Ready For Retirement
Ready For Retirement
This Is the Single Most Important Thing You Can Do to Prepare for Retirement
James sits down with someone who’s financially set to retire—mortgage paid off, kids through college, and investments in place—but he’s still grappling with one big question: what’s next?
Instead of focusing solely on financial strategies or retirement planning, James gives him some unexpected advice: start journaling. This led to a deeper conversation about finding purpose beyond optimizing your portfolio.
What would your life look like without constraints? What actually matters most to you? And how can you ensure your future is filled with meaning, not just money?
It’s not just about retiring from something but retiring to a life you love.
Questions answered:
How can I avoid feeling unfulfilled in retirement, even if I have all the money I need?
What are some practices I can do now to flush out what I really want out of life?
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Timestamps:
0:00 - A pertinent conversation
1:53 - Journaling prompts
3:00 - What matters
4:47 - Imagine no limitations
6:43 - Best, second-best, worst scenarios
10:00 - Addressing fears steps 1&2
13:22 - Addressing fears steps 3&4
16:43 - Take action
18:50 - Wrap-up
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I had a really interesting conversation the other day with a guy and I wanted to share it because I think there was some principles and some things we discussed that are applicable to all of us. This is another episode of Ready for Retirement. I'm your host, james Canole, and I'm here to teach you how to get the most out of life with your money. And now on to the episode. Now this particular guy. He was in a position where he had enough money to retire and he knew this. He was also in a job that I wouldn't say that he hated it, but he certainly didn't love it. Financially, as I said, he was in a position to retire. So he had enough money, he and his wife, to fully retire and to replace the income they had to live enough investments as opposed to salary. And he also just had finished paying off his mortgage. He had just finished sending kids to college, sending some money aside for weddings, so he was squared away financially to where he could retire.
Speaker 1:Now he asked me a question. He said James, what should I do next? What's next for me, given where I am? And I think he was expecting an answer like well, start to shift your investment allocation as you're getting close to retirement, shift the way you're invested to make sure that you have a retirement portfolio that can support you. Or maybe he was thinking I would talk about withdrawal strategy or tax strategy. Some of these things are really important, but my answer caught him a little bit off guard. I told him what he should do next is that he should wake up every single day and start journaling. Now, that wasn't the answer that I think he was expecting, but I think he immediately caught on to what I was getting at While he was expecting a financial answer. How can I optimize? How? While he was expecting a financial answer, how can I optimize? How can I do more? How can I improve what I'm doing? And, like I said, those are all very important things I wanted to shift his attention to what do you actually want to do? Because he was in a job, as I said, that he didn't hate, but he certainly didn't love it. It certainly wasn't bringing him any joy, it wasn't bringing him any purpose, any fulfillment, and there was something there that was just good enough not to leave, but it wasn't great.
Speaker 1:And as we started to have this conversation, I shared with him how it doesn't matter if you have $1 million, $10 million, $100 million or more. If you are only focused on optimizing finances, if you're only focused on reducing taxes, increasing returns, doing all these things on the financial side while they can be good if done in proper context, you're missing the greater picture, the greater picture being how can we use our financial situation, how can we leverage the financial resources that we have to create the best possible life, to create an incredible life for ourselves, our family and those around us? And so, as we're having that conversation, I thought it'd be helpful to share some simple prompts that I shared with him that I think all of us would be wise to go through, and maybe you already have a practice like this. Maybe you're already doing things, maybe you already are hyper-intentional about the way that you go about approaching life, but most of us aren't, and especially those of us who are hyper-focused on optimizing finances. Sometimes there's an inverse correlation between how focused we are on finances to how focused we are and how intentional we are about living the life that we want to live. So what we're going to do today is walk through some simple prompts that don't take more than 10, 15 minutes, but if you start to do these on a daily basis, what you'll start to realize is that the way you think about finances shifts. It's no longer all about optimizing finances. It becomes about optimizing life and then aligning your finances in a way that supports that. So let's go through some simple prompts that all of us would be wise to think about, to journal about, as we start to think about what we want most. So the first prompt that I think all of us should think about and spend some time writing down our thoughts is what actually matters to us.
