There are three goals when it comes to retirement planning: longevity, lifestyle and legacy.
Longevity is the goal of running out of life before you run out of money (and not the other way around). It is the primary, non-negotiable goal when you consider retirement. Planning to live for a long time is the default scenario from a financial planning standpoint. Too many retirees scoff at the idea of living past their nineties. They look at their parents as a guideline. However, rapid advancements in life-saving and life-extending healthcare technology skew the trend towards a long life. Living for a long time with health expenses and long-term care needs is a worst-case scenario.
Lifestyle pertains to the goals of making the very best memories in retirement. If longevity is the staff of life, lifestyle is the spice of life. We take care of the basics when we plan for essential, longevity-focused expenses. We take care of the extras, when we plan for the discretionary expenditures that add style to our long life. These lifestyle goals are not rigid. There is an ideal and an acceptable lifestyle that we can plan for. In other words, three weeks in Tuscany would be the ideal trip. Two weeks in Napa would be acceptable.
Legacy is the goal to leave something significant behind at the end of long, well-lived life. You can’t take it with you when you shuffle off this mortal coil. Family, charity, religious institution or alma mater are just a few of the possible recipients of your largesse. Often clients think you have to be a Rockefeller or Vanderbilt to be concerned about your legacy. Not at all. Charities and foundations benefit from small gifts. Furthermore, charitable organization often have tax-efficient ways to create income for you from you donation, while you are still alive. Finally, with some simple advanced planning, life insurance can be used to efficiently maximize money you leave for your loved ones.
But none of this matter if you can’t breathe.
Before takeoff, the flight attendant robotically goes through the flight safety instructions. She instructs you to put your oxygen mask on first, before helping others. Why is that advice there? Two reasons, I imagine. First, it’s only logical that if you can’t breathe you are no help to others. Second, it’s our natural instinct to put our loved ones first, especially in a critical time.
If you’ve neglected to look at your goals regarding longevity, lifestyle and legacy you aren’t helping the situation. In fact, you may be putting yourself on a course to be more of a burden than a blessing in retirement. Whatever urgent task you are taking care of, put it off.
Stop and take care of yourself. If we can help, feel free to contact us.