Embrace Your Retirement Detours
Before we delve into the financial fun, let’s imagine retirement as a road trip. You’ve got your favorite tunes playing, endless horizons stretching out before you, and a bit of wanderlust in your heart. No rigid schedule to adhere to; just spontaneous detours, scenic routes, and unplanned pit stops that make the journey oh-so memorable.
Now, let’s apply this to your retirement plan. Your plan is like the GPS on your road trip. You don’t just set the destination once and ignore the updates; as new routes become available or traffic emerges, you update and refine your path.
Let’s shift gears and rethink our approach to retirement. It isn’t about flawlessly executing a one-time plan. Instead, retirement is a dynamic dance of “upward and downward spending adjustments”. Retirement is all about navigating the twists and turns life throws our way.
The “Ratcheting Rule”
I am really fond of a concept known as the “ratcheting rule. This rule suggests that retirees adjust their spending upwards when their portfolio performs well, thus allowing for more flexibility and enjoyment. For example, if your investments yield higher returns than expected in a given year, that could be the perfect time for a long-awaited dream vacation or finally starting that hobby you’ve always wanted.
On the flip side, during leaner times, a temporary reduction in spending my be warranted. Maybe you decide to hold off on renovating the kitchen or plan a staycation instead of an overseas trip. This, however, doesn’t mean drastically cutting down your lifestyle but making prudent, measured decisions that safeguard your financial future.
OUR TAKE: Embracing uncertainty can actually enrich your retirement journey. You might see an unexpected expense as a hiccup or, alternatively, you can view it as a chance to reevaluate and better align your plan with your most important values.
It’s these continual upward or downward adjustments, otherwise known as ‘guardrails,’ that guide your journey through retirement, allowing you to take advantage of good times and navigate through the challenging ones.
Flexibility is Better than (a false sense of) Perfection
You see, you might start with a meticulously planned route (or budget), but as the journey (or retirement) progresses, you’ll need to fine-tune your plan. A road trip might be detoured by a stunning waterfall, while retirement might be adjusted by an unexpected expense or a dream opportunity. And that’s okay.
It’s not about creating an ironclad, fixed financial plan; it’s about adapting and adjusting as you go along. Your retirement years shouldn’t be spent worrying about whether you’re straying from the plan. Instead, they should be about enjoying the ride and making changes as you go.
“What do you call a person who is happy on a Monday? Retired.”
Now, you might be thinking, “Adjustments? Sounds like a fancy word for uncertainty!” But here’s where the magic happens. Proper planning doesn’t just set you on a fixed route. It gives you the roadmap, GPS, and flexibility to make those all-important pit stops and detours without ever running out of gas.
So, we want you to leave this article with confidence in your back pocket, not worry. The key to a worry-free retirement isn’t a flawless plan, but a flexible one. It’s about recognizing that life happens, things change, and when they do, you have the tools and support to navigate those changes with grace and ease.
Retirement planning is not a one-and-done process. Like that road trip GPS, it’s something continually refined, improved, and adapted. We’re here to help with every twist and turn, every course correction, and every scenic route you choose to take.
And the best part? This type of dynamic planning ensures you’ll never run out of gas, even when you decide to take the long, scenic route. The adventure of retirement is yours to shape, and we’re here to help ensure it’s a journey to remember.
OUR TAKE: Research shows that, historically, just about any sound financial plan could have been saved through relatively minor adjustments, even in the worst of historical scenarios.
So, set your sights on the horizon, crank up your favorite tunes, and remember: it’s the journey that matters, not the destination. Enjoy the ride.
