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How to Work and Travel as a Digital Nomad After Retirement

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This post was contributed to Leisure Freak by digital nomad and writer John Smith. Retirement no longer means sitting idly by; instead, it has become an opportunity for adventure and freedom. Enter the digital nomadism world, where retirees embrace a unique lifestyle that combines work and travel. By becoming a digital nomad after retirement, you can explore the globe while continuing to earn an income remotely. In this post, we will talk about how to work and travel as a digital nomad after retirement. So, let’s embark on this remarkable journey together!

Man and woman standing by the door

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Assessing Your Skills and Interests

Now that you’ve decided to embrace the digital nomad lifestyle after retirement, it’s time to assess your skills and interests. Take a moment to reflect on your vast array of experiences and identify those transferable skills that can be valuable in the remote work landscape. From project management to writing, teaching to consulting, there are numerous options to explore. Additionally, consider your passions and interests. What truly excites you? Whether it’s photography, graphic design, or coding, aligning your work with your passions will bring fulfillment and joy.

Planning Your Finances

As you set off on your digital nomad adventure after retirement, careful financial planning is crucial. Begin by evaluating your retirement savings and income, ensuring they can support your desired lifestyle. Create a comprehensive budget that accounts for travel expenses, accommodation, meals, and other necessities. Consider alternative income streams like freelancing, online consulting, or monetizing a hobby. Diversifying your income can provide stability and flexibility while traveling. Remember to factor in healthcare costs and insurance coverage as well.

Choosing Your Destinations

One of the exciting aspects of ways to work and travel as a digital nomad after retirement is choosing your destinations. Research digital nomad-friendly locations that cater to remote workers, offering reliable internet connectivity and supportive infrastructure. Consider the cost of living, safety, climate, and cultural experiences. Each destination has its unique charm and opportunities. Explore visa requirements and limitations for your chosen locations, ensuring smooth entry and stay. Whether it’s the bustling streets of Bangkok, the serene beaches of Bali, or the historic cities of Europe, the world is your oyster. Embrace the freedom of choice and embark on a journey that aligns with your dreams and aspirations.

Setting Up Your Remote Workspace

Creating a productive remote workspace is essential as you embark on your digital nomad journey after retirement. Start by selecting the right technology and tools to support your work. Find co-working spaces or cafes with reliable internet access where you can work comfortably. Ensure you have a comfortable chair and a desk that promotes good posture. Organize your digital files and documents for easy access. Set boundaries to separate your work and leisure activities. Experiment with different setups and find what works best for you.

Managing Your Time and Workload

Managing your time and workload effectively is key to a successful digital nomad lifestyle after retirement. Establish a routine and schedule that aligns with your travel plans and personal preferences. Set realistic goals and deadlines to stay focused and motivated. Prioritize tasks based on urgency and importance. Utilize productivity tools and techniques like time-blocking or the Pomodoro Technique. Delegate or outsource tasks when necessary to alleviate the workload. Embrace flexibility while staying disciplined to maintain a healthy work-life balance. Regularly reassess and adjust your schedule as needed to optimize productivity and enjoyment. With effective time management, you can make the most of your digital nomad adventure while meeting work commitments.

Building a Professional Network

Building a robust professional network is crucial for success as a digital nomad after retirement. Leverage online platforms and communities to connect with like-minded individuals in your field. Attend digital nomad meetups and conferences to expand your network further. Collaborate with local professionals in your chosen destinations to gain insights and create potential business opportunities. Foster meaningful relationships by offering your expertise and support to others. Actively engage in conversations and discussions to build rapport. Embrace the power of networking and cultivate a strong professional community while traveling the world.

Staying Healthy and Ensuring Well-being

While living the digital nomad lifestyle after retirement, prioritizing your health and well-being is paramount. Take care of your physical and mental health by incorporating self-care practices into your routine. Find fitness facilities or engage in outdoor activities to stay active. Manage travel-related challenges like jet lag and unfamiliar cuisines by practicing mindful eating and getting sufficient rest. Seek out medical facilities and ensure you have adequate health insurance coverage while traveling. Prioritize mental well-being by practicing stress management techniques and seeking support when needed. Remember, a healthy and balanced lifestyle is the foundation for a fulfilling digital nomad journey after retirement.

Embracing Cultural Experiences

Embracing cultural experiences is a delightful aspect of being a digital nomad after retirement. Immerse yourself in the local customs and traditions of your chosen destinations. Learn the basics of the local language to enhance your interactions and connections. Participate in cultural events and activities, such as festivals or cooking classes, to gain a deeper understanding of the local culture. Engage with locals and fellow travelers to exchange stories and perspectives. Visit historical sites, museums, and art galleries to appreciate the rich heritage of each location. Embracing cultural experiences enriches your digital nomad journey, fostering personal growth and creating lasting memories.

Conclusion

Embarking on a journey of traveling as a digital nomad opens up a world of adventure, freedom, and fulfillment. By assessing your skills and interests, planning your finances, and choosing suitable destinations, you can lay the foundation for an exciting lifestyle. Setting up a productive workspace, managing time and workload effectively, and building a professional network contribute to your success. Prioritizing health and well-being and embracing cultural experiences enriches the journey further. Remember, as a digital nomad, you have the flexibility to adapt and adjust along the way. So, take the leap, explore new horizons, and savor the endless possibilities that await you when you work and travel as a digital nomad after retirement.

Much thanks to John Smith for sharing his expertise with Leisure Freak readers.

Author Bio

How to Work and Travel as a Digital Nomad After RetirementJohn Smith is a seasoned digital nomad, travel enthusiast, and inspiring writer currently writing for Family Affair Moving Orange County. With a passion for exploring new cultures and sharing practical advice, John offers insights and tips for retirees looking to embrace the digital nomad lifestyle. Through his engaging writing style, he aims to inspire others to live a fulfilling and adventurous retirement.

 

Wow! I Might Be An Unemployable Retiree, It’s More Than A Skills Issue

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There sure are a lot of open opportunities today and recruiter contact has recently escalated. Something of a surprise since I haven’t updated an online resume in over a decade. After a recent back and forth with a recruiter about an interesting opportunity, I’ve come to realize that at this point I might just be an unemployable retiree. Surprise! It has nothing to do with stale skills.

Many years ago when I retired early at the age of 51, I had a plan to retire early and often. I spent years being pigeonholed during my long engineering career to support all the legacy crap. The tedious old money-makers that new people didn’t want to learn while denying me the new fun stuff. So my plan came with a list of paid adventures I wanted to learn and do. My retirement gigs were fun and rewarding to jump in and out of. I basically ran through my list and have since enjoyed stepping back from all of that while remaining open to maybe one day doing it again. But can I?

Wow! I Might Be An Unemployable Retiree, It’s More Than A Skills IssueImage Source

Hitting Unemployable Retiree Status

There are many stories about how people want to retire and do some type of paid work. I’ve always believed retirement is the absence of NEEDING to work, not the absence of work. A philosophical view and lifestyle that I have lived for over 13 years now. 

