E63: How to Conquer Devastating Retirement Expectations

We discuss the unrealistic retirement expectations people have, and how you can find fulfillment in your work instead of merely working for a paycheck.

Today we’re talking about a topic that either you like talking about or you avoid talking about, depending on your personality. That topic is retirement. It can be exciting, it can be scary, it can be nerve-racking, but it just depends on how well you’ve prepared and your relationship with money and work, to begin with.

We’ll uncover some of the things we found that make retirement expectations dangerous.

Topics on Retirement Expectations Covered:

  • Thinking differently about retirement
  • Determining the right age to plan for
  • Counting the days vs. loving what you do
  • Rabbi Lappin and Nelson Nash on retirement
  • Finding meaning and value in service and passion
  • The two options for dealing with a job you hate
  • The false dreams financial services sell us and why
  • Who arbitrary ages set limitations

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Podcast transcript for episode 63: Conquer Devastating Retirement Expectations

Nate: In this episode, we discuss the unrealistic expectations people have about their retirement, and how you can find fulfillment in your work instead of simply working for a paycheck. She’s Holly and she helps people find financial freedom.

Holly: He’s Nate, he makes sense out of money. This is Dollars and Nonsense. If you follow the herd, you will be slaughtered.

Nate: All right. Today we’re talking about a topic that either you like talking about or you avoid talking about, depending on your personality. That is retirement. It can be exciting, it can be scary, it can be nerveracking, it just kind of depends on how well you’ve prepared and really your relationship with money and work to begin with.

We wanted to uncover some things we found that are dangerous to be expecting in retirement, and also ways that you might want to think differently about retirement to begin with, and try to find more fulfillment in your work that you’re doing right now.

Holly: I think one of the biggest things is that many of us have this expectation of an age when we’re going to retire, and with that expectation, it doesn’t match up with what reality is, because if our reality is, “I’m going to be able to live this very comfortable, nice lifestyle when I retire, even though I’m living on a fixed income” and we don’t take into account those other factors such as how much should we be saving, and what does it mean to live on a fixed income?

I know we were going to do this before today, but yesterday I was on an airplane and I was listening to two guys talking and the one guy, they’re obviously friends, and he said he wants to retire when he’s 75. The other guy was like, “Why would you want to work for another 13 years?” He goes, “Oh, I really love what I do. It’s very fulfilling, I have young kids, I get to spend quality time still with them, but I love what I do. I can’t imagine retiring earlier than that, and I think that that’ll be really good for me.”

The other guy said he couldn’t wait to retire, likes he counting the days, the two years he has until he’s 65 and he can retire early, and do that. The other guy posed the question, he said, “How much do you have saved for retirement?” Which is often the question we get. “What do you have in retirement?” Or, “What do you put away in 401(k)?” The guy said, “Around $150,000.”

The first thing that popped into my head was they live in Southern California, it’s quite expensive out here, but I’m thinking a fixed income of $150,000 won’t last very long out here.

Nate: That’s always what’s kind of funny is people can’t wait to retire, but most people don’t really have an idea of what they actually need to begin with, what their money’s actually going to produce them. That can be a staunch reality.

Holly: Especially when half of American baby boomers only have saved less than half, have only saved a little bit more than $100,000 for retirement. Most retirement plans are under by about 20% of what people actually need, and I think the difference in these two guys, Nate, is kind of what we want to hit on, too, with the reality of retirement, is one loved his job. “I can work for another 13 years.” The other one is just counting the days. He’s like, “I hate my job, I can’t wait ’til I’m done.”

It goes back to even what Rabbi [Lappin 00:03:27] talks about, that fulfilment you have when you’re providing a service or a value to another person, and you’re helping somebody else, how fulfilling your job, versus unfulfilling.

Nate: You know, we’ve had Rabbi Lappin on this podcast before and he shared some thoughts on retirement that holly and I, that certainly are in alignment with, and we thank him for his wisdom in that. Nelson Nash, who is the creator of the internet banking concept which you hear us talk about on this podcast quite a bit, too, both of those individuals saw a need to change the way we think about retirement to begin with.

