Ready For Retirement
Ready For Retirement
This Is Why Financially Ready People Struggle to Retire
Even with a strong financial plan in place, many professionals find themselves hesitating at the retirement decision—stuck in the cycle of “just one more year.” The numbers say it’s possible, yet the fear of leaving behind a paycheck, a title, or a sense of purpose keeps them working long past the point of “enough.”
This episode reframes retirement readiness through the lens of the five dimensions of wealth: financial, time, physical, social, and mental. Financial wealth is just one piece. Time wealth—measured in the limited seconds of healthy, vibrant life left—is often the most undervalued. Physical health determines whether retirement years are active or restricted. Social wealth, built through decades of relationships, directly impacts longevity and joy. And mental wealth—peace, clarity, purpose—often gets sacrificed in the name of financial optimization.
For those who’ve diligently saved and planned, the biggest risk may not be running out of money. It may be running out of time to fully live.
Explore how shifting the question from “Can I afford to retire?” to “What am I giving up by staying?” can lead to a more fulfilling path forward.
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The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.
Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements
Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.
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In today's video I'm going to give you five reasons. It might be time for you to retire right now. But before I do so, I want to first illustrate why it's so difficult for people to make this retirement decision in the first place. I wrote to a lot of people and I remember specifically a couple years back I was meeting with an individual who had saved lots of money for his retirement. By all measures, by all means, by all objective standards, this person was in a great position to retire, but the challenge was he was in a great position to retire, but the challenge was he was in a very high-paying job. He'd worked years and years and years to get to this point and every single year he continued to work. He had more stock fest, he had another bonus that he would receive, he would pay more into social security, he would max out his 401k and it became very difficult for this individual to retire. And what I started to realize about this situation is this individual, much like many of us, was optimizing for one very specific type of wealth. What so often happens is we look at financial planning, we look at retirement planning and we think that it's a math problem, and that math problem says the more I can optimize, the more I can improve, the more I can build my portfolio, my savings, etc. The better off I'm going to be.
Speaker 1:Now this individual had gotten to a point where his financial wealth, his ability to retire he was there, but it was very difficult to pull himself away from work knowing how much he'd be leaving on the table Every year. Longer he worked, his Monte Carlo probability of success increased. His ending portfolio balance increased. His portfolio balance today increased. So why should he walk away? Well, I'm going to go over the five reasons I believe this individual should walk away and as I go through this, I'm going to walk through this through his specific context. But I think these principles are relatable to all of us, and these principles have to do with the fact that there's different types of wealth.
Speaker 1:We need to look at wealth not just from the financial side, but from a truly holistic standpoint, and the first thing that I would look at with this individual when recommending that he retire was the concept of time wealth. Yes, we can look at financial wealth, and that's what we always do. That's your portfolio balance, that's how much you have in cash, that's your financial position, but time wealth is something that becomes increasingly more important the older you get. We all look at Warren Buffett and we say, well, warren Buffett's a billionaire, look at how wealthy he is. But there's this concept of a time billionaire. A time billionaire is an individual who has at least a billion seconds of life remaining. Now, one billion seconds of life roughly translates to about 32 years. So those of you that are maybe 60 years old, if we have a life expectancy of, say, 92, that means you have about a billion seconds left. So you take a Warren Buffett with a net worth of billions and billions and billions of dollars. My guess is he would be willing to trade all of that to get the time wealth that you have remaining in your lifetime.
Speaker 1:So if all we're looking at is the financial side of things, if we're just looking at how can we optimize the numbers, what you're going to do is you're going to end up at this point where you have optimized everything. You have a wonderful portfolio, a wonderful net worth, but you no longer have any time left to enjoy it. So the concept of time wealth is, yes, you can over optimize your financial wealth and miss out on time. None of us has any idea how much longer we have left, and time is only non-renewable currency. You can always go back to work if you need to. You can always earn more money if you need to. Sure, it gets harder to do the older that you get, but you always could to some extent if you needed to.
Speaker 1:Time is something we never know how much longer we're going to have. So if all we're looking to do is optimize the financial side of things, then what we're going to do, even if it's unintentionally, is we're going to start to squander our time wealth. So how much are we willing to trade off in terms of more financial wealth in exchange for missing out on that time wealth? And don't just think of time in terms of how much longer do you have to live. Think of it through the lens of how many more holiday seasons do you get to spend with your parents? How many more vacations do you get to have with your family before your kids or your grandkids they start getting married and having families of their own, and it gets more and more difficult to get the whole family together to do things. Time is this very finite, limited resource that, if we're over-indexing, over-optimizing for the financial side of things. We're not paying enough attention to time. If we don't have time, it doesn't matter how much money we have, we're not going to be able to enjoy it.
Speaker 1:The second reason that this individual I think it was time for them to retire was the sense of health. Physical wealth Doesn't matter how much money you have. If you don't have your health, if you don't have your physical well-being, you're not going to be able to enjoy it. There's this saying that a healthy person thinks of a thousand things, a sick person thinks of just one. So when you're that physically healthy person and you're optimizing for the financial wealth, don't neglect your health.
Speaker 1:As soon as you lose it, as soon as you become very sick, as soon as you deteriorate beyond the point that you can recover, none of the financial side is really going to matter. Sure, some matters of do you have enough to afford long-term care? Do you have enough to fund some of the medical procedures that you might need? But beyond that, what good is that wealth actually doing for you? So if all we're doing is focusing on the financial side of things, optimizing the financial plan, we're missing out on the reality that a healthy body is going to be the thing that enables us to actually enjoy all this, the thing that actually allows us to pursue what we want to pursue, to spend time with the people we want to spend time with, to actually enjoy what we've accumulated and what we've grown on the financial side.