We always hear warnings about people who retire and then want to return to work but they didn’t maintain or gain the necessary new skills to remain attractive to the hiring system. I know that is a real thing to be cognizant of and work to address. However, what I’m now experiencing is something else. It’s something that I think every retiree who is open to working in retirement might also find one day happening to them.

My years of retirement freedom living life on my terms have changed my definition of rewarding work and what I’m willing to do when trading my time for money. After decades of obligated work duty acceptance, I stuck to a narrow and focused target of what I would accept doing in retirement. Career servitude certainly changed me over the decades. But there’s little question that over time, my early retirement has also changed me from what I was in the first years after ditching my long career. 

I’ve had a lot of time to think about all of the sacrifices I had to make in order to succeed in my past career and now a financially independent retirement.

Too much of my career had over the top unacceptable treatment. Today I wouldn’t tolerate any of it regardless of outcome. Rejecting some of those workplace shenanigans were put to the test in my retirement gigs. I just successfully refused to bend and offered to immediately resign. But I now feel even more rigid about my work acceptance parameters. Here are a few observations that make me believe I may have reached unemployable retiree status.

Advanced BS Detection

I used to be a lot more trusting. Giving a pass to some contradictory statements or work scope discrepancies that seemed to drift throughout a conversation or opportunity interview. Not so much now. My BS detection kicks in and I immediately feel the need to call it out and clarify. Strangely it’s something I’ve found that interviewers and especially hiring managers aren’t used to and don’t appreciate. In the past I just took mental notes and knew what to watch out for later if I accepted the position. Today I’m not willing to go anywhere near there.

Rarely does someone get past my working in retirement screening. But the last time that an interesting opportunity did, I actually cleared through a couple of interviews to the final hiring manager and director interview. This was the earliest realization that I may be an unemployable retiree. I had laid out clearly what I was willing to accept throughout their earlier interview process. Now these two were mentioning things beyond the earlier interview agreed position scope. All of a sudden there were required position elements that were consistently mentioned as my having zero interest in doing. 

The moment I brought it up in that final interview I sensed hostility toward my gall to even mention it. I knew what that alone meant. Even if it was favorably explained to me, I knew that I wouldn’t be high on their hiring list just for having the audacity to raise the issue. Nor could I trust it wouldn’t rise up again later if we did decide to move forward. At that point I decided we were wasting both of our time. I simply said it doesn’t sound like it’s a good fit. That was my way to politely end the interview.

Lack of Needing To Prove Myself 

As far as I am concerned, as a financially independent retiree I’ve got nothing I need to prove to anyone. There seems to always be a competitive element to the workplace. Be the best, go the extra mile, surpass expectations, bell curve performance rating, etc. and be able to prove it. It all ends up being compared to peers with metrics that are meant to drive competition to drive higher productivity. Something that doesn’t necessarily result in higher compensation. It’s a way to have overperformers cover for the underperformers so that the business continues without delay. I get it, but I’m no longer interested in any of it which is an unemployable retiree stance to have.

I find that a lot of managers need their carrot and stick practices as a primary motivation. As a retiree I just want to do the best job possible and no longer seek climbing in job status or chasing any other corporate-world carrot of the day at the cost of my personal life. Meaning, I will gladly trade some of my time for money doing the agreed upon job scope that I accepted and if it isn’t enough, then let’s just part ways. 

As a financially independent retiree I consider any paid opportunity as a learning and doing experience of interest that will ultimately run its course one way or another. Not being motivated by carrots or having fear of any sticks may just be the definition of someone being an unemployable retiree, even in this wide open job market. 

Overtime Will Never Pay Enough

Money was never the primary reason for any of my paid retirement gig adventures. So time always beats money ever since I retired early. In today’s understaffed environment, whether due to mismanagement, design, or bad luck finding people, overtime seems to be the business go-to. When I was a young parent I had to work all the overtime I was offered. Something about financially desperate employees really plays well into the employment system. Now that isn’t the case for me which I think takes me to, and even beyond, unemployable retiree status. 

What I Would Do If The Perfect Opportunity Presented Itself

I try to believe that I could revert back to my slightly more bendable early retiree self if I was presented with the perfect gig. It would have to be something I really wanted to do. I do think even with the introduction of some slight employment shenanigans I could temporarily fake it until I could either mold things my way or get a big enough taste to feel good about just walking away if it was unbearable. Even getting to that point will rely heavily on what I have always done to land my past paid retirement adventures.

Trust My Screening Process

It takes a lot to get to me. Much has to be in perfect alignment for me to even engage in the first place. I am getting a lot of recruiter emails and a few voice messages and nothing passes the smell-test these days. Having already gone through my list of jobs I wanted to learn and do in my retirement, I can’t think of anything at this time that I would even entertain. It would take me believing in the people, project, business, or cause to peak my interest.

Be Brutally Honest

In all my retirement gig interviews I honestly said what I will and can do. The way I see it, there’s no reason for either party to have false expectations. Whether they believe it or not, what they see is what they get. It would only happen if it is a good fit for both of us. Not sure that would fly in today’s environment. Seems the world values bluster, exaggeration, and self promotion over truthfulness or facts.

Stick To The Payable Strengths That I WANT To Use

I’d stick to my skills that I would love to use and the job itself. I have no interest in working using even payable skills that I hate doing. On top of that, there’s no interest in climbing any ladder to something more. The truth is a retiree is a short-termer. It’s no secret that I am older, why would either party tiptoe around it?

Tell Them Why I Really Want To Do It

Obviously if it gets to this stage, the match of resume, skills, and job scope have been perfectly aligned. Explaining why I want to do a job just ties it together. Especially if there is any question of overqualification. Everyone then knows exactly where we stand. Frankly, I can’t think of anything today that could get me past this hump to even tell myself let alone an interviewer. This issue makes me now really believe I’m an unemployable retiree. 

 

My plan to retire early and often is a great plan. It is a rewarding lifestyle to adopt and I’m optimistic under the right conditions that it still could be in the future. But like everything else in this world and life, nothing lasts forever. This retirement philosophy will have to evolve as we always seem to change. I think we end up at some point deciding for ourselves that we are an unemployable retiree. Something to consider as time goes by living a life of FIRE.

I Wondered, Could We Live On Social Security Alone? 

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I take great pride in the way we chose to live a frugal life so that we could retire early. It not only allowed us to save a higher percentage of our income when we were still working, but also resulted in needing a smaller portfolio capable of supporting us. I wondered at this time when many people have little to no retirement savings, even with our frugality, whether we could retire and live on Social Security alone.

Of course frugality is subjective and personal. It is also unique to all kinds of parameters. Frugal living in Colorado is different than it is in California. I was a little surprised at where we stood with what many say is impossible to do without severe lifestyle deprivation. I agree it seems challenging. But many people find a way to pull it off out of necessity and unfortunately for some it’s done with a dose of desperation.

