Back Aayusyam! Bhavabhooti!
To make that wish true you'd need to answer the question, "How much is enough to retire comfortably and not run out of money in one's later years?"
Steve responds not with the `actuarial mumbo-jumbo' of life expectancies, anticipated retirement age, and returns on various classes of investments, but with more questions: "Enough for what? To continue leading our current lives? Or enough for a life that we might find more healthy, meaningful, and fulfilling?"
He traces the change in our thinking of retirement. In the 19th century, it was `retirement = death'; in the 20th century, the equation changed to `retirement = not working'. Now, we have options that our ancestors didn't have, writes Steve.
"We could easily live into our late eighties, nineties, or even to 100 — and be vigorous, healthy, and productive for most of these years. To be happy and healthy for such a long period, we will need fairly robust reasons for living."
Steve's questions: "Who am I/ what should I do?" may seem elementary. A popular response would be, "Anything but work." But the author cautions: "The mistake most of us are making is that we are equating retirement with happiness."
Also, don't confuse `enough' with `what you need', or else you could end up acquiring more money and stuff than what is really needed for a meaningful, happy life, points out Steve.
You may get impatient wanting to know how to make money, instead of being faced with inconvenient questions.
The author reasons that if one is not living a meaningful, healthy life in his later years, then saving money during working life becomes a waste. If you really thought about what would give meaning to your life, `enough' might be less than what you thought. Also, "People who are happy and have purpose in life are generally healthier than grumpy old men and women."
Well, you chuckle, believing that you're not going to be one of them, but the bad news is that "many of us aren't saving nearly enough". Steve declares: "Many of us simply don't have the financial resources to retire — now, in 5 years, in 10 years, or even in 15 or 20 years."
However, work may be toxic at times, accedes Steve. Reasons: there's too much of it; it's the wrong type of work for your stage of life and so you're not able to meet the job requirements; the work conflicts with your values; or, the work environment is unhealthy or too stressful.
Yet, don't fall prey to the `unnecessary anxiety' that the retirement industry creates. "They tell us that retirement is the normal way to complete life, and that life is cheating us if we can't retire (and earlier the better)... If we get too anxious about saving for retirement, we might eat dog food before retirement, just so we won't be eating dog food after retirement!"
Take charge, exhorts the author. Ask yourself how you define `healthy'. If you respond with `not being sick', as Western medicine defines it, Steve will give you "a more robust definition" that encompasses a state of body and mind, where you feel `vital and energetic'.
Since it takes many years of a lifestyle for a disease to eventually develop, you can adopt a healthy lifestyle to reduce your medical bills. You need `an owner's manual' for your body, to tell you the types of foods you should eat, the supplements you should take, the amount and the types of exercise that are appropriate, and the diagnostics you should have at various points in your life.
Let's revert to the original question `How much is enough?' Replacement ratio analysis is the traditional method for designing retirement plans. But that's not enough for individuals, because of two flaws that Steve points out: One, it focuses only on income, not expenses. And two, it doesn't take into account income from wages in your later years, because the thinking is based on "the old twentieth-century all-or-nothing model of working and retiring." The alternative `magic formula' is I {gt} E, where I is annual income and E represents annual living expenses. According to the author, the trick is to identify which sources of E are really needed for a happy, meaningful life, and to get rid of or minimise the rest.
Revisit work. Older employees have advantages such as `stability, confidence, and reliability' and they may be `cheaper'! He cites a recent US court ruling that okayed `reverse age discrimination', meaning "it's perfectly legal for an employer to discriminate in favour of older workers." Also remember that retiring full-time isn't the only way to enhance your life, and Steve would advise you that it may not be the best way either. Instead, you can restructure your work, and perhaps work a little less.
In King Henry IV, the Bard asks, "Is it not strange that desire should so many years outlive performance?" But you can sync the two, with Steve's help!
D. Murali
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