EPISODE #001
Balancing Life Now While Having ‘Enough’ Later
Sam’s New Freedom
“The period between age 50 and elderly is best described as three overlapping periods, not defined by age.” – Dr. George Schofield
New Freedom
Often begins with becoming empty nesters around age 50, totally unaccustomed to the new discretionary space, income, time and possibilities.
Do you define retirement by phases on a journey or by rule changes on certain birthdays?
Cruising
“Everyone ends up somewhere. A few people end up somewhere on purpose.” – Andy Stanley
“Urgent” things tend to take up our time. “Important” things can tend to be put off until they BECOME “Urgent”.
Cruising can mean – an intentional fun trip on a boat or putting life on autopilot. Would you board a ship that had no destination in mind once it casts off?
Milestones
Take advantage of key life events as reminders to regenerate, reflect, regroup, and write down. The ‘Important’ things require being intentional and on purpose from time to time.
Reframe Retirement
What if retirement was a enjoyable ‘journey’ all along the way vs. a ‘march’?
Nerds and Free Spirits unite – at the risk of creating a paradox that destroys the universe. Grab a pencil and possibly fire up a spreadsheet….
Break down spending in to (3) categories:
- Basic Needs
- Extra Wants
- Aspirational Wishes
Round up sources of income/cashflow now and through retirement:
- Earnings from work (Human Capital)
- Pensions and Social Security (Social Capital)
- Funds from Savings and Investment Accounts (Financial Capital)
Start to take control of your journey by comparing different scenarios of wants, needs, and wishes – and the associated cashflow tradeoffs.
Retirement Life Phases
“The period between age 50 and elderly is best described as three overlapping periods, not defined by age.” – Dr. George Schofield
New Freedom
Often begins with becoming empty nesters around age 50, totally unaccustomed to the new discretionary space, income, time and possibilities.
New Horizons
Involves greater focus and clarity about where we want to take the freedom, what we’re curious about, how we want to spend our energy and how we’re going to move into being good at this new phase of life.
New Simplicity
Don’t want so many complicating things in our lives. Large houses and their maintenance; too many relationships that don’t nurture us; excessive volunteer commitments that used to be meaningful but aren’t anymore; physical clutter we’ve held onto for too long and dreams and intentions that no longer hold appeal or punch for us.
Retirement ‘Birthdays’
Age 50
Now’s the time to start making catch-up contributions of up to $1,000 annually to your Individual Retirement Account (IRA), or $6,500 annually to your qualified employer-sponsored plan.
Age 55
At age 55, you may be eligible to start receiving penalty-free distributions from a qualified retirement plan if you’ve stopped working.
Age 59 ½
You’re now eligible for penalty-free distributions from your IRA, 457(b), pension plan or qualified employer-sponsored plan
Age 62
At age 62, you can now claim Social Security benefits, but think carefully before you do! Collecting your benefits early may reduce them by as much as 30%. Waiting until your full retirement age will ensure you collect your full benefits.
Age 65
You’re eligible for Medicare! Actually, you’re eligible to sign up three months before your 65th birthday. Be sure to sign up early as waiting can lead to higher premiums.
Ages 66-67
You’ll reach full retirement age at some point between ages 66 and 67. Reaching your full retirement age means you qualify to receive full Social Security benefits
Age 70
If you haven’t already, file for Social Security benefits! Your Social Security benefits won’t increase after you reach age 70, so there’s no reason to wait any longer
Age 72
When you turn age 72, you’ll need to start taking your Required Minimum Distribution (RMD) from your IRA or employer-sponsored plan. You can wait to take your RMD for the first year until April of the second year. However, you must take the RMD for the second and all subsequent years by December 31 of that year. If you still work for your employer, you may be able to delay taking your RMD from their plan. Failure to take your RMD on time can result in a 50% tax penalty to the amount you should have taken.
Resources
BOOK – Visioneering: God’s Blueprint for Developing and Maintaining Vision by Andy Stanley
BOOK – How Do I Get There from Here?: Planning for Retirement When the Old Rules No Longer Apply by George Schofield
BOOK – Rock Retirement: A Simple Guide to Help You Take Control and Be More Optimistic About the Future by Roger Whitney
Social Security Benefits: SSA.gov