Speaker 1:Now, this seems simple enough, but it can be very difficult, and if you think about what really matters to us, maybe a better way of thinking about that is if I were to die today, what would I regret most? What would I wish I had done that I didn't do? Chances are good, it's going to be. You wish you'd spent more time with your family. It's going to be. You would wish you'd reconnected with some of those friends. It's going to be. You wish you had taken the time to write that book that you always wanted to write. It's going to be something like that, something that really reveals to you what you actually value, because in the face of death. To put it bluntly, that's when our values become most clear and chances are good that if you're going along with that journal prompt of what do I value most and asking the follow-up question of if I were to die today, what would I regret, I doubt many of you would say I regret not staying an extra six months at my job to get the other bonus or for more stock to vest or for whatever the financial outcome might be.
Speaker 1:When we look at things this way, we start to actually realize what matters most to us. So why does this matter? Why does this matter? On a financial podcast, we should be talking about optimizing returns or minimizing taxes or just creating better retirement income strategies. Well, this matters because if you do all those things perfectly, all the financial things perfectly, but never actually understand what matters most to you and never actually pursue what matters most to you, you have a complete failure of a retirement plan, and that's the reality of it. It doesn't matter how much money you have in your portfolio, it doesn't matter how much money you save through the right strategies. If you miss the point, if you aren't pursuing what actually matters most to you, then all that becomes a giant waste. So when we start with this, we can then understand how we can align the things that we're doing from a financial standpoint to pursue what actually matters most to us. But it starts with, simply enough, understanding what matters most to us, so spend some time thinking about that.
Speaker 1:The second prompt that I want all of you to think about is if you had no limitations, what would you do with your life? So imagine a world with no constraints. Now, obviously, constraints exist, but set those aside for a second. Imagine a world with no constraints. What would you actually do? What would a day look like in the life of James? What would a week look like in the life of James? Obviously, fill in the blank with your name. What would you do to be able to look at your life and say that is an incredible life, one that I would be more than thrilled to live out over the next 20, 30, 40 plus years? Where would you live? What would you do for fun? Who would you spend your time with? Start considering some of these things, and this is an important question, because so many constraints aren't actually real.
Speaker 1:Now we go through this routine of work, and here's the thing about work. Work is not evil. Work can be a wonderful thing I'm going to touch upon this a little bit more in a second. But work can be, if we're not careful, a very socially acceptable thing giant distraction from us actually understanding who we are and what we want. What I mean by that is when we spend 40, 50 hours a week pursuing someone else's deadlines, someone else's projects, doing what we're told to do by someone else. It becomes very difficult to actually understand and know who am I and what do I want to do. And so we place these constraints around ourself of if you want to do something fun, it has to be on a weekend, or if you want to take a trip, that's great, but it has to fit within your two weeks of paid time off each year. And before we realize it, this giant world of opportunity around us gets very close and very narrow because we suffer from a lack of imagination, because a lot of that imagination in some ways has just been snuffed out. When you have work and you have your routine and you have these responsibilities, all can be good things. But if we're not careful, they can lead to constraint, they can start to constrain us to thinking this is all there is, and I really can't imagine a life outside of this. So I want to go back to what I said Work is not evil. I love work. Here's actually, if I had to put an order of operations, what's the ideal scenario One, two and three the best case scenario is you love what you do for work and you never retire.