I Wondered, Could We Live On Social Security Alone? 

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Can We Live On Social Security Alone?

The first obvious requirement to meet before answering this question is knowing exactly how much our retirement lifestyle costs. Since I retired early over 13 years ago, our retirement budget is clearly known. 

As I will soon hit age 65 and Medicare eligibility, we will see significant healthcare cost reductions. We do have to make some assumptions as to the advanced cautioned property tax, homeowners insurance, and auto insurance increases coming on the next renewal. That said, we can come close to setting a realistic retirement lifestyle budget going forward. We do have many years of retirement budget history behind us.

OK frugal retirement lifestyle, where do you stand against our ability to live on Social Security alone? Close but no cigars. 

Starting With Our Numbers

Neither my wife or I are yet at full retirement age. When looking at  Social Security estimates for age 65, we could expect a combined yearly benefit of $50,100. Is it enough? It could be in many parts of the country, but we live in a beautiful but higher cost area. 

Even with our own flavor of frugality, based on our well honed retirement lifestyle and anticipated budgetary changes we do come up short. About $9,600 a year short. That’s without cutting anything from our already defined frugal lifestyle. An enjoyable lifestyle that happens to come in below half the local median household income for where we live.

Based on this shortfall and a commonly followed 4% withdrawal rate, the down and dirty calculation for our portfolio needs to close the gap on this Social Security alone challenge is $9,600 X 25 = $240,000. Still a tidy sum for many to attempt reaching, but that portfolio savings amount is in line with what a 2022 Vanguard study found for people today between the age of 55 and 64 regarding retirement savings. Their study came in at an average savings of roughly $256,000. That amount can provide $10,240 a year of available retirement funding based on a 4% withdrawal rate.

Fortunately our Social Security Alone failure isn’t detrimental. 

I did this exercise out of curiosity. Our portfolio has things covered if we didn’t want to make any retirement lifestyle changes to line up closer to living on just Social Security. 

That doesn’t mean we won’t cut back. We’ve already begun to see budgetary places where we won’t spend as much going forward very much longer anyway. We’ve constantly experienced changes in our attitudes about things over the years of our retirement. 

We only come this close to being able to consider living on Social Security alone because we paid off our mortgage over an 18 year period several years ago. We bought our modest older home when I was corporately forced to relocate to remain employed midway during my primary career. It was a bad job market so we bit the bullet. Having mortgage obligations in retirement would certainly make this task far more challenging if not impossible. 

Prior to retiring we did a lot of necessary things to get this close to living on Social Security alone. We paid off all debt and stayed out of debt. We also created a frugal yet rewarding lifestyle by cutting all spending waste while prioritizing what is important to us. 

A few more tweaks and possibly our consideration of some other moves could get us to living on Social Security alone without any reliance on savings or feeling like we are living a deprived life.

A few retirement budget and income strategies come to mind that are worth considering  –

Delay Starting Social Security 

This exercise I just did is based on claiming my Social Security at age 65, not FRA or age 70. Social Security would be higher by holding off. Any increase in received Social Security payments not only narrows any retirement budget shortfall but also for someone who is still employed there’s added time to increase retirement savings. 

Being that I’m already retired, delaying Social Security would mean relying on my portfolio to carry the load a little longer and possibly having less to work with later. It’s all the things that need to be considered. It is always best to run the different scenarios against a good retirement calculator. 

Move Somewhere Cheaper

Where we live plays a big role in our retirement cost. Being open to moving to a different town, city, state, or even country can play a role in reducing retirement costs. We do love where we live. Being close to our children and grandkids is important to us. However, we would consider moving somewhere different if staying here meant not being able to afford our desired retirement lifestyle.

Tap Home Equity

We’ve all seen the commercials on TV about Reverse Mortgages. It’s a way to use home equity to help fund retirement. It isn’t high on my list because of the high costs associated with doing this. That and the restrictive rules that can jam you up if you run afoul of them. But it’s something that can be considered if the worst financially happened to us.

Rent Out A Room

We are like many retirees who now have empty bedrooms that have been converted to exercise rooms, offices, and storage that can be changed back. It provides the option to rent out a room or two for retirement income in this high rental cost housing market. 

Apply For Senior Benefits

Aside from getting discounts at restaurants and hotels, there are some senior discounts that we have to apply to get. For example, we did apply to receive a senior property tax break. We meet the age and requirement of living in our home at least 10 years. This is a regional type benefit that is worth looking into to find out what the benefit is and what rules must be met. Our savings are yet to be determined since the huge jump in property tax appraisals over the last couple of years also takes effect this year. 

Cut Transportation Related Costs

I have a problem, a car problem. I just love cars and have been active in the hobby for most of my life. I’d consider cutting back on my automotive hobby and shave down auto insurance costs. That and bank the money received in a sale of one of my babies. 

We do see our world shrinking. There are far more opportunities to use our bicycles to get to town venues, cafes, and shopping. Although it is limited to weather and seasonal conditions. Aside from that, there’s always a way to become a single car household if we need to cut expenses.

Start A Retirement Gig

One of things many retirees find themselves doing is returning to a little retirement gig for the social aspects and earning a little extra to get by. Nothing wrong with that. I’ve had some rewarding paid retirement adventures during my retirement. Picking the right opportunity can be the ticket for closing the loop. 

If you’re collecting Social Security before reaching full retirement age and decide to work, just keep monthly income under $1,770 ($21,240 a year) to avoid bumping into the Social Security pre-FRA earnings limit. Unless of course you find a cool gig doing something that makes a ton of money and you don’t need to worry about the Social Security benefit clawback.

What does this all mean?

Well, what we need is nowhere near the routinely hyped million dollar retirement portfolio. Having no or little retirement savings isn’t necessarily a guaranteed doomed situation. Everyone will have their own unique needs based on where they live, how they spend, the amount of their Social Security benefit, and whether they have room for and are open to making more cuts or generating new income if necessary. 

What’s evident is that all of us had better know our expenses. We have to take control of our spending, have little or no debt, save something for retirement, and prioritize what’s important in our lifestyle. We should also be prepared for necessary changes to meet the inevitable retirement funding challenges. 

This also points out the importance of setting up a low lifestyle cost before retiring. If saving a huge portfolio is unattainable, then we best take care of where and how we want to live at the lowest cost we can joyfully do it. 

If you’re thinking, great, this exercise to see if we can live on Social Security alone only matters if it stays somewhat funded as promised. Well, I think we’ll all have bigger problems to deal with if Social Security collapses. That said, it is always better to save more than you will need based on whether everything else goes great. You know, just in case.

