The Myths and Realities of Retirement Planning

Years ago, while I was still trying to figure out how to escape the rat race, one of my mentors gave me an assignment.

He asked me to observe very keenly how the people at the top of my organization went about their daily lives, especially how they handled their financial matters.

On closely examining their behaviour based on a few pointers he had given me on retirement planning, I noticed something very peculiar.

Irrespective of how much money they were earning, they were nowhere close to being financially independent.

This discovery was a turning point in my life.

It was such an eye-opening lesson I will never forget.

He went on to tell me that if I didn’t make a move, I would wind up no different from them, because that is how the employment system is designed.

You keep climbing up somebody else’s corporate ladder, and at 65, you retire to a smaller income than you were earning at the peak of your career, and disappear into oblivion.

Not having any investments makes it even more difficult for most people to retire, forcing them to believe that when old age arrives they will have figured out how to be financially independent.

Sure as night follows day, retirement approaches, and it is nothing close to what they dreamed it would be.

Some find themselves having to move in with their children because they are broke.

Keep in mind that it’s quite natural for people who have been used to spending many hours at work, to feel useless or as if they aren’t worth anything anymore when they retire, irrespective of whether the kind of work they were doing was meaningful or not.

They end up looking for something to do to feel useful, in addition to earning an extra income to meet their basic expenses.

Look at it this way.

You work hard all your life for someone else, live an okay life or maybe struggle to make ends meet, then fail to figure out how you can survive financially once you break out of that routine.

Why?

The answer is simple.

Wishful Thinking Is A Lot Easier Than Taking Action

To take control over your financial future, you must be prepared to make serious changes in your personal and professional life.

Blindly following old ideas that have clearly not worked for others in the recent past, such as having a job for life leading to a happy retirement just won’t do.

That said, it is a good habit to review your financial situation on a regular basis, rather than living with the fear that you won’t be able to retire when you planned, or if you do, you won’t be able to live the way you want.

This can help you figure out where to start looking for solutions, many of which you will wish you had known sooner when you had the strength but not the purpose to implement them.

However, it is never too late.

The important thing to recognize is that the path to financial independence is not without pitfalls and it is okay to make mistakes for as long as you learn from them.

An Important Question

If you had the power or opportunity to choose how to spend your day, how different would it be from your average day?

Think about this question very carefully because herein lies the answer that will give you a good indication of how close you are to living a gratifying life, and why it is important to start taking retirement planning more seriously irrespective of your age.