turn off the podcast, turn off social media, turn off the news, turn off any distractions. Just spend a couple minutes thinking what's one purchase I could make or what's one thing I could do. Well, it might not even cost money, but that would add quality to my life or would add richness to my life. For me, it was an amazing trip we just took to Colorado with family. I know there's going to be some memories there that I will remember forever and look back fondly on. For Steph and for Dave, it was using that $30,000 they unexpectedly received as an inheritance to buy a boat, and the memories and the adventure and the experiences that created for them. For you, it might be travel. For you it might be a different experience. For you, it might be something you've been looking to buy for a long time now. How can you work that into your plan so that, yes, we need to prepare for the future, but, yes, we also need to make sure that we're living today and finding the appropriate balance between those two? So I hope this episode has helped. I know this is a little different than what we're typically talking about. What we're typically talking about is maximizing returns or saving taxes or when to collect social security or all those things that are important, but only in the context of living better. We're living in the context of getting more life out of your money. So ask yourself this question and then be intentional about doing the things that will lead to better living. So that's it for today's episode. Thank you, as always, for listening and I'll see you all next time. Thank you for listening to another episode of the Ready for Retirement podcast. If you want to see how Root Financial can help you implement the techniques I discussed in this podcast, then go to rootfinancialpartnerscom and click start here, where you can schedule a call to one of our advisors. We work with clients all over the country and we love the opportunity to speak with you about your goals and how we might be able to help. And please remember, nothing we discuss in this podcast is intended to serve as advice. You should always consult a financial, legal or tax professional who's familiar with your unique circumstances before making any financial decisions.

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