Preparing for retirement
Life has its ups and downs
Hard times comes uninvited and unexpected. Everybody has a plan, but life does not like to follow our plan. We can plan something and then life throws us a punch.
"Everybody has a plan until they get punched in the face." (Mike Tyson)
And some things are unplannable. In risk management, we have a term for "unknown unknown". And yet, despite our inability to know we still need to prepare. We can only plan to a point, because it is "unknown unknown" but that is why the more important it is for us to prepare for it.
It sucks when our plan does not go as well as hoped. But it happens.
We need to know how to respond if, or when, we "get punched in the face". Do we need plan A, plan B, plan C, etc?
Your answer and my answer may differ. How we plan (if we plan at all) differs from one person to another. Even more so is what we do with the plan, because our lives' circumstances are different. You do you. And I do me. Each of us is unique.
We cannot not plan
"If you fail to plan, you are planning to fail." (Benjamin Franklin)
The mental process of a proper planning does wonders. It helps us think through the scenario that we are planning for. And this helps us be ready when the said scenario, or something close to it, actually occurs.
And what about the scenario that we do not plan for?
For this reason, ideally we want to plan for more than one scenarios. We want to prepare for a range of likely scenarios.
We would pick scenarios that are likely and also not very likely (but not impossible). The goal is such that when reality happens, it will fall within the spectrum of our scenarios. Or the reality might be a combination of the scenarios. And we have prepared for each scenarios.
Ultimately, the preparations to handle the various scenarios will help us adapt for the real situation. Even when the reality is not the same as those scenarios
Onward and forward
There is never any guarantee that life will get easier. Many people look forward to retirement and they think life will be easier then.
It will be different for sure. Easier? We can only hope.
There might be periods where it will be. But life is unpredictable; nobody can guarantee retirement will always be easier.
My ideal retirement is to remain active to pursue interesting projects. My projects may fail. My plan may not turn out as well as I hope. And I will need to handle that.
This reminds me of a talk by Kara Lawson.
"We all wait in life for things to get easier. ... It’s not going to get easier. It’s going to get harder. So make yourself a person who handles hard well. Not someone that’s waiting for the easy. Because if you have a meaningful pursuit in life, it will never be easy." (Kara Lawson)
I want to pursue meaningful and fulfilling retirement. It may not be easy. But with data-driven planning, I hope I can "handle hard well".
Let us recap.
We discussed “ideal” retirement scenario.
We discussed retirement calculator.
And here we have just discussed the need to prepare few scenarios.
Have a great day.
Disclaimer: Anything I share is not intended as financial advice; I am merely sharing personal opinions and experiences. The information is of general nature and you should only use it as a place to start your own research and you certainly should do your own due diligence. You ought to seek professional financial advice before making any decisions.