Making Your Garden the Perfect Place to Relax in Retirement

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The act of spending time in a garden has the power to decrease an individual’s risk of developing dementia, reduce stress and anxiety, increase vitamin D levels, and provide a source of aerobic exercise (when actively gardening). If you’ve decided to retire, and are still on the lookout for meaningful new hobbies, gardening could be exactly what you are in search of. In addition to planting flowers and produce, and providing daily care to your plants, your garden can serve as a wonderful spot to nap, read a book, and to entertain guests. Learn more about some of the best ways to make your the perfect place, a garden to relax in retirement.

Making Your Garden the Perfect Place to Relax in Retirement

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How To Have A Garden to Relax in Retirement

Create a comfortable and purposeful patio area

Of nearly any area in or outside of the home, patios often have the most unrealized potential and the easy choice when trying to create a garden to relax in retirement. Even if you have a relatively small patio space, you can quickly and easily turn a boring outdoor space into a stunning retreat. To do this, first decide how you would like to use your patio. Do you only want it to be reserved for time alone, or time with your family? Will your pets join you on the patio regularly? Do you want to host frequent dinner parties outside?

When you’ve established the various uses of this space, you can make the best choices for adding furniture, decorative elements, and functional features. For example, if you know that your patio gets a lot of sun, but you want to spend time entertaining or relaxing, the use of retractable awnings can provide much-needed shade and protection from experiencing an interrupting rain event.

Other low cost alternatives like shade sails or patio umbrellas paired with patio lights can add both atmosphere and shade. Considering the needs of yourself, your family, and your guests in advance (such as keeping out of the sun) can guide you toward making the best choices for your patio design. 

Use your garden for learning

In addition to creating a relaxing and functional patio area, it is also beneficial to maximize the use of your actual garden as well. As mentioned earlier, engaging with your garden carries with it tremendous health advantages. On top of these benefits, you can transform your garden into a daily learning opportunity. Whether you’re an advanced gardener or a complete novice, there is always something new to learn about nature. 

Set goals for yourself, such as learning how to care for specific crops, or learning about the care of plants and flowers that you are not yet familiar with. Stretch yourself beyond the patio to learn about garden water features like ponds and fountains. If you have an interest, learn how garden lighting and water pumps can utilize solar powered options. 

Let your curiosity take you places you may not have considered before. Who knows, you might end up joining the needed and growing number of honey bee advocates in your garden plan’s pest control decisions and plant selection. 

Establish your educational goals on a monthly basis (or on a schedule that works well for you), and track what you’ve learned throughout the year. Then, by the time the next year rolls around, you can review every new skill and fact that you’ve learned thanks to your home garden.

Add plants and flowers that appeal to you

It’s important to recognize that creating a beautiful garden environment is highly subjective. The plants featured in a popular home and garden magazine may not match with your home’s style and/or your own personal preferences. When choosing the plants and flowers that will adorn your gorgeous outdoor oasis, select only those that you most enjoy. 

Since you will be the one who spends the most time in your patio/garden space, fill it with the plants that appeal to your sense of beauty. But don’t lose track of what is native or survivable in your climate. The key motivation is creating a perfect place to relax in retirement. Avoid over-tasking yourself in labor and/or resources trying to force beautiful but unsuitable plants to thrive.

 

Whether you desire a retirement full of activity or rest, your patio/garden area can provide both. By establishing your goals and desires for the space, and making it suit your needs, you can make the most out of this often underutilized outdoor area.

Embrace A Realistic Lifespan, Live A Happier Retirement

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We’ve all heard it before. Your retirement plan should cover the possibility of living to a very old age. I instead embrace a realistic lifespan which has allowed for not only an earlier retirement but also a happier one. There has been both a financial and lifestyle bump to this mindset. It’s a “live life to the fullest” flavor of mortality salience without the anxiety or fear of what we all know as inevitable. It’s all about coming to terms with a lifespan based on our own unique metrics and maximizing the time we most likely have left. 

Embrace A Realistic Lifespan, Live A Happier Retirement

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When It Comes To Optimistic Planning, I Prefer To Embrace A Realistic Lifespan 

The cautions to plan on funding retirement for extreme old age just never really worked for me. I’ve always been resistant to some common financial advice of calculating retirement planning out to an age over 90 to 100. Certainly everyone’s genetic and genealogical history is unique. In my circle I’ve come across nobody in that age bracket. 

Our unknown longevity is partly what motivated me to retire early. I chose to retire at a younger age instead of holding off with retirement. It’s quite simple to understand the draw. The earlier I retire, then the sooner I can live the life I want. A sooner retirement also means having more time to live a happier retirement. 

How much time we have is the issue that plagues all of us when completing our financial planning. 

Settling on a realistic age to accomplish what we want in life and to financially plan for

Longevity Comes At A Price That Must Be Considered

Obviously when running numbers through a retirement calculator we must plug in the number of years or an end age the portfolio needs to do its thing. Nobody wants to start retirement worrying about long-term financial shortcomings. I’d hear about it being best to set the calculator with enough years to reach age 100. That’s great if you have a portfolio that can support your preferred retirement budget for that long with 100% calculated success results. If you have the bucks, go ahead and plan to live to age 100. My portfolio, not so much.

On the other side, I didn’t want to recklessly cut myself short with an estimated early demise.

My father passed at age 70, his two  brothers both at 45, and his father (my grandfather) at age 32. All had different health related causes that came and took them quickly. I have lived my adult life knowing about the possibilities of an early death. Although I never blindly considered setting myself that short. I know people who had similar family early death dynamic and planned to die young, but I still wanted to concentrate on planning for a realistic lifespan.

As someone who didn’t have a 7-figure portfolio to retire on, I chose a more realistic lifespan for us to calculate against. My 100% retirement calculator success limit was around age 88 and then the percentage of success trailed off after that. I felt reaching even that age was pretty optimistic. It played a part in making my decision to retire earlier than waiting to cover another 10 years of hopeful thinking. I also came to the conclusion that age 85 was a more realistic goal and 90 was more or less padding. It was also easier to retire young believing that this snapshot in time can change with market swings, any additional earned income, or health changes over the decades ahead of me. Now when running numbers my retirement calculator results actually do show 100% success past age 90. But that doesn’t change my actual lifespan.

How I landed on a realistic end age

Family History

There are going to be some people who feel compelled to plan for the long-game because they’ve experienced a rare family member who reached the centenarian milestone. For my wife and I it isn’t a favorable longevity consideration. My wife’s side has a couple who reached 90 and 91. But for the majority of our genealogy, time on the planet is much shorter. If we had family history saying otherwise we would be more inclined to look farther into the age 90 range. We just don’t have any genetic longevity bump in our family history to hang onto.

We can always say we live healthier as a longevity consideration, but should we? I think we’ve also had and have a lot more environmental challenges. Not to mention there are new risks that go with that to offset healthier lifestyle choices. 

