Practicing retirement
More than 10,000 baby boomers a day are turning 65, a pattern that will continue for the next 19 years. Many expect to keep working since 40 percent are not sure they will have enough money to retire.
Robert Schulz saw the trend when he started researching retirement issues and making a plan for he and his wife. After attending several retirement seminars he realized many of the programs were trying to sell him products he didn’t need.
The corporation where he worked had more than 900 employees over the age of 50 and he was one of them. He talked with his boss about the idea of a retirement planning seminar for this group and after more research he presented his first class. It filled up immediately, as did the next one and the next one.
Presenting information about the complexities of retirement has become his life calling. “I connect people with information and with resources. That’s what gives me joy. I am a connector, not a financial planner. I have lots to give and nothing to sell,” Schulz said.
TRIBUTARY
What do you see people struggling with during your seminars?
SCHULZ
They are overwhelmed. When I finish different segments I ask if there are any questions and it’s kind of like a deer in headlights. “Oh my gosh I had no idea what was involved in this, not only financially but also how complicated Medicare can be.” We tend to think that Social Security is one plan and one benefit and it’s not. There’s more to it.
And then we discuss the steep costs of long-term care. Then I ask them what are they going to do when they quit work. Guys especially who have worked all their life and never had any hobbies, they suddenly realize, “Oh my gosh how am I going to fill my time?”
Then they start to realize how much money it’s going to take to retire. That in itself is the real shocker. They realize that because of our consumer economy that they have been spending the money they should have been saving for retirement.
There are more than 75 million people who will be retiring in the next few years and Social Security will not be enough to pay their bills. What are these people going to do? People can’t ignore this anymore.
Many say, “Well my plan is to keep working.” Today most people are not able to make that choice. It’s made for them. It’s not a choice. You will either be laid off, or your health will become an issue. You need to have a plan for when that happens.
TRIBUTARY
How did they get so far behind?
SCHULZ
The problem is this. We haven’t become good money managers. More simply, we tend to spend more than we make. We all got caught up in living the good life due to the relentless marketing to the consumer to buy more and more.
It’s a discipline issue. If you don’t save today, you won’t have that money for tomorrow. If you have a marriage with one saver and one spender that is certainly better than having two spenders.
In my parent’s generation, you quit working and you died. There wasn’t a need to have all this money to last you all those years. Now everyone is living much longer, which requires more savings.
In the past you had what’s known as the three-legged stool: a pension, Social Security and individual savings and that was enough. The pension has gone the way of the Dodo bird. We are the first generation that didn’t go through the Depression. We aren’t a generation of savers.
TRIBUTARY
So planning and saving have become a key life discipline?
SCHULZ
I don’t have answers to what are very unique individual situations. All I want to do is give them some things to think about. At least they can start to make educated decisions and not have somebody come in and say you need to do this, or buy this, or here is how we can make your investment double over the next few years.
Retirement doesn’t work that way. Life happens, right? Health changes; you need a new car; kids move back home; replace a roof on your home. You are constantly adjusting for these things based on a fixed income.
Many people that come to my classes can still turn this around but they have to make some really hard decisions about their lifestyle. A person can save significant amounts of money in the five or ten years they have left before retirement.
My message to the participants is, if you get your act together, you can dramatically change the quality of your retirement.
Ask yourself what are you spending now? We’ll my experience is that if you don’t change your spending habits you will end up spending that same amount in retirement. So if you are not saving 20 percent of your income now, you are going to need 100 percent of your income in retirement.
That’s why I say you have to start practicing for retirement by starting to limit spending to needs and not wants.
Let’s say it costs about $50,000 a year to live, just for the necessities ($4,200 a month). Where is that money going to come from in retirement? Social Security might give a couple $25,000 to $40,00 a year depending on their earnings history. So some will be in pretty good shape.
But a lot of people aren’t in the $40,000 benefit category. Maybe there was only one wage earner, and no pension. So if you are counting on Social Security for half of the $50,00 in expenses, you will come up short.
