My future is perfect for me! In English, we use future perfect tense to talk about actions that will be finished before some point in the future. In my case, it is less than three (3) years away. My future is certain, however the duration is not! I planned for thirty (30) years in retirement just in case I am right! I plan to have a perfect retirement, would you like to know how?
In the beginning, I had a long list of things I wanted to accomplish. There were many “wants” and “needs” on my list. I wanted the big house on the hill, nice cars which are usually identified by letters (BMW and MB), European and beach vacations, jewelry and lots of high technology toys. I succumbed to many of these “wants” and accumulated many of them. What is the use of money if not to buy the things you always wanted? Over time, I sold them off and realized what was really important.
In your late thirties (30’s), you realize that you cannot have everything and you start to focus on your long term goals more seriously. Sure, I achieved financial independence, but I could easily blow all of it. I started to work on even bigger goals or some might say a better asset allocation. I wanted make sure I had what I needed to live reasonably well in retirement well into my nineties (90’s). I always believed in multiple income streams, but I took it even further!
What to do?
The very first thing I did was divide my expenses into “wants” and “needs”. It is a good strategy for budgeting at just about every stage of your life, but I was looking at my long range goals and needed to make sure I had enough to live well for a very long time. What triggered the reflection? It was the volatile stock market in the last twenty-thirty years. The stock market has cycles, but I did not want a down cycle to keep me from some purchase or vacation. I started planning a much more stable future.
When you think about your “wants” and “needs”, you make better choices. That was not enough because I did not want to make choices in retirement. I could be eighty-five (85) years old and planning my last trip or financing my future grandchildren’s education. As you get older, you realize there may not be a next year or next time so every choice denied is significant. I wanted to have stable income to fund my “needs” and use my IRA and brokerage accounts for my “wants”.
Aside from my savings, I wanted steady income that did not fluctuate with the economy or stock market. My wife I had more than thirty (30) years in Social Security, but I was not going to collect benefits until we were seventy (70) years old. Although I did not enter teaching just for the retirement, it was a great bonus! It was a great fit into my scheme of multiple income streams. We can live comfortably on Social Security and pension to meet our “needs”.
Our needs are low because we will have no mortgage or any other debt. We downsized about seventeen years ago to a two (2) bedroom and den townhouse. I expect to ove to a single story home/condominium in the next five –ten years, but I expect to pay cash for the new place. If I opt to take a mortgage, I will find an (conservative) investment for the cash. All my financial planning whether the purchase of two (2) cars or downsizing was intended to lower our expenses and pay off any debt by the time I retire (again).
My investment strategy is for growth, but it is a mixture of aggressive and conservative investments. I invested in healthcare, biotech, large, mid and small cap stocks, international index funds and even some individual stocks. My investment return ranges from six (6) to thirty-five (35) percent for 2014. At this rate, I will have a lot of choices in retirement even if I underestimate my lifespan. Planning has worked well so far, I think it keep working in the future.
I even went so far to plan what I will do in retirement. The best thing about retirement is the free time to pursue various things you were always too busy to pursue. I will still keep my daily exercise routine for two reasons, one for the activity and two for my health. If I am not healthy the other things do not matter anyway! I want to do volunteering on a regular basis even if it is only once a week. I think I will start small and build from there. I would not be surprised if I kept writing too!
As I said in my first sentence, my future is perfect for me! After all it is my plan, goals and lastly my money (investments)! I made all the choices along with my wife and we get to enjoy the fruits of those choices in the future. The best part of choices is you can change any part of and create new choices. This would be severely limited if we did not have the income though. Is your future on its way to perfect? Have you made the choices to start the process? My future is perfect for me!
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