Our end date odds- What the professional actuaries tell us 

There are a lot of things that come into longevity play: Environment, where you’ve lived and live, genetics, occupation, income, health habits, healthcare access, risky behaviors, social engagement, social status, etc. Overall, the actuary’s jobs are to weigh an overall mortality value so that their clients, who are insurance companies, the government, pension funds, etc., don’t lose money. Talk about motivation to get something right. Billions of dollars are involved. What else in this world other than big bucks compels as much attention to detail and tested methods? The answer, not much. 

Projected mortality factors also change as we age. When looking at actuarial mortality tables I have an older age actuarial demise than someone younger than I am today. So much for the argument that young people today will live longer than their parents and grandparents. What are these “raise the retirement age to 70” politicians looking at? Apparently living healthier and all of the medical advances isn’t actuarially a positive for longevity vs. today’s new life risks. 

Running our life through a longevity prediction calculator

A closer look at our mortality can be done using a life expectancy calculator. You can plug in your unique lifestyle and yours along with family member medical values to see what your odds are from a medical perspective. We then can weigh its results against the broader high level actuary mortality results found. 

My life expectancy calculation does come out higher than what the actuary mortality tables predict. However, they never ask all the uniquely relevant health questions. Although some of our family members’ deaths have cancer involved because they were smokers, other genetically passed health issues that caused early deaths are not included in the calculator questions. That’s why my wife and I backward pad these results. 

Practicalities of having a realistic lifespan to improve retirement

No matter how we slice it, our longevity never comes close to an age in the upper 90s to 100. Having a delusional fear of realistically contemplating our eventual death or soaking up what financial planners, influencers, or politicians try to tell us doesn’t magically add to one’s true longevity. 

Obviously some of the places that having a reality based lifespan comes into play are financial. The other is evaluating how much time we have because we all want a life with meaningful purpose. It’s clear things can’t continually be put off because our time is fleeting and unknown. 

Financial relief for less retirement stress

Plugging my gender and birthdate into the Social Security life expectancy calculator gives me age 84.

The Livingto100.com medically oriented life expectancy calculator resulted in age 92 when answering the questions that it offered. But as I mentioned before, I think it doesn’t ask all of the necessary and unique family mortality questions. An issue that killed an uncle of mine when he was age 45 almost killed me a few years ago at age 61. It wasn’t a medical question included in its calculation. Even though it’s something that I’m now being treated for, it can still come knocking again. That’s why I feel I need to pad back a bit on its results.

Once deciding on a realistic lifespan figure, which I’ve landed on my best case age being 85 to a very optimistic 90, I can feel more confident in using that in my retirement calculations for portfolio funding. 

Another big personal and mortality based decision that must be made is when to start claiming Social Security. 

We pay into the Social Security system our entire working life and can claim our earned retirement benefit as early as age 62, full retirement age which for me is 66.8, a maximized benefit payment at age 70, or any time in between. It basically comes down to this. We can get more monthly smaller checks in life by claiming early, or less overall monthly checks but with a bigger payment amount if we wait. Payment amounts are tied to the actuarial results. The bet by Social Security is we will live to the actuary calculated mortality age. Die earlier and they save money. 

If we die later, depending on how earlier in age we started collecting our benefit we will soar past the break even point and can be left receiving less Social Security payouts overall had we waited to begin payments at age 70. Delaying our benefit start date is betting that we can beat the actuarial table. 

The Social Security break even point is only one side of it. There are other considerations that need to be factored. The amount of our portfolio distribution savings by claiming Social Security earlier and the resulting compounding portfolio gains over the years, the possible later reduction in Social Security payments due to congressional inaction to the projected shortcomings by year 2033, survivor benefit considerations, or some Social Security hating political Jackholes getting their way to end it all together. 

A happier retirement can come with financial relief. 

Using a realistic lifespan may result in seeing that with adjusted reality based financial inputs there’s more room in retirement portfolio distributions to live a little more richly in our senior years. Not to blow it, but share before we pass. My wife and I got to early retirement through frugal living and it’s a lifestyle that works for our happiness. Having room to bring a little happiness to some others we care about who are still in the game is a meaningful win. Which brings us to the second part.

Living a retirement life of purpose

I think many more people are starting to value experiences, family, friends, and living a life of purpose and meaning over just simply a life of accumulating more stuff. For myself, it has been amplified as I age. I prioritize celebrating the accomplishments of my children and grandkids, trying to do things that support my values and my community, looking at issues that unfairly challenged my life and aligning myself to make it easier for others to be victorious who are still oppressed by them today. 

We want to be remembered by our grandkids for what we do with them and for them while we’re still here. Not blindly spoil them, but show them we support their talents and encourage their aspirations. Applying a realistic lifespan approach to the remainder of our retirement allows us to freely do that more than if we were trying to overpreserve funds for a fictitious old age. 

It also lights a fire under our keisters because time is ever shrinking. We know to avoid holding back and not over preserve living, activities, and socially engaging with those we care about for a later or perceived better time. One that we should know is never promised. 

We now make a point to pay more attention to even smaller achievements by living in the moment instead of waiting until something grander that may not ever come. My family knows full well how it can end in an instant. Years ago we suddenly lost our son who passed away at the age of 21 from an unknown health issue. It was a time when we all believed there was all the time in the world to set aside our busy lives to celebrate what we have together. 

What if we beat all the odds and do live to 100?

Nobody wants to run dry of funds before they leave the planet. Once settled on a realistic lifespan we can’t just live on autopilot. Portfolio and budget management still needs to occur. Any shortcomings should be identified before it becomes a critical issue and then make necessary adjustments. 

I also happen to never count our home as part of our overall retirement portfolio. We do have to live somewhere. At some point it won’t meet our needs and we will then enter into that phase of late life planning. So much can and will change over the short and long-term so I am Ok with not having all the answers now. 

The older someone gets, the likelihood of requiring long-term care increases. So far that hasn’t been a big issue in our families as we seem to go earlier or any time in care is very brief. But as I tell my CFP whenever he brings it up, I have a $40 plan for that. A deep hot bathtub and a full bottle of decent bourbon. I know it’s a deflection based on how I feel about quality of life. Our family history has me less concerned about that now. Maybe my feelings will also change on the subject as I grow older and I will pin it down then. Like I mentioned, much can and will change and I’m Ok with not having all the answers about an unknown future. There’s too much to live for today.

Hello Retirement! Calling It A Leisure Freak Pivot

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I just can’t just walk away. A couple of months ago I said goodbye and left early retirement blogging behind. I’ve since come to terms with my change of status from aging out of early retirement to just regular retirement and realized I’m simply in the middle of a Leisure Freak pivot. My wife said she never believed I could completely walk away. When it comes to retirement, I just never seem to do things like most people do.

During my break it was easier in my quiet period to realize I’m still fully who I’ve always been. A Leisure Freak who beat the employment to old age system and wants to continue awakening others to the possibilities. Possibilities of something more than the standard conditioning that drives a lifelong narrative of success measured through employment grind productivity and consumption. 

