Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.
With this rule, I want to conclude our discussions with a final rule to help sum up all the others. I once answered the following question on an online forum:
“What’s the one thing that makes you the happiest in retirement?”
Given all the rules we have discussed, if I had to circle back and pick just one, what would it be?
What’s the cornerstone? What’s the base upon which all the other rules stand and can be built? What’s the one thing that, if you had it nailed down, would make all the other things easier and more possible? Is it downsizing, budgeting, investing, routines, diet, exercise, pursuing meaning, or something else?
Certainly, all those are very important. But my answer was simple:
“Of all the retirees I know, the ones with guaranteed income are the happiest.”
I went on to explain that this means having enough combined income from Social Security, pensions, and annuities to cover basic bills for a lifetime. After that, staying productive, healthy, and fulfilled are important, but without the core security of knowing that financially, you will have your essential bills paid – i.e. a roof over your head, food, transportation, healthcare, heating/cooling, etc. – it’s just not the same.
My two most notable retiree heroes – inspirational “someday I want to live like them” friends – both have significant sources of guaranteed income as well as other investments and part-time love-to-do work.
One of the two regularly travels internationally with his wife, yet still has managed to accumulate millions in legacy for his family. My wife and I joined them on a recent trip to Maui. Though now in his mid-80s, we snorkeled coral reefs together and biked through the clouds down the 21-mile face of Mt. Haleakala. He and his wife are undaunted. Free from gnawing worry about the condition of personal finances, they are focused on living fully and maximizing quality time spent with the people they care about most. Their positive outlook and will to finish strong offer a shining example of how fulfilling and enjoyable late life can be.
My other top retiree hero is more of a 48-contiguous-states kind of guy. But, he is always posting on social media the amazing things he and his wife are doing, places they are going, wineries, bed-and-breakfasts, time with grandkids, and on and on. On many occasions, I have found myself taken aback by the exceedingly high level of overall joy in his world. To say that his life is overflowing with meaning is obvious. It’s the scope of it that is so amazing.
I remember asking him, “What’s the secret?”
Unprompted, he smiled widely, clapped, and rubbed his hands together, and exclaimed, “I have an annuity, baby!” He went on to explain that he didn’t have to worry about the market or many of the things other people worry about. He knew he and his wife were going to get a check in the mail every month to cover their expenses for the rest of their lives.
This is security. The freedom to live fully day-to-day without financial worry.
It makes fulfillment and enjoyment that much more possible when you are not in angst about buying groceries, making ends meet, or otherwise running out of money. Add to this the concept of planting a money tree – that you do not disturb – to grow wealth throughout retirement, and the circle is complete: income and growth. Truly, this is having your cake and eating it too.
But if I had to pick just one – the beachhead, the foothold, the stepping-off place – the answer is income.
Take care of yourself. Take care of your spouse. Make sure there will always be money coming in to cover the inevitable bills that must be paid. This will provide you with a lasting means of dignity, freedom, peace of mind, and shelter from the rain.
From such a foundation, build your best and happiest future retirement.
Questions or comments?
I can be reached at this link – contact Ted Stevenot.