Even for at the high end of the wage scale it can be serious. The average income in the county where I live is $75,000 a year and let’s suppose you want that much a year for retirement. To maintain that lifestyle, Social Security might give you $40,000. Where’s the other $35,000 going to come from? You can only safely take three to four percent a year from your retirement savings without running out of cash during retirement. If you had a million dollars saved, four percent of a million dollars is $40,000 a year that you could withdraw.
People don’t have anywhere near that amount of money saved. The average 401(k) has accumulated about $90,000. The average amount of savings for Americans is $25,000. This is going to last them 30 years in retirement?
So now we are seeing people move to another country, or back to the Midwest where the cost of living is lower. Or, try and stay employed, or start their own business.
TRIBUTARY
You ask the participants what they will do for the rest of their life after leaving the workforce? What are they considering?
SCHULZ
I have a lot of hobbies that I knew I wanted to spend more time at when I retired. I’m busier than ever but now I get to choose what I want to do. But there are many people who have only worked and have few hobbies. Golf? It’s not an end-all for living and it’s expensive.
I tell a lot of people: practice your retirement before you retire. Start thinking about what you will be doing. If you are thinking about relocating, start visiting there at different times of the year. If you think traveling the country in a mobile home would be fun, then rent one and see what’s it’s like. Traveling can be expensive so do it while you have income — and your health.
TRIBUTARY
How does one know when they are ready to retire?
SCHULZ
Finances are one indicator. You are at a point where you think you can afford it.
Another is that the frustration of your day job starts to grate on you. It’s not enjoyable any more and you start thinking am I ever truly going to get to enjoy the things that I want to do?
It may not be a choice. It may be made for you. Then people are resentful, angry, scared. It’s always a shock and they need time to recover from that.
Maybe you have a vision for what you want to do. Slow down enough to look around and listen to your spirit. I recommend reading “Claiming Your Place at the Fire.” (See link below).
TRIBUTARY
You continue to pursue your research on retirement.
SCHULZ
I started out clipping newspaper articles like my mother had done. She was one of those people that clipped newspaper articles to send to her children. She would send us articles on various issues that she wanted to get our attention about. I tend to be a guy that before I get into something I research the heck out of it.
I have decided to raise chickens so for the last two years I read every book I could get my hands on about raising chickens. I tend to be a little bit to be a perfectionist. I want to do it right.
I send a list of new retirement articles every week for free to the people who have been to my seminars. A new article I just found is called “Seven Misconceptions About Retired Life” by Emily Brandon.
I had been doing these classes for about a year and I thought, wow I really love this. I had found my passion. My goal was never to make a lot of money. So what could I do? So I started doing some of the classes for free. And I also approached companies to see if they would pay me to present my program to their employees. That is actually what has worked out.
If you want to be added to my email distribution list and receive free referrals to other information about retirement every week, send an email to ” [email protected] and give me your personal email address. Using your work email may not work because companies tend to block incoming personal emails.
I will also notify you of upcoming seminars.
__________
May you always have work for your hands to do.
May your pockets hold always a coin or two.
May the sun shine bright on your windowpane.
May the rainbow be certain to follow each rain.
May the hand of a friend always be near you.
And may God fill your heart with gladness to cheer you.
— Irish Retirement Blessing (author unknown)
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Schulz was born in Abilene, Texas, the son of an Army officer. He attended 27 different schools before he attended college at the University of Iowa. After two tours in Vietnam as a fixed-wing pilot me got an MBA at the University of Texas. He spent his career in corporate human resources positions.
The Smartest Retirement Book You’ll Ever Read
The Smartest Investment Book You’ll Ever Read: The Proven Way to Beat the “Pros” and Take Control of Your Financial Future
Claiming Your Place at the Fire: Living the Second Half of Your Life on Purpose
Recommended links
Shulz’s library of articles for retirement planning.
Social Security Administration website
“Taking the Mystery Out of Retirement Planning”
Free retirement planning workbook from U.S. Department of Labor, Employee Benefits Security Administration
Retirement Living Information Center
Are boomer’s ready for retirement?
Social Security Administration Retirement Planner
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