Hello Retirement! Calling It A Leisure Freak Pivot

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The Leisure Freak Pivot, It’s a 2.0 Thing: An Evolved View

It Didn’t Take Long To Realize I Left Sharing On Leisure Freak In Haste

I called posting quits because after 13 years passing since my early retirement, the new world changes people need to take to reach FIRE (Financial Independence Retire Early) were outside of my own personal experience. Sharing real life success actions was what Leisure Freak was always about. 

I had pulled it off, ditching the rat race at the age of 51. But after over a decade of early retirement freedom I had aged into retirement with the mandatory and welcome application for Medicare. It admittingly messed with my brain a bit. Let’s say it’s another of life’s turning points. Needless to say, I didn’t take it as the positive and winning life event it really is.

Youthfully Starting Early Retirement
LF Tommy- Early Retirement Start 2009
Aging out of early retirement status into standard retirement
LF Tommy- Retirement Start 2023

 

I had to get used to considering that no matter how young I feel inside, that on paper by age or looking at my side-by-side then and now photos I’ve stepped into elderly status. Yikes! It still mentally stings to come out saying it. Early elderly maybe? Ya, that takes away some of the sting.

 

I decided to step away from blogging based on the feeling that although my FIRE story could still be inspirational, there are younger people right now in the FIRE zone pulling it off within today’s unique challenges.

Some of the things I did to be successful in my career and to retire early doesn’t even exist anymore.

For perspective, I was in my upper 30s when the internet became widely used and had hit the milestone of over 100,000 websites. For many, the mid to late 1990s seems like ancient times. My personal finance and early retirement research was done through reading books. The term “FIRE” for personal finance wasn’t used yet. I’m constantly reminded how things have gone through accelerated change since I decided to retire early and began my FIRE in 10 years plan in 1998 at the age of 40. 

A lot of the cutting edge tech I worked on to develop as an engineer is now common must-haves with today’s young adults who can’t remember a time in their lives without it. I certainly recognize that life today and the mechanics of reaching financial independence have evolved. So I decided to pass the torch and bow out. 

Something Happened Since My Saying Goodbye

In my time away from blog life I realized I’m too much of a FIRE aficionado and fan to just walk away. FIRE burns strong inside me. It’s such a positive force in my life and I truly believe it is worthy of everyone to work towards. Living in financial desperation as the same old consumerist and career dominated path dictates is no way to live. Living a full and enjoyable life while reaching employment liberation is still attainable.

During my transition period the past couple of months I would read great early retirement and personal finance articles and feel the power of the FIRE movement. Something I’m proudly a member of. I now see that it’s for life, not something that we simply age out of. 

It’s a belief system. One that comes with knowledge and a realization that there are systematic challenges that must be overcome. Along with a little contempt toward that system while leveraging a heavy dose of audacity. We can hate the game but need to play it smart to win. Even with all that has changed in the world over the past 25 years, the required tenets of reaching financial independence remain solidly the same as when I completed the early retirement journey. Thus here I am again, making this Leisure Freak pivot. 

In order for us to be content in retirement, it’s important to stay fully engaged in our world. In my case my world includes a large dose of FIRE. 

What Gets Us To FIRE Is Still Required In The Retirement Zone, It’s Just A Little Different

Age is a number that’s factored in like everything else in personal finance. Numbers that are relevant to our having a solid retirement plan. This age related number and retirement status change just happened to mess with my brain. 

What it takes to reach and then stay in the FIRE zone follows the same principles of budgeting, purposeful spending, investing, and mindset. Some of what I am personally seeing is changing for the better, while other changes add retirement challenges or just disappear.

Planning for your own aging out of early retirement status will happen to all of the FIRE successful. It’s another non-financial aspect when suddenly we get to see our created world of freedom from the otherside of youth. We all participate in the reality that time horizons continually condense. How we want to live through it all is up to us to shape.

It didn’t sneak up on me, I saw this age-related bugaboo coming and I think I kind of welcomed its messing with my brain. Sometimes I just need to force myself to feel things to fully understand them.

So what does Leisure Freak post-pivot look like?

More of the same, but I’ll try to share something useful from the other side of early retirement. My early retirement experience was never exactly in lockstep with a lot of FIRE websites anyway. What I hope is that I can share some different, useful, maybe even interesting perspectives. I actually feel more personally free about where and what Leisure Freak’s place is in all of this. 

 

I’m not really that surprised by my Leisure Freak pivot. I want to thank my bride for just keeping to herself what she already knew, that I was fooling myself and I was still fully in this. Thus allowing me the time to figure it out on my own. 

I’m looking forward to experiencing and sharing what comes next and a perspective from the other side of a successful early retirement. It’s all about trying to enjoy the journey and making the destination as great as our expectations.

I’m Aging Out Of Early Retirement So It’s Time For Full Retirement And Goodbye

optimism,

It has been a great ride, but I’m now aging out of early retirement. I’ll hit the official retirement age of 65 in a couple of months and have already done the mandatory signup for Medicare. While that little retirement benefit will save me a lot of money in my budget, it also depressingly makes it clear that I’ll officially be considered by governmental definitions as elderly. YIKES! 

I still feel like I am an early retiree. I used to feel like I was always 35 inside my head. Then that switched to a still youthful 55 as the years passed by and has held steady there. Feeling younger than our birthday dictates is one thing, reality the other. I’m more proud of being an early retiree than I am about my past career. A career is what we are conditioned to believe we need or have to do. Early retirement is what I decided I wanted to accomplish regardless of what the system demands. 

I’m Aging Out Of Early Retirement So It’s Time For Full Retirement And Goodbye

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I’m Aging Out Of Early Retirement, Time To Say Goodbye

The world moves quickly and we all change with it. After 13 years of early retirement and 9 years since starting Leisure Freak sharing what I did and any other tips to help others wanting to walk the path of FIRE, Leisure Freak will retire with me. It’s aging out of early retirement too.  In a way an early retirement of its own by a few months. I knew this day would come but until today it was always a tomorrow thing. But now is the right time.

Although my story and what I did to retire early is based on valid personal finance principles that still hold true today, much of my experience likely seems ancient with today’s challenges. It was painfully evident as I struggled to personally offer new relevant content. I have pretty much said all there is for me to say without sounding like an out of touch old coot. 

I happily accomplished much of my early retirement bucket list. There were some rewarding retirement gigs, lots of recreation, increased my social network in my community, and volunteer work. I’ve enjoyed learning all there was to having a website and sharing my early retirement story. I’ve been touched by all those who contacted me or commented that I helped them in their own journey or provided inspiration to create their own plan. I appreciate all of my Leisure Freak readers and all of the support I’ve received from my online friends and partners.

I still plan on following my favorite sites and staying in touch with my closest associates. I’ll remain reachable at my leisurefreaktommy gmail account. I’m looking forward to what comes next in retirement or I suppose what will be FIR instead of FIRE. I’m just now leaving the very worthy FIRE quest talking points to those who may offer more current experiences to meet today’s personal financial freedom challenges. 

