It’s a wakeup call.
These days unpredictability is the theme of the marketplace, and hordes of would-be retirees have lost solid gains in their portfolios and home values. Seemingly, there is no place to turn for financial solace, with dread and anxiety running rampant.
But perhaps there is value in being disillusioned. Just as the people in the Gulf will be forced to reconstruct their lives or those who have lost assets in other natural disasters will need to rebuild their homes, perhaps your retirement dreams are calling for a major makeover.
The remodeling of your retirement dream
While we may balk at the dents our retirement ambitions have undergone over the last couple of years, it hasn’t been all bad. The common sense approach to lifestyle choices that Billy and I have been embracing for the last twenty years have now become fashionable. Keeping the conversation real about leaving the workplace has forced us all to recognize that our future retirement lifestyle dreams must have teeth.
What’s so awful about that?
Having a reality check and putting our priorities in order about what we want in life is a good thing. We don’t normally do that when our lives are comfortable. Why take time to reflect about what we value when we are living large and spending like there’s no tomorrow?
And now tomorrow has arrived.
We discover what we are truly made of when forced to make hard choices or tradeoffs about our future. Again, we see this as something in the positive column. Knowing who you are and what matters most to you makes you strong. Looking back at what ifs will only dissipate your focus. Moving forward is far more advantageous.
Finding out where you are – practical steps
Perhaps the equity in your home tanked, you had a distressing realization about the amount of debt you were carrying or you made some less-than-stellar investment decisions lately in this fluctuating stock market. Alternatively, maybe everything has gone right for you, but instead, it’s the fear and insecurity about the uncharted waters ahead that holds you to a job you truly dislike.
No doubt, all of this instability and unfamiliarity can seem to be overwhelming at times. What can you do to gain a sense of control?
1. Cut fear down to manageable bites
Fear corrodes your life. The best way to deal with anxiety is to take action.
If your current lifestyle is not sustainable and your retirement ambitions are whimsical, what can you do to gain traction? Get a grip on your spending, debt management and savings. Even if you have to start small, moving forward is better than treading water. There are long term, measurable benefits to choosing substance over style, and with that, your confidence will build.
Cutting your spending to pay down debt will also bring you assurance. Optimism is an essential ingredient in dealing with the future and positive thinking has more power if it’s based in a practical plan.
Make yours now.
2. Evaluate other options for health care
We receive letters from our readers enumerating concerns over their ability to access health care in retirement. For these people, it is their number one priority, and their entire future hinges on this one expense. As health insurance premiums rise, no amount of savings seems to relieve the emotional pressure they feel. They live in a state of constant threat, which is not good for their health!
Currently, the health care issue in our country is in a state of flux. The rules governing its administration seem to be changing daily, so no one knows exactly what the future will bring. But why wait for someone else to make the rules?
Your choices do not have to be limited, and you do not have to build your future around that one topic. There are alternatives to consider and having a backup plan can bring you peace of mind. It will also help you to get on with your life.
Through our world travels over the last two decades, Billy and I have personally taken part in medical tourism and with satisfying results. From our first-hand experience, we can recommend this option. There are agencies which will help you choose your doctor, find lodging for your companion, answer your questions about follow-up care and take you door-to-door and back again if you so wish. But what if you are not the traveling kind, and the idea of going far from home for medical help is off the table in your discussion?
This is such a perplexing puzzle that you can gain some solace in realizing that you are not alone. Joining financial forums such as The Motley Fool, Kiplingers Personal Finance, The Early Retirement Forum or Raddr’s Forum and researching health care topics will give you access to hundreds of people who are solving this problem for themselves. These discussions will give you practical answers and valuable insight. Another worthwhile source for solutions is the website of health care consultant, Michelle Katz.
While it may seem simplistic, putting the healthcare issue into perspective with other categories in your life will help you move into your future retirement with more ease
3. Think out of the box – consider relocating
While many of you may not have contemplated leaving your hometown for your retirement years, you may find yourself in a different frame of mind lately. There are dozens of countries and hundreds of cities in the world to live that won’t put a financial stress on your savings. One of our favorites is Chapala, Mexico, and we write about the town’s many advantages in more detail in our Adventurer’s Guide to Chapala Living. Depending on your lifestyle, there are locations in Mexico, Ecuador, Guatemala, Thailand, Honduras, the Philippines, Malaysia and others, where you can easily live on your Social Security check. We know people who are doing this now. They simply have their check deposited into their U.S. based bank account, and then use an ATM machine anywhere in the world to retrieve funds in the local currency.
Contrary to the news we get on TV in the U.S., there are many places in the world that are every bit as safe as living here in the States or Canada. Safety exists alongside danger everywhere.
On our Relocation Page you can find average and below average cost of living cities in the United States which may hold great appeal for you, or tax friendly states in which to live. We also list links to Expat newsletters and forums from around the world for you to obtain the information and assistance you need to help you relocate if you choose. Why not open up to this possibility and relieve some of the demand you feel on your pocketbook?
4. Don’t let peer pressure decide for you
Change often brings stress with it and many times we turn to loved ones for comfort and input. If one of the solutions to your retirement future means moving out of state or country, this can intimidate those whom we hold dear. Family and friends may try to keep you close by pointing out the struggles involved in your plan, and instead of helping, you could have more doubt than before.
Remember, this is your life. Clarify what’s important to you, set your priorities to your satisfaction, then allow this to be your north star.
We know of couples who moved to be close to children and grandchildren during their retirement years, only to have their children take out-of-state employment, bringing the grandchildren with them. Instead of moving again, they now keep in close contact by utilizing Skype, Magic Jack and webcams, along with visits whenever feasible.
5. Dealing with the general fear of the unknown
There are great emotional components to retirement. Studies we have read point out that it’s not always finances preventing people from leaving the world of work.
Fear can come on many levels. If you have been hard driving, productive, loyal to a savings plan, the ‘Go-to’ person at work, the actual act of retirement could leave you without a sense of direction or feel like a letdown. You could be scrambling for a self-definition that you can live with, anything that doesn’t make you appear to be soft or lacking ambition. Or your biggest fear might be that you could find yourself bored, without a schedule, and wondering what you will do all day.
No doubt it’s a leap to leave the unfamiliar and go to a world that has different parameters for success. Don’t forget that even though you retire, your life will be a series of continuous decisions. It doesn’t happen in one fell swoop. If you don’t like a particular avenue or outcome, change your mind. Life is fluid. You are not stuck, unless you think you are.
It is prudent to remember that there are no guarantees, but many ways and styles to live ‘life away from work.’ Yes, there are tradeoffs. Anything worthwhile will ask you for that. So we encourage you to keep your sense of possibilities and welcome these recent financial and mental collisions to your retirement dream. While everyone has to find their own comfort level for the future, you may find that you have stumbled upon something far more rewarding than if you had never been challenged in the first place.
About the authors: Billy and Akaisha Kaderli left their fast-track lives at the age of 38 and started traveling the world. After two decades of on-the-road-experience, they share how you, too, can enjoy exotic travel for less than you think. To learn more about world travel and how to become financially independent, visit their website, www.RetireEarlyLifestyle.com