Micawber’s Favorites – September 9, 2017

Links to some of my favorite recent articles on money and life:

The Biggest Oversight in Most American’s Retirement Planning by Scott Hanson at Kiplinger

Financial planner Scott Hanson sees many people who do a decent job of planning financially for retirement but spend almost no time planning their post-retirement lives. I liken this to spending all your time and money planning a wedding and none planning a marriage. You can be financially prepared for retirement and still not be prepared. This article offers some ideas on preparing for post-retirement life.

Valuable Lessons from My First Year of Freedom by The Mad Fientist

One year after early retirement The Mad Scientist looks back on lessons learned. My favorite is lesson #1: Have a project in place that you’ve already started and are passionate about so it can fill the void in your life after you leave your job. It is important to have something interesting to wake up to everyday, especially in retirement. Starting a project before you retire can prevent you from falling into bad habits with all that extra free time.

6 Lessons from a Recent Retiree by David Oakville from Rob Carrick’s Facebook Page

My retirement was well planned but here’s what I’ve learned since my wife and I retired a little over two years ago:

1. You don’t need as much money as the financial industry says you do. Sure, more money is better than less, but we sacrificed a lot to max out our RRSPs every year and then also max out TFSAs when they came along. I see now that we needn’t have sacrificed so much while working. In fact, I find we have more money to spend in retirement than we had when we were working. Not having to furiously save for retirement frees up a lot of cash.
2. We are BUSY in retirement. Pre-retirement, I did worry about not having enough to fill the days, but there is so much to do it’s hard to fit it all in. Of course, unlike work, no one is going to bring you something to do every day. You have to go out and find it yourself. The upside is you get to choose what brings you the most joy. Hiking, volunteering, gardening, travelling, twice a week at the gym, and joyous times spent with our grandchildren. As I often say: “If you are bored in retirement you aren’t really trying.”
3. The stress reduction for me was huge. Years of working to meet ever higher demands with continually reduced resources and budgets was leading to more stress than I realized. Now, I call the shots and if I don’t want to do something, then I don’t do it.
4. It is psychologically hard to spend down what you’ve spent decades saving. When the time comes to retire, it is remarkably hard to change your mindset from saving for the future to spending for now. The reality is that we only have so many healthy, disability-free years left. If you didn’t save all that money so you could spend it [when healthy], why did you save it? Remember: “When you are retired, the future is now.
5. Understand that you’ll need some time to figure out what to do with the rest of your life.
6. I was nervous before making the jump to retirement, but now that I’ve done it I wonder what I was worried about. My retired friends say the same thing.

Before I Die by Fritz Gilbert at The Retirement Manifesto

Answering the question “Before I Die…” is a great way to get you dreaming about the possibilities available after you retire. Many people enjoy long retirements with relatively good health. Retirement is a time to fulfill dreams, not to disappear and fade away. What do you want to accomplish after you retire?

5 Top Habits of the Best Retirement Savers by Matthew Frankel at The Motley Fool

So far we have focused on post-retirement life planning, but not having enough money in retirement can limit your options. You need to plan both financially and in other ways. This article looks at those who are very good at saving for retirement and identifies the top 5 habits they have that allow them to save for the future.

Lower Fees are Great If You Actually Get Them by M.P Dunleavey at The New York Times

High investment fees can significantly lower the resources you have available during retirement. Investment fees are dropping and index funds are now available with extremely low fees. However, some people are paying many times more than they need to when nearly identical products are available for much less. The lesson here is that you need to be aware of the investment fees you are paying and be willing to shop around for a better deal.