Ultimate Vacation

It’s been said that retirement is the ultimate vacation. Many people spend more time researching and planning for their next vacation than they do for their retirement. There are a number of reasons for this, but one reason is that often, the process seems overwhelming. Here are five truths about retirement that can shed some light on why many people—and maybe you—put off retirement planning.

1. Retirement planning doesn’t have to be overwhelming or scary; treat it like you’re planning for a vacation, and you’ll be better off. Research shows that 39 percent of Americans spend more than five hours exploring vacation possibilities—while only 11 percent spend the same amount of time researching their 401(k) plans. In our new book, Ultimate Vacation, I walk you through retirement planning just as you would prepare for a trip: where are you now, where you want to go (and why), how you will get there, and what will you do once you’ve arrived.

2. It’s easy to think that retirement planning is all about the numbers. It’s not. If at any point you start to feel overwhelmed, remember, numbers are only one part of the picture. Understanding your numbers is just a way of helping you answer bigger, more important questions—namely, how to align your current reality to your hopes for the future. While most financial planning is investment-centric, our team focuses on each client’s individual, personal vision.

3. You’re likely putting off important decisions because of fear. Our team has heard it from more than a few clients: they put off insurance, long-term care, and estate planning because, as they say, “I worry that if I do it, I’m going to die.” It’s human to feel this way. But even if taking these steps won’t literally kill us, it will remind us of our own mortality, which is scary. The best way to live longer—and to enjoy the time you have—is to plan for the future.

4. Can the FIRE movement really help you retire by age 40? FIRE is an acronym that stands for “Financial Independence, Retire Early.” FIRE is a movement dedicated to a program of extreme savings and investment that allows proponents to retire far earlier than traditional budgets and retirement plans would allow. By dedicating up to 70 percent of their income to savings, followers of the FIRE movement may eventually be able to quit their jobs and live solely off small withdrawals from their portfolios.

But someone using this method would have to save up between 25 and 35 times his or her anticipated living expenses. On the low end, that’s more than $1.3 million, which is a pretty distant goal for most young people. To make the FIRE method work, you would need to maintain a high-paying job and live an austere lifestyle for years—or pray that you get an unexpected financial windfall. For most people, the math simply doesn’t make sense.

5. Budgeting is a lost art. In five easy steps, you can become an effective budgeter without an overwrought or complex process. A 2019 poll by Debt.com of more than 1,000 Americans revealed that precisely 67 percent of respondents had their family on a budget, down from 70 percent in 2018.

Many people either don’t think they need to, or they don’t think they can afford to. But it’s simple to find out how much you spend and where you can save a bit. In the book, I demolish your excuses and layout exactly what you need to do to make big changes in small steps. And no, it doesn’t include itemizing every penny you spend!

Ultimate Vacation: The Definitive Guide to Living Well Today and Retiring Well Tomorrow looks at this entire process and provides a road map you can use on your own or with your trusted advisor. Contact us for more information on how to obtain a copy.

When planned properly, retirement really is the ultimate vacation!

Please contact our team with any questions or if we can otherwise be of service. We are happy to discuss your personal vision and how you can live well today while being prepared for tomorrow. There is no cost or obligation. Contact me at randy.carver@raymondjames.com or (440) 974-0808.

Any opinions are those of Randy Carver, and not necessarily those of Raymond James. Investing involves risk, and you may incur a profit or loss regardless of strategy selected.  Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.