The question isn’t at what age I want to retire; it’s at what income.
– George Foreman
Retirement is something that all of us must face. It is a fact of life as certain as death and taxes. We do not want to work forever, and there comes a time when we have to throw in the towel and call it a day—permanently.
Some people dream of an early retirement, and they actually can, if they already have their retirement nest egg intact and ready to fund their desired lifestyle for the rest of their lives. Yet, some others keep on dreaming of retiring early, but stop at just that—dreaming—and waking up to the reality of mandatory retirement, like almost everybody does. Depending on the organization where you work, mandatory retirement comes either at age 60 or 65. But whether sooner or later, retirement means a fundamental change in a person’s life.
Whenever I hear of the word retirement, three memories hit me, each of which highlights a particular lesson in retirement; lessons that each of us can learn from, prepare for and cope for the Big “R.”
Story # 1: My boss retired: the reality. A few years ago, my boss—a senior bank executive—retired at age 60. I attended her despedida party, being one of the well-wishers. Little did I know that on that occasion I would see retirement from a deeper perspective.
She shared that on her last working day, she distinctly remembered the last task she did as an employee was shutting down her personal computer. It had been such a routine thing for her, day in and day out, for the past 40 years of her banking career. But on her last day at the office, it meant more than just switching off a machine; it also meant shutting down from her work, being offline forever, no turning back. Then came a certain pang of sadness in her heart, knowing she would be leaving a profession around which her life revolved for almost four decades. Yes, in her retirement years, she will no longer need to wake up early and stay at least eight hours in the office. Yet it creates a bit of fear in her: what will she do everyday now that the routine is suddenly gone? She already had a few things in mind to occupy her, such as pursuing her long-forgotten hobby of painting, serving in the church, and having more time with her husband and family.
This story is a stark reminder of the realities of retirement as they bring about fundamental changes to a person’s life: there is more time to spend with the family; more time to spend pursuing hobbies, talents, and interests; less stress from work, and more time for oneself.
Yet, that is only the beginning, for there are also other concerns that come to the fore during retirement. For one, physical health that comes with you starts, if it hasn’t yet, to decline; financial resources for living expenses such as on clothing or recreation start to diminish; expenses on caregiver fees, hospital bills and other medical-related expenses start to rise. Moreover, it is important to note that what is received for retirement—a lump-sum amount, for example—would most probably be the last significant cash inflow that one might receive. The SSS pension could be counted in, but the amount pales in comparison with that of the retirement benefit and the rising expenses throughout the succeeding years.
Yes, add to the equation the ever-increasing prices of goods, services and life expectancy due to advances in science and technology, a retiree should be able to stretch out the money during retirement for, say—a good 10, maybe 15 or 20 years down the line.
At the end of the day, retirement brings changes, and much more—which brings me to the second story.
Story # 2: A witty joke: how it should be. In the past, I had the chance to listen to one of the foremost registered financial planners (RFP) in the country, Randell Tiongson, tackle retirement life. He illustrated two different scenarios of retirement: the first has a person on the phone, speaking to one of his siblings, asking him if the father (the retiree) could be transferred to the latter’s house, for the family budget no longer suffices to support the father. The second scenario, on the other hand, portrays the same person as actually getting excited over when the father will move in with him and his family, all because the father has this habit of giving a treat to people around him.
The illustration serves to point out that a retiree can still be of help to the immediate family members and the community by giving. As one saying goes, “the role of the parents is to discipline the children; while the role of the grandparents is to spoil them.” How happy it would be to see ourselves being able to treat our grandchildren and other family members to something we could afford, or giving them gifts during special occasions and perhaps, even during vacations?
One need not be subject to or resigned to the uncertainties and vagaries of life during retirement. On the contrary, one can prepare for retirement life—as early as the very first paycheck—which is illustrated in the third and last story.
Story # 3: Regrets in hindsight: starting early. I have had the opportunity to give seminars on retirement planning for would-be retirees from different companies and organizations. There, I usually give them a run-through of what to expect in retirement life: the changes, the adjustments, and the financial resources necessary in order to cope with what they are facing.
Well, every time, someone from the audience would say, “We should have prepared earlier.” There is a sense of lost time and lost opportunities: things that they feel they should have done long ago in order to better prepare themselves for retirement. That is also the reason why I share this story with younger audiences every time I give a talk regarding financial planning: so that they can learn from the experiences of others and build on them.
Retiring is an exciting thing. With retirement, you get to savor and enjoy the fruits of your labor—and live your life free of toil and by your own design. Retirement need not be full of anxiety—you can actually prepare for it and live life fulfilled for the rest of your days.
Rienzie Biolena is a registered financial planner of RFP Philippines. He is chief financial planner of WealthArki& Consultancy, Inc. a financial planning and wealth management advisory firm aligned with international best practices. To learn more about financial planning, attend the 64rd RFP program this September. To inquire, e-mail at email@example.com or text <name><e-mail><RFP> at 0917-9689774.