Speaker 1:So the second reason I believe that it was time for this individual to retire was so that he could prioritize his physical wealth. He was in a very high paying job, but that was taking a toll on him Long hours, stressful deadlines, was not able to prioritize his health, and if he did that long enough, he wouldn't actually be able to ultimately enjoy his wealth. The third reason I believe it was time for this individual to retire was to prioritize his social wealth, and so I think you can start to see a theme here. There's different types of wealth and, by the way, many of these principles come from a book called the Five Types of Wealth. Check out that book. I have no relation to it, but it's a wonderful and a powerful book if you want to properly set these things in proper perspective of understanding that wealth isn't truly just a financial thing, but it's going to encompass many different aspects of your life. So back to social wealth.
Speaker 1:This individual earning a lot of money, continuing to work, large bonuses, large stock vesting very difficult to walk away from because all he saw was his financial scorecard was increasing Every single whole year. He worked longer, he was getting better off financially, but from a social standpoint, you cannot create a best friend overnight. You cannot invest in was increasing Every single whole year. He worked longer, he was getting better off financially, but from a social standpoint, you cannot create a best friend overnight. You cannot invest in relationships and have those flourish overnight.
Speaker 1:What I see too frequently is, by the time that people retire, one of the scariest things to do is what am I actually going to do when I retire? I don't have the friendships, I don't have the relationships, because all of my time was spent working. All of my time was spent either caring for my family, managing responsibilities or doing the things I need to do at work, which are all very important things. But if we're not investing in relationships now this includes family Ideally your first priority should be investing in your family, but what are the other relationships you're investing in? Those aren't things that are going to blossom and flourish overnight. What can you begin doing today so that you have those strong social support structures for the rest of your life. Many, many, many studies highlight the importance of your social well-being. In fact, one of the largest indicators or predictors of your overall quality of life and longevity of life is going to be the strength of your relationships. So if you don't have those, it's not going to matter how big your portfolio is if you don't feel as if you're in a position to actually enjoy your retirement, to have the happiness that comes from strong social relationships. So this individual is not simultaneously able to continue working to optimize financial wealth and also optimize his social wealth. Sometimes you can do both. If you can do both, wonderful. But if you are in the position where you're like this individual and you're over-optimizing for the financial side and other areas are suffering, it might be time to retire so you can prioritize what really matters.
Speaker 1:The fourth reason that it was time for this individual to retire was so that he could prioritize mental wealth, as I've already mentioned a few times now. Wonderful compensation, wonderful financial benefits for continuing to work, but it was taking a major toll on him emotionally. His ability to have a calm mind, his ability to live stress-free, anxiety-free, was inhibited by this work. Sometimes these things aren't mutually exclusive. Sometimes you can have a very high-paying job and you can have a calm mind. You can have an anxiety-free lifestyle. In this particular instance, that was not the case. So for every step he took forward to optimize his financial well-being, he was simultaneously taking a step backwards in terms of his mental well-being.
Speaker 1:One of the things that I'll often say is the sign of a good financial plan is a life well-lived. A life that's filled with anxiety, a life that's characterized by constantly being on edge, losing sleep, not feeling your best that's not a life well lived. So how do we prioritize our mental well-being, our ability to pursue the things that light us up? Now, a lot of these things are intertwined Our relationships, our health, our mental well-being all of these things aren't mutually exclusive. They all support each other. So what we're looking at here is what are the things that we can do to support all of these things? And in many cases, all of these things are difficult to do when working those high stress, high paying jobs.
Speaker 1:Now here's the final reason it was time for this individual to retire. He was in a financial position to do so. He already had the financial wealth he was in a position to where we looked at his goals, what he wanted to do. He was there. He could retire today and do all those things. The trap that he was in was he could work longer and do even better. The trap that he was in was his whole life. He thought about how do I build, how do I grow, how do I save, how do I optimize? And he was truly optimizing, but just for the financial side of things.
Speaker 1:So what my guidance to him was, as we look at these five reasons, wasn't stop optimizing. It was by optimizing for the financial side of things, the other areas of your life that are going to be more indicative of a higher quality of life you are simultaneously letting those deteriorate. You're letting those areas slip. And so when you look at this holistically, it doesn't matter how optimized the finances are. I don't care if your portfolio value today doubles or triples or quadruples.
Speaker 1:If that happens, will all these other areas of your life suffer? You're not going to be happy, you're not going to have that life. Well-lived. That, I say, characterizes a good financial plan. Now, this would be dramatically different if this person was very undersaved, if they had no money. You have to make the sacrifices to get to that position where you are financially able to retire. So all this is under the assumption that you've done what you need to do, or you're on track to do what you need to do to be financially okay.
Speaker 1:But the financial side of things should support the other areas of your life, should support the other types of wealth that you should be pursuing. It should never take the place of them. So how can you start to view life through this lens of all these things? In some regard should be like a scorecard. When you look at a decision, what's going to be the impact of that decision on your financial wealth? You absolutely should look at that, but don't neglect to also understand what is the impact of that decision going to be on your mental wealth, your physical wealth, your time wealth, your social wealth.
Speaker 1:When you look at all these things and again I'm borrowing these terms directly from the book the Five Types of Wealth, it's a great way of framing it when you look at every decision through, how is it going to impact these things? You're going to make better decisions. You're going to make decisions that don't only optimize the financial side of things, but they'll optimize for overall well-being, for overall quality of life, so retirement isn't something that everybody needs to do. But if you get to the point where you are starting to make decisions purely for the financial side of things and letting everything else slip, then I would encourage you to take a look at these five different types of wealth to help you understand what decisions you should be making today to prioritize your overall well-being in the future, their money. Be sure to visit us at wwwrootfinancialpartnerscom.
