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Live for Today? Save for Tomorrow? How About a Little of Both

by on September 29, 2020 5:00 AM

“Be happy while you are alive because you are a long time dead.” – Scottish Proverb

Before you think this column is only for those of us with gray hair and degrees in Advanced Life Experience, I would encourage readers of all ages to remember one of Dr. Stephen Covey’s 7 Habits of Highly Effective People: Begin with the end in mind. It’s never too early, or too late, to think about how to live your life, especially in retirement.

Hopefully we will all reach the so-called “golden years” physically and mentally healthy and financially prepared because we took the right steps along the way. I know what some of you are saying, “Life is too chaotic and unpredictable. Why should I worry about planning for retirement when I can hardly get through the day?”

To those of you anti-planners I remind you of this timeless advice: “Failing to plan is planning to fail.” If you don’t do your research and talk about your money, especially your retirement planning, then you shouldn’t be surprised when it doesn’t work out.

I will repeat a few statistics from a previous column to help nudge you into taking the time to get your financial act together. 

  • 78% of Americans live paycheck to paycheck (2017 Harris Poll)

  • 70% of Americans have < $1,000 in Savings (2016 GoBankingRates.com)

  • 56% have < $10,000 saved for retirement (2016 Money Magazine study)

According to a 2019 CNBC article by Jessica Dickler, 75 percent of Americans are winging it when it comes to their financial future. 

“Despite reports that many workers are living paycheck to paycheck and not even half of all adults would be able to cover an unexpected $1,000 expense, the majority of Americans are declining any financial help or advice,” a survey found. 

Is it any wonder we are so bad at handling our money when we either do it haphazardly ourselves or pay no attention to it all?

My advice is to consider getting yourself a certified financial advisor who can coach you about your money. “There’s a common misconception that you have to have wealth to work with an advisor and that’s not the case,” says Bill Van Sant, a certified financial planner and managing director at Girard outside of Philadelphia.  

I understand that some of you prefer to invest and manage your own money and for those of you who feel educated and confident enough to do it your way, my hat is off to you and all the fees you are saving. But if you are like the vast majority of Americans you have little training in personal finances and don’t give nearly enough attention to your money.

“It’s better to live rich than to die rich.” – Samuel Johnson, English author 

Should you spend your money to enjoy life now, save it for retirement, or have a balanced approach? I recommend you read “Die with Zero: Getting all you can from your money and your life.” by Bill Perkins. It is a common-sense guide to living rich instead of dying rich. Perkins talks about the importance of not over-saving while under-living.

Perkins is not a hedonist that thinks you should selfishly spend every dollar on yourself.  On the contrary, he is an advocate for giving. He just believes it’s better to give while you are alive so you can share in the joy of your charity. The goal is for the last check to bounce because you’ve used your money to do what you always wanted while you lived a meaningful and purposeful life. Take your whole family on a trip to remember that they will talk about long after you’re gone.

Regardless of where you fall on the “live for today or save for tomorrow” spectrum, eventually we all hope you will reach retirement age (assuming you even desire to retire at all in the traditional sense). Now you have a whole set of different questions to answer.

Can I retire early? Should I retire at 62, 67 or 70? If you Google “When to take your Social Security” you will get conflicting advice. Some say don’t take Social Security until you’re 70 when it pays you the most. Some take it when you're 62. Others say wait until your FRA (full retirement age) – 67 for me. Most people take their Social Security at 62 simply because they need the money to survive. Others choose to take it as soon as possible for fear it may not be available in the future or because they are not confident that they will live a long life. 

Absolutes rarely work, as too many variables exist and because this is such a personal decision. For instance, if you decide to retire before Medicare kicks in at 65, what options do you have for your healthcare? 

“I contribute to my company's 401(k) retirement program, up to what they will match, and I will get Social Security. Won’t that be enough for my retirement?”

I answer that with a great big “It depends.” This is a highly individual decision and there are a lot of factors. Have you ever sat down and visualized what you would like your retirement to look like? What is your risk tolerance financially? How much debt have you accumulated? Do you have any pre-existing major medical expenses? Have you mapped out a retirement budget? Do you want to move to a retirement community or live near friends and family? Are you philanthropic? Do you want to give any money to your children or grandchildren?  

