Balancing the Retirement Equation

More and more people are retiring than ever before. This is due to the fact Baby Boomers are now at this stage of their life, and their kids, the X Generation, are already planning an earlier retirement than their parents’. Most Boomers anticipated retirement in a more traditional fashion; with safe investments and pension plans. The Gen-X crowd is faced with a different reality; less and less security regarding government and corporate pension plans.

Then there is the Y Generation who has a completely different outlook on their working years. Gen-Yers seek balance by creating for themselves a situation where work and retirement are interlaced. Instead of working for forty years, then being retired for how ever many healthy years they have left, they prefer to incorporate a lot of travel, leisure and vacation into each working year. They’re on to something…

So the Gen-Yers might be less preoccupied by retirement, but what about the Boomers who are already there and the Gen-Xers who are seriously thinking about it? What Retirement Equation would help them balance all the aspects of this very important life stage?

Of course we have to consider the basic financial equations:
– Your revenues must be greater than your expenses
– Your accumulated wealth must yield that amount of revenues
– The yielded revenues must last for more years than your lifespan
– The yielded revenues must also cover probable increasing health expenses.

Financial Planners make a living helping us calculate the large number of variables necessary to sort out all financial aspects of our retirement. It’s a good thing we have them, since this is a very complex procedure, and our livelihood depends on it. But since crystal balls, to my knowledge, do not exist in real life, most of the bases of calculation are unfortunately approximate.

Also, the «life-changing» issues are not necessarily addressed in traditional financial planning. Think about this; when you work, you spend each week at least forty hours working and ten hours commuting. This leaves you much less time to spend money. So what happens when you have an extra 2500 hours each year for the rest of your life? And how about all the dreams you harboured for forty years, just waiting for retirement to finally accomplish? I am guessing they probably cost money.

So Retirees don’t exactly know how long their retirement will be or how healthy they will be, and they have to figure out which dreams are possible and what they will do with 2500 extra hours per year. On top of that, no one really knows how they will react to such a huge life change (even if we are each convinced we do). Basically, the reality or retirement is a good amount of speculation.

Then, what is the solution to achieve a successful retirement? In my humble opinion, retirement should be viewed as a business, same as a successful family life.

First, make a «business plan»: write down how long before you retire, will it be gradual or not, what are your mandatory expenses, how many people must be sustained, what activities you will start doing, what purchases you will be making, etc.

Second, make a daily, monthly and yearly schedule, for at least the first five years. Make sure to include time slots for all the activities you wish to take up, as well as timeslots for resting. Also remember to keep some time aside for intellectually challenging activities such as chess or taking a class, and rewarding activities such as volunteering or even very part-time work.

Third, choose between the two main options for generating residual income:
– financial investments
– business revenues.

Either one should live up to the following criteria:
– once created, your money works for you with minimal effort on your part
– the revenues are safe and stable
– the money-generating vehicle is simple and autonomously manageable
– the vehicle allows you freedom of choice and movement
– the vehicle will continue to yield revenues indefinitely
– the vehicle allows you to increase your revenue at will.

Fourth, find out what it will take to put in place and develop your chosen vehicle. Then seek out the best resources and/or experts to support you. And finally invest the necessary time and money to create your vehicle and take it to your desired level of revenues.

I truly believe retirement can, and should, be everything each of us dreams of. The secret is to start balancing the equation before we get there if possible, and know that it is never too late to make it work.

I invite you to visit this page of our website to find out more about one example of a «Retirement Equation Balancing Vehicle».

For more in depth and detailed information, Phoenix Alliance offers a FREE specialized «How to use a Home-Based Franchise to create the retirement of your dreams» seminar to its registered members.

Interesting outside link: « 7 equations to build a secure retirement »