Speaker 1:I know this is a show called ready for retirement, but retirement shouldn't be something that you do If you love your work, if you get to pursue your passion, if you get to pursue purpose, if you get to pursue creativity. I believe we were created to work and work can be a wonderful outlet for those things I just mentioned Creativity, purpose, impact, fun. So work, if done correctly, or if you have a position that you love doing, don't retire from it. That's the best case scenario. You have something that you love doing. You never retire. Now you do make sure that it doesn't crowd out the other things that should be important to you Family, friends, passions, other things that you want to pursue. But the best case scenario is you love your work and you never actually retire. Second best scenario is you don't love your work, but you have a life that you're excited to retire to. You know what you want to do, you know who you are, you know what brings you excitement and you have a plan to stop working at some point so that you can pursue what you enjoy most. Worst case scenario is you don't love work and you don't have a plan of what you want to retire to.
Speaker 1:Unfortunately, I see far too many people who fit into that third option, even this guy that I was talking to. He didn't hate work, like I said, but he didn't love it and it was getting a little bit monotonous. It definitely didn't feel like there was any purpose or impact or anything good coming out of it other than a pretty healthy salary. So this individual didn't love work, but there wasn't something to retire to. So instead of retiring to something, he reverted back to saying what can I do to increase my odds of success? How can I increase the probability of success in the Monte Carlo analysis? How can I rerun projections to see what does this look like if I work another year, or if I save a few more bucks, or if I implement this withdrawal strategy or collect social security at that time instead of this, and what he was doing was he was using work and he was using his financial projections as a distraction from understanding what he actually wanted most. And this goes back to why I'm talking about the importance of journaling.
Speaker 1:Sometimes work becomes big distractions, big socially acceptable distraction, and it's up to us to decide what do we actually want life to look like? And it's great if your work and what you're doing for work is part of what you want life to look like. But if not, then recognize that and start moving towards what you do want. There's a saying that I'll quote quite a bit on this podcast is from Naval Ravikant, where he says the hardest thing isn't doing what you want. The hardest thing is knowing what you want. If we knew what we wanted, it's simple enough to go do that. Problem is a lot of us don't know what we actually want to do because we've spent so long working and being responsible and saving money and raising a family and paying off a mortgage and all these things that we need to do, but one day we wake up on the other side and say I actually have no idea who I am or what I want anymore. So this is an exercise of journaling about if constraints were not a thing, if you could do anything that you wanted to do, what would life look like?
Speaker 1:And the reason this prompt is so powerful is sometimes it's our lack of imagination. That's what limits us most. It's not financial resources, it's not opportunity because we live in an age of abundance. There's so much opportunity out there. It's just the creativity and the imagination needed to start to understand what do I actually want to do in this world of incredible abundance? And then how can I start moving towards that?
Speaker 1:The third prompt I want you all to think about is this what are my biggest fears about the future? Now, why are we talking about this? Why are we talking about fears? We just talked about removing constraint. We just talked about understanding what you value. Well, there's an order to this. Start with number one understanding what do you value most. Step number two understand, or ask yourself in a life without constraints, how would I pursue what I care about most?
Speaker 1:But then step number three is define the fears that are preventing you from getting there. Now, what you'll probably find is a lot of these fears are somewhat vague, somewhat ambiguous, just these floating fears that we can't precisely define. And because we can't precisely define them, they float there and we magnify the significance of them or we magnify the magnitude of these actual fears. But there's a really interesting thing that happens that when you get very specific and you name the fear that you're actually fearing, tim Ferriss has an awesome exercise around this. It's called fear setting. So if you just Google Tim Ferriss fear setting exercise, there's a whole step-by-step blog post that he wrote. It's a really incredible blog post. I encourage everyone to go read it, because all of us face fear about something. Maybe it's retirement, maybe it's starting a business, maybe it's pursuing the next thing that we want to pursue. We all face fears. The interesting thing, though, is those fears, when they go unnamed, get magnified. Like I said, it feels like they're much bigger than they actually are. So by defining those fears, those fears start to lose their power over you.