Again, these are highly personal questions and depend on how you have prepared for retirement. This would all be so much easier if you knew your expiration date. According to U.S. News and World Report, female life expectancy as of 2017 was 81.1 years, while male life expectancy was 76.1. However, when you factor in education and race, the average life expectancy number for me as a white, college educated male jumps to 82 years, according to the Organization for Economic Co-operation and Development. My father is currently 88, my mother is 83, and my grandmother lived to 93. My wife’s parents lived to 86 and 96 respectively so we certainly need to factor in family history as well.

My hope would be to live into my 90s with full mental capacities and good physical health and to suddenly keel over in the middle of my backswing on a golf course. But given my history of injuries and concussions from my younger days, I am thinking the “golden years” are 62-78.

The key takeaway from this column: You have to ask these crucial questions and discuss with your loved ones, and do it sooner than later.

Some people are afraid if they retire too early, they will suffer from FOROM: Fear of running out of money. I personally don’t care if I am eating off of fine china in some overpriced nursing home at 90, so if I run out of money I can read, do crossword puzzles and watch old movies. My personal philosophy is to retire early and live an active lifestyle until my body says, “Enough!” COVID-19 has simply solidified my desire to place a greater value on my time, freedom and flexibility than on accumulating more stuff.

Why have I become so concerned about retirement all of a sudden? Well, perhaps a little paranoia is setting in due to COVID-19 and since I have read about so many of my high school classmates passing away. A former hockey teammate passed away at 57 and too many of my friends from college are battling serious ailments, including cancer. A friend who spoke passionately about his plans for retirement, suffered a massive heart attack and passed away just weeks before his last official day of work.

My wife and I think we have checked all the “a little of both” boxes pretty well. We have lived a good life so far. All three of our children will have graduated from college debt free. I’d like to think we have been fiscally responsible, saving for retirement while enjoying life. Now comes the supposed payoff: the golden years.

The goal for me is to make retirement the most meaningful, vibrant and fun period of my life. I have friends who look at me and say, “Who are you kidding? You’ll be working your whole life. You would be bored without work.” Ugh. I am sorry I have left some with that impression. I’d like to think I am more than just my work. Of course, I won’t stop being productive. I’d like to write more books, deliver more pro bono speeches and devote more time to making personal finance mandatory for high school graduation.

Retirement will allow me to do it on my schedule and at my pace and from wherever I wish to be—or more pragmatically, where my wife wishes to be! 

What does a fun and active retirement look like to us? To travel nationally and internationally at least once a year for as long as we can handle it physically. It will include a lot of golf, tennis, pickleball, horseback riding, hiking, skiing, trips to wineries, theatre shows, concerts, long weekends at a variety of bed and breakfasts and trips to visit friends and family. It will include volunteering for a few important causes that matter to us the most. It will also include at least four months in a warmer climate during winter.

The psychology behind switching from a saver to a spender is another issue retirees grapple with all the time. We are creatures of habit and we love certainty. I have had too many friends who have saved plenty of money to achieve all of their financial goals only to succumb to illness, the early onset of the debilitating effects of Alzheimer’s or dementia, or suffer a major family crisis. Hence our desire to retire at 62 if all continues to go according to plan.

I have really enjoyed reading a more unconventional book about retirement titled, “How to Retire Wild, Happy and Free: Retirement wisdom that you won’t get from your financial advisor” by Ernie J. Zelinski. He has also authored the international bestseller “The Joy of Not Working.” Ernie’s refreshingly different look at retirement is an easy read, extremely practical and very humorous.

I can’t tell you whether to live for today, save for tomorrow, or to do a little of both. I can’t tell you when to retire or what to do in retirement. This is so deeply personal that I encourage you, no matter what your age, to discuss your feelings about what an ideal life and retirement might look like for you and your loved ones. Remember this:

“No one on their deathbed ever said, ‘I wish I would have worked more.’” - Anonymous


 



Joe Battista has been an integral part of the Penn State and State College communities since 1978. He is best known for his effort to bring varsity ice hockey to Happy Valley and in the building of Pegula Ice Arena. “JoeBa” is the owner of PRAGMATIC Passion, LLC consulting, a professional speaker, success coach, and the vice president of the National Athletic and Professional Success Academy (NAPSA). He is the author of a new book, “The Power of Pragmatic Passion.” Joe lives in State College with his wife Heidi (PSU ’81 & ’83), daughter Brianna (PSU ’15), and son’s Jon (PSU ’16), and Ryan (State High Class of 2019).
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