Once again, thank you all

Leisure Freak Tommy

Mental and Physical Health Benefits of Working After Retirement

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Older man sitting at a desk.

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This article was contributed to Leisure Freak by freelance writer Olivia Farrell.

Did you ever notice that people seem to show signs of aging much more quickly once they retire? It’s as if they become old overnight. And there is a reason for this. While there are many good sides to retirement, like more free time, there are also downsides. Once people retire, they have no more everyday work to keep them mentally and physically active. We decided to tell you about some of the health benefits of working after retirement, especially early retirement, so that it might change your mind on this issue. However, you must keep in mind that this does not apply to every job. Some jobs are highly stressful, such as police officer or firefighter. Those and any other similarly stressful job you shouldn’t continue after retirement. Also, you don’t have to keep working the same job or work full-time. It’s all about balance.

Less likely to get a serious disease

Research has shown that people who keep working after retirement are less likely to get serious health issues. This is connected to the fact that you are active and have less downtime when you are working. Often when people retire, they let themselves go a little. They indulge in unhealthy foods, sleep more, and are overall less active. That can lead to diabetes, higher blood pressure, etc. Better health is a great incentive to keep working. As we said before, you don’t have to work full-time. Just a few hours daily are enough to keep you healthier and give you some structure and balance.

Working After Retirement-Older woman smiling.
One of the health benefits of working after retirement is an improved mood and mental health.

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You will be happier

There is a big difference between working because you have to and working because you want to. One of the main reasons people start to dislike their job and get frustrated is because it has become a necessity. They have to work because they need financial security. That can take the joy out of almost any job. Many people start off loving their job, but over the years, it just becomes another obligation they have to do. All of that changes once you retire. Then you can do your job again, not because you have to make money but because you can enjoy doing it instead. It allows you to reconnect with the love and excitement you once had about your job. It also gives you a great sense of freedom you didn’t have before. This is exceptionally beneficial for a person’s mental health.

You are more likely to stay in shape

One of the benefits of working after retirement is that you are more likely to stay in shape. People who have to get up every day and go to work are more motivated and disciplined. These are fundamental traits for anyone who wants to work out regularly. Staying in shape is a lot harder when you are retired. There is a good reason for this. A lot of people, when they retire, stop taking care of themselves because they have so much time on their hands but zero structure. And that can be very damaging. Working out is essential not just for physical health and looking good but also really important for a person’s mental health. Working out gives us energy and makes us more focused and happier people.

Older woman doing yoga.
You are more likely to stay in shape if you continue working. Alt-tag: Older woman doing yoga.

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Gives us financial security

You may think that financial security has nothing to do with the health benefits of working after retirement but let us explain. Financial security is directly tied to a person’s mental health. According to experts, one of the leading causes of depression and anxiety in people is fear or financial insecurity. When people retire, their income becomes smaller. That can be a cause of many mental health issues and severely damage the quality of your life. If you keep working, even part-time, you will save yourself all this trouble, and you won’t have to worry about having enough money. Also, this money will be handy if you develop unexpected health issues because healthcare, even with the best insurance possible, can still be very expensive.

It will keep you sharp

The first thing that usually declines for people who retire is their brain. Once they stop working, they also stop actively working on solving problems, which your brain needs to stay sharp. You have probably heard a doctor recommend that you should do a crossword puzzle every day. As with any other muscle in our body, our brain also needs exercise. Otherwise, it will slowly decay. People who keep working are more focused. They notice things better and also have a better memory. However, you can simply switch if you are tired of doing a tedious office job every day and don’t want to keep doing it. Once you retire from that job, look for something else. It can be any other job. What is important is that it stimulates your brain and keeps you active.

It’s important to still have a healthy social life once you retire.

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One of the health benefits of working after retirement is a healthy social life

One of the things retirees often complain about is loneliness. And loneliness quite often leads to depression, sometimes in a very severe form. Once they retire, many people lose touch with their coworkers/friends, which can really damage their social life. People are social beings, and to be happy, and mentally well, they need to have friends and a healthy social life. It’s much better to keep working and stay in touch with other people; it can do wonders for your mental health.

 

In conclusion

As you can see, there is so much more to life after retirement. Just because you filled certain requirements and now can retire doesn’t mean you have to do it. You should pay attention to the many mental and physical benefits of working after retirement. And as we said previously, you don’t have to work full time or even stay at the same job. Find a job after retirement that will be fulfilling and keeps you active.

Much thanks to Olivia Farrell for sharing this informative post with Leisure Freak readers.

Author bio:

Olivia Farrell is a freelance writer from New York but has spent her life traveling around the world, learning about health and wellness. She has honed her craft writing for Personal Trainers Dubai and now focuses on giving people the best advice for their mental and physical health.

8 Things to Think About For Finding the Perfect Place to Retire

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This article was contributed to Leisure Freak by writer Samantha Higgins.

Where you choose to retire will have a direct impact on how happy you are during this season of life. You worked hard to get to your retirement. Make it count by choosing the best place to live out these years. Here are eight lifestyle elements to consider before making a final decision on where to spend your retirement years.

8 Things to Think About For Finding the Perfect Place to RetireImage Source

Average Climate Conditions

One of the most important things to consider when choosing a retirement destination is the average climate. This is obviously a personal decision. While some people welcome the change of seasons, other individuals gravitate toward a warmer climate. Keep in mind that winter weather provides a different set of challenges as you age. For this reason, retirees tend to move to areas with warmer temperatures and more sunshine.

Cost of Living

Depending on how much money you have saved for retirement, the cost of living may weigh heavily in this decision. How much you need to set aside for housing, food, utility costs, and other expenses will influence how much discretionary income you have to enjoy the best years of your life. It is important to consider extra costs that you may have as you get older. For instance, you may need to lean on ridesharing services or public transportation if you decide to stop driving as you get older. There may also be extra fees associated with living in a retirement community if you choose to go that route.

Tax Breaks

Along with the cost of living averages, you will also want to look into specific tax breaks for different destinations on your list of possibilities. Some states are known for the tax breaks that they give seniors to make it more affordable. For instance, some states do not tax retirement or social security income. This is why it is important to do your research before landing on a final choice.

Healthcare Quality and Availability

As a senior citizen, it is paramount that you make quality healthcare a cornerstone of your priorities when choosing where to retire. The availability of excellent doctors, quality hospitals, and affordable assisted living facilities are all factors to check off your list. For instance, before pulling the trigger on a move to the Windy City, you will want to research dental offices in Chicago to find a provider to meet your unique needs as you age.

Proximity to Loved Ones

For many retirees, this time of life means finally being able to spend quality time with loved ones. Your proximity to loved ones during the retirement years will go a long way in ensuring your overall happiness and satisfaction with life. If your ideal retirement location is not close to family, be sure to choose a place that has access to a major airport so that you can travel easily.