Speaker 1:Let's actually go through an example, step one and I do want you to Google Tim Ferriss's exercise, because he flushes it out in much greater detail than I'm going to here. But step one he talks about defining the fear. So identify and write down the specific fears. So if you say, oh, I'm afraid of retirement, well, that's not specific. What specifically are you afraid of? You might say I'm afraid I won't have any friends. I'm afraid of who I'll actually be when I don't have someone telling me what to do with my time. I'm afraid that I won't have any purpose anymore. I'm afraid I won't actually like retirement. So, whatever it is, name the fear as specifically as you can. Don't say I'm afraid of retirement. I think a lot of us are honest Even if we're excited about retirement, there is still a little bit of fear there. So, even if we're excited about retirement, there is still a little bit of fear there. So write down that fear and be as specific as you can.
Speaker 1:Step number two start to think about the worst case scenario and how you can prevent that. So what do I mean by that? Well, list ways that you can prevent that worst case scenario of that fear from happening. So let's look at an example of how this might work. Let's assume that in step number one, your fear was I'm afraid I won't have any purpose and I'll spend my retirement feeling bored and lonely. Very valid, a lot of people actually have that fear. List ways that you can prevent that fear from happening or at least minimize the chances of that fear from actually being realized. You could write down I'll join a pickleball league, which will help me to make friends. I'll volunteer at my church, my local food shelter, which will give me a sense of purpose, and giving back. You can say I'll start riding bikes with my neighbor who loves to go on morning bike rides. So you start to write down things that would help to offset or prevent that fear from actually materializing. If you're afraid that you'll be bored and you won't have purpose and you'll be lonely in retirement, that's a perfectly valid fear. But if you just stop there, you're going to give that fear a ton of power and that fear is going to prevent you from doing things. But if you move to the step two of here's some simple things I can do to prevent that fear from taking over or prevent that outcome from being realized. You're going to be in a good position.
Speaker 1:Step number three then how could you repair the damage done if that worst case scenario actually played out? So you're afraid that you're going to be bored and lonely in retirement? Okay, well, what if you did join the pickleball league and you didn't make any friends? What if you started riding bikes with your neighbor and you realized you hated it? What if you did start giving back by volunteering at the church, the food, shelter, and none of it really made any of a difference. Well, what could you then do? What would a fallback mechanism be? Or fallback measure be at that point and you might write down solutions like get another job Maybe it's not the same exact job, chances aren't good that you're going to be able to go back right to where you came from, but you could probably get something, even if it doesn't pay as much or even if the responsibilities aren't the exact same. You could probably get back to where you are. Or maybe you write down just keep trying new things until you find something that works.
Speaker 1:If you haven't already, listen to my podcast I did with Dr Riley Moynes, where he talks about the four phases of retirement Of you retire and it feels like a vacation, everything's great, and then, at some point, you start feeling lost. And you start feeling lost. And it's not until you start experimenting and trying different things that you realize that thing that does click and that thing that does give you purpose in the ability to actually feel like retirement is everything you hoped it would be. So back to this. One of the things could simply be an attitude that says I'm going to keep trying things until I find what it is I actually enjoy doing. And then step number four in this exercise and to me this is the most important step.
Speaker 1:The fourth step is consider the cost of inaction. So evaluate the negative outcomes of what. If you don't do anything, where are you going to end up? Now, if I go back to our example of saying I'm afraid I won't have any purpose and I'll spend my retirement feeling bored and lonely If that's my fear, but I don't take any action, well, that also has a cost. So what might that cost be? Well, maybe I stay in this job and this job gives me no purpose. So I still don't feel any happier. I didn't feel any better. But I stay in this job for another 10 years and at some point a health event forces me to retire because my body's just shutting down.
Speaker 1:And by that point I look back with a tremendous amount of regret on all the years I wasted away continuing to work at a job that I hated, simply because I was too fearful to take that step into doing what I actually wanted. Now. Too fearful to take that step into doing what I actually wanted Now. When I look at that, that scares me to death. Now I'm not even close to retirement, I'm 35, but even just reading that puts a pit in my stomach, thinking how horrible would it be to stay in something you hate doing, knowing there's a very good chance? You look back at some point and just have the sense of regret wash over the entirety of your body. I'm saying, wow, I was too afraid to pursue something, so I stayed in this thing that I hated, but at least it was this known evil. And one day I wake up totally unfulfilled, feeling like I wasted some of the best years of my life and now I'm too old or too unhealthy, or too you fill in the blank to actually start doing what I want to do.
