Photo courtesy of the Facebook Page of Planning for Retirement
There is an art and a science to retirement planning, both of which are extremely important. Both components are necessary if you ever hope to succeed in mastering your retirement. Here’s what I mean.
To see what I mean about the art and science of mastering your retirement, consider these two examples:
Example #1: The science
Consider this simple mathematical problem: 5 + 2 x 10 – 1 x 100. What is the answer?
It’s hard to work this out, isn’t it, without knowing the order of operations.
Now add some order to the problem: [5 + (2 x 10)] – (1 x 100).
The correct answer is -75. Things need to be done in a particular order, or you end up with completely different results, just as we see in the five possible answers above.
With this in mind, what are the really important mathematical laws that need to be applied to every retirement planning situation, and in what order should they be applied? This is what I refer to as the science of retirement planning.
More on this to come, but now let’s look at a second example.
Example #2: The art
How to assemble a jigsaw puzzle? A jigsaw puzzle is often a beautiful, colorful image with significant detail. All of the pieces, when put together properly, create this wonderful image that often invokes a warm, fuzzy and sometimes sentimental emotions to the person assembling the puzzle. Yet, before you begin, this image is chaos, broken into hundreds or thousands of different pieces.
With this thought in mind, what if that finished jigsaw puzzle were a collage of the images, events, people, and memories of your retirement years? What would this picture look like for you? Is it colorful? Is it detailed? Is it diverse? Does it tell a story? Is there a message to others? When you look at it, what kind of emotion does it evoke in you? Does it evoke a sense of pride, accomplishment, satisfaction, or most importantly, does it evoke a sense of peace?
Regardless of the stage you are at in your life today, you are, in essence, assembling your own jigsaw puzzle. You will have already created several sections of the puzzle, and this next phase of your life will represent the next section of the puzzle.
Now let’s turn our attention back to assembling this puzzle. When thinking of your retirement years today, you may have many different ideas in mind. Your spouse may have many additional ideas in mind. Now you have many pieces of the puzzle in front of you, but you are unsure of where and how to begin to put these pieces together.
With a puzzle, the first thing you would do is turn all of the pieces over so that you can see them. The next thing you may do is organize them into meaningful groups. You may put all of the outside pieces into one group, and you may create other groups of other similar-colored pieces. Once you put all of the outside pieces together, you may then begin to work on one section of the puzzle at a time.
What if we applied the same approach to the “art” of your retirement plan?
What if you laid out all of the pieces of your retirement plan by making a list of all of the many different things you wish to do, the places you wish to see, the people you wish to be close to, and the things you’d like to learn? These are the different pieces of the puzzle.
What if you then began to prioritize each of these items, by placing them into various priority groups? The highest priority group may be those things you wish to do first. The second highest priority group may be those things you wish to do three years from now. There may also be things on these lists that you want to do each and every year, such as visiting with the kids and grandkids. In the same way you are organizing the pieces of the puzzle, you begin to organize the pieces of your retirement years.
This is the “art” of your retirement planning process: assembling a wonderful, detailed and diverse picture of this next phase of your life.