Opportunities for Socialization

The research is clear that seniors that are social are more likely to live longer and happier lives. This makes it important that you choose a retirement destination that provides an abundance of opportunities to be social. Whether that be through continuing education classes, recreational or fitness activities, or events designed to bring seniors together to have fun, it is important to look at this availability.

Recreational Activities

In addition to engaging in social activities, you will also live a more fulfilling retirement if you are intentional about participating in a wide array of recreational activities. Amenities to look for include golf courses, hiking and walking trails, and fitness facilities that cater to seniors. Only you can decide what amenities are the most important to you.

Safety

Lastly, you will want to take time to research general safety in your list of top considerations before making a final decision. It is not unusual to feel more vulnerable to crime as you get older. This makes it important to research crime statistics for all of the areas that you are considering. Be sure to look at specific neighborhoods and not just a city as a whole, recognizing that these rates can vary greatly across a metropolitan area.

Bottom Line

These eight considerations will provide a good jumping-off point when narrowing down the best places for you to spend your golden years.

Thank you Samantha Higgins for contributing this informative article to Leisure Freak.

Planning For Retirement in a Post-Pandemic Era Author Bio:

Samantha Higgins is a professional writer with a passion for research, observation, and innovation. She is nurturing a growing family of twin boys in Portland, Oregon with her husband. She loves kayaking and reading creative non-fiction.   

Happy New Year 2023! Simple Financial Goal Tune Up Time

optimism,

The beginning of a new year can be full of resolutions and hopes of bettering our life. Part of that should include our personal finance priorities. Any financial plan needs to be reevaluated from time to time. The new year is the perfect time to perform our financial goal tune up. Best yet, it doesn’t necessarily require a major effort to ensure we’re on course to reach or stay on our financial plan. 

Happy New Year 2023! Simple Financial Goal Tune Up Time

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Simple Actions To Perform Our Financial Goal Tune Up

How’s that portfolio asset allocation looking?

Last year was certainly rough water with sentiments and the market swinging both up and down. Portfolios can enter into an evolution towards a different risk profile than we want. One that our investment risk tolerance isn’t aligned with. Our portfolio should maintain a stock to bond ratio designed to meet our financial goals while staying within our risk tolerance zone. 

The fight against inflation has brought rising interest rates and tighter monetary prices. There’s also worries of a possible recession, a disgusting war, global growth concerns, and politics both here and internationally that are kicking investment attitudes lower. The best way to weather the uncertainties is to make sure we have confidence in our plan. 

The new year is the perfect time to begin our financial goal tune up. It starts with evaluating our portfolio profile. Then taking action to rebalance asset allocations as necessary.

Anything new in our financial world?

A year’s time can bring a multitude of changes in one’s financial situation. We can experience changing life priorities, benefits, income, and expenses. Some good, some bad, but they all need to be evaluated for a successful financial goal tune up. 

While those still on the job might see a raise or cut in income, added required commute costs, or benefit changes. Even those of us on FIRE who are living life on our terms can see changes. 

We made some lifestyle changes to combat inflationary pressures that we hoped would be temporary, but will they? We’ve also seen a decrease in our health insurance costs because of our aging bringing about our transition to Medicare during this new year. 

The new year is the perfect time to make the time to plan for the necessary changes to maintain the perfect cash flow and ensure that we stay on our financial plan’s track. The optimism that comes with a new year can help us do what’s necessary to meet our financial goals while considering our current financial world realities.

What’s the emergency fund and cash reserves looking like?

Cash reserves in an emergency fund can ensure we stay on our financial path. Whatever our plan is, like having three to six months expenses of easily accessible cash in a safe, liquid cash account, it’s important to maintain that balance. 

We use a savings account. Money market deposit accounts or short-term certificates of deposit are also good considerations. My wife and I had to tap into our emergency fund last year. I came up short to meet higher than expected increases in property tax, homeowners insurance, and auto insurance. Ouch! It’s now noted and accounted for in our budget.

Our emergency cash reserve fund performed its duty as planned when needed as our first defense against financial setback. But now it requires replenishment to our planned allotment because it’s likely to be relied on again in the future. This emergency cash is our financial plan success insurance and an important part of our financial goal tune up.

Does your new year’s portfolio balance still measure up to your long-term income expectations?

Using our current portfolio amount in a retirement calculator is just a snapshot in time. Last year’s market shellacking was rough. Although I have hope of market recovery, seeing now if our numbers are still able to meet expected income expectations for as long as we are on the planet is a good way to see what adjustments, if any, are needed. 

Using the current portfolio numbers against our updated life expectancy years (we are all a year older) can be an eye opening exercise. Either there’s no issue to concern over or something has got to happen to improve the odds. 

If an asset allocation rebalance has already been determined as necessary, then checking progress later in the year will also be prudent. Especially if odds of portfolio success have turned against you after the dismal past year’s market performance. 

Ready for the inevitable and coming fast income tax filing? 

The best financial plan is one where we get to keep as much of our money as we’re legally entitled to. I’m happily reminded each year that our retired tax rate is less than the one we were in when we made all of our 401K and IRA contributions. Even so, I still don’t want to miss anything.

The other side of this is avoiding IRS scrutiny over any missed income on our tax return. The IRS always comes calling years after filing. This gift also brings interest and possibly penalties when our memories and records can be harder to find. 

However, the most immediate benefit of preparing for tax time earlier than later is that organizing the necessary documents reduces stress and allows us to be on track. As documents come in, I immediately put them in my Tax Folders. We use an actual manilla folder for postal and a digital folder for the electronic stuff received or downloaded. All are recorded against a checklist to make sure we have and get everything. 

If things go sideways, are beneficiary, POA, and other legal designations up to date?

I list this issue last because it’s the downer of an otherwise optimistic new year financial goal tune up. Many of us put this little gem off because, you know, becoming incapacitated or death is a bummer. But it’s an important part of our financial planning. Having a Will established is a great way to make sure that what we have goes where we want it to go. Having beneficiaries on our accounts will take priority of anything listed in a Will and most likely resolved quicker. All of our accounts both large and small should have beneficiaries listed. 

My wife was surprised to find that her old job ESOP only had me as a primary beneficiary even though there were secondary beneficiary slots to fill in. She then added our daughters in case something also happened to me. 

We’ve also experienced the bad fortune of a parent having none of us siblings listed as having Power of Attorney (POA). It created a huge problem maintaining her mortgage payments after a stroke incapacitated her and then her passing. We had to work under a “Guardianship” condition which was time-consuming and costly. 

Use this financial goal tune up time to consider whether something has been missed in this area or requires updating due to major life changes since they were initially established. 

 

A financial goal tune up is far simpler than an overhaul. Keeping the plan maintained and running smoothly costs much less than a surprise failure. Use having optimism that this new year will be even better than last as motivation. Take time to perform a few actions to ensure you’re still on your personal finance track.