Speaker 1:So that fourth step is very powerful, because what it starts to do for you is it clarifies your options. Sometimes we feel like there's only one risky option. The reality is, both options are risky. To this example, retiring is a little bit of a risk. I don't know what I'm gonna do to not feel lonely. I don't know what I'm going to do to feel that purpose. But sometimes we look at that and say, oh, that's the risky option. Staying where I am is safe. Well, staying where you are is probably the most risky option in this example.
Speaker 1:But it's not until you go through an exercise like this to say what is the cost of inaction when might I end up in this case, that you realize the gravity of the decision, or the lack of the decision that you're making? And then, finally, the last step in the fear setting exercise is just to take action. So look at those insights. Now you might come up with a point where you say you know what the cost of trying this new thing, or the risk of this new thing is actually greater than the risk of staying where I am. That might happen. My guess is that's fewer than 1% of the times that you actually go through an exercise like this. In the overwhelming majority of instances where you go through an exercise like this, you will see that the biggest risk, the biggest threat to your future well-being, is staying exactly where you are and not pursuing that thing. That's scary. Change is always scary. It's always easier in the moment to stick with what you're doing, but it's not until you frame the choices correctly the risk of each choice, the potential payoff of each choice that you make, decisions that are actually going to be beneficial for you long-term.
Speaker 1:So the fifth step is to take action. So the final journal prompt I would encourage you to go through is just that what is one step I can take today to move closer to my goals? There's a quote by Benjamin Disraeli, and his quote says action may not always bring happiness, but there's no happiness without action. What does he mean by that? Well, you're not guaranteed to have the next thing that you try automatically click. If you're fearful of retirement and not having purpose and you say you know what, I'm going to go join that pickleball league. It might work, but it also might not. You might say that was a bust. I hate pickleball and I didn't like any of the people playing it. That might actually happen, but if you don't take action, you're 100% not going to find what it is that you're looking for.
Speaker 1:So how can we commit to taking those actions? How can we embrace this mindset of what's one thing I can do today and, by the way, this is not just a journal prompt that's limited to people who are about to retire. This is a question, that question being what's one thing I can do today to move closer to my goals? You can do this with relationships. You can do this with finances. You can do this with retirement. You can do this with a new hobby. You can do this with so many different things.
Speaker 1:The goal of this is to say how can you act with intention, how can you understand what matters most to you and how can you take one step closer to that without being overwhelmed with the deadlines that you have, the projects that you have, the social media notifications, all the things going on around us? What's one thing you can do to move closer to your goals? So that was my conversation with the individual. Obviously, we didn't go through it step by step like that, but that was the gist of it Of, yes, it's good to be in a good financial position, it's good to save money, it's good to invest, it's good to think about all the different things you can do to optimize your finances, but at the end of the day, you've optimized everything financially and haven't actually considered what you want to do or why you want to do it. That's a complete failure of a financial plan. Financial plan should always start with an understanding of who are you and what do you want to do. What does success look like? And then, how do we position, your assets, your income, all the different financial resources you have to fully support that vision that you have. So that's all for today.
Speaker 1:I know this is a non-traditional episode, but I think this should actually be a much bigger part of every financial conversation. What are we actually trying to accomplish? So I hope that was helpful. If you are enjoying the podcast, we'd appreciate you leaving a review. If you're not watching on YouTube as well, make sure that you check out our YouTube channel, where we have this podcast as well as other videos coming out throughout the week, as always. Thank you for listening and I'll see you all next time.
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Speaker 1:Nothing in this podcast should be construed as investment, tax, legal or other financial advice. It is for informational purposes only tax, legal or other financial advice. It is for informational purposes only. 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 with 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.