Rabbi Lappin, one of his 10 commandments for working with money, he calls it the 10 commandments for making money, and one of them is don’t retire, and don’t have a plan on retiring. It goes back to that concept of finding fulfilment in your work. Personally, I couldn’t imagine retiring. At least when I do imagine the idea if I was to stop working, man, I feel it would be so unfulfilling to me.

If you guys can’t tell, we’re pretty passionate about what we do here. If you’re in a job that you hate, you have one of two choices. You can either change jobs, which I would very much encourage you to do if the option number two that I’m about to say doesn’t have any bearing on you, but you can change jobs I would encourage you to do that if that’s the only way to find fulfilment. If you can’t find any passion or fulfilment in what you do right now, by changing your own mentality into being a servant heart at work, even if the people around you, even if what you’re doing [inaudible 00:04:58], if you come into serve the company or serve your clientele and you have this heart that you work on, a heart [inaudible 00:05:06] the lord to focus on serving, I think that will change your attitude on money and on work.

The other way to do it is to create a fulfilment in it where you actually enjoy it. Like, come into work and helping people can be exciting. Most people I tell this to, they say, “Well yeah, I don’t want to just do nothing, I want to do something that I want to do.” Essentially what that tells me, Holly, is that the people are only working at that job for a paycheck. They don’t actually want to be there. They have these other things that they want to do, whether it’s volunteer, whether it’s starting a business, or something. They want to get to the point where they don’t have to have the job, but that tells me that they’re ruining all the time that they had the job to begin with, because it’s all unfulfilled. It’s all, “I’m just here for the money and once I get enough, I’m out, and I’m going to do what I actually want to do, and it’s obviously not help you guys here.”

If we can work to just be at peace and enjoy what we do, become excited about it, then a lot of this retirement issues that are coming across the news may not even have to be there. You can be much wealthier if you got the idea of retirement out of your head, I’ll just be honest.

Holly: I think a question you can ask yourself with your job right now is are you in this job for survival? Is it because you want to be successful or is it because you feel significant in your work, in what you’re doing? I love what I do, just like what Nate does. I feel significant because I get to help people every day. Just hearing that hope that you get to provide people, like I love coming to work, now not every aspect

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of a job do you always love, but when you can find that significance or something to make your job

significant, I would have never gotten into the business if it wasn’t about helping people.

That’s one of the things we want to challenge you guys with honestly, is your job, are you in this job at survival mode? “I’ve just got to go to work, get it done, come home every day.” Is it, “I’m doing it ’cause I want to be very successful and money is what matters to me?” Or is it because you want to bring significance, something of significance in the work that you do that either impacts other people or changes life, because retirement means you’re not of any significance, unless like Nate said, you go out and start volunteering or doing something you’ve always wanted to do or are passionate about.

What do you do with all that time? I would be bored, I wouldn’t know what to do with myself. I honestly don’t know what I’d do.

Nate: I know. I don’t know, either, and for those of you listening, we’re not trying to mock retirement or your plans. We think it’s certainly, everyone’s goals should be to become wealthier and to build wealth. Whether that is to consume it at the end of your life, just surviving and living your life, and just eating it up. That’s okay, but if you would open your mind up to think differently about it, I think that would be very helpful.

One of the things that Rabbi Lappin talks about in that is we have this new fangled idea, finding your passion and working there. While that has some credibility, Rabbi Lappin painted it a little bit differently, which is in order to become passionate about the things that people are looking for, that people need, that people want, if you want to help a lot of people, becoming a doctor, maybe that’s not a passion to you, but if you’re really passionate about helping people, you can get paid really well if you’re saying, “My goal is actually just to serve people in some manner. Whatever they want, I’m going to become passionate about that.”

If you become passionate about helping people in a very weighty manner, a weighty manner, something that they’re very desperate to get, a lot of times the more people you help and the more important it is, the more income you’ll make and you become passionate about helping the most people in the way that makes the most difference, and money’s going to follow. You’re passionate about it, which means you’re not going to be looking to escape it.

Those golden years idea, I wanted to let everyone know that that’s just like a marketing ploy by the financial services industry. We paint these wonderful pictures of retirement and how beautiful it can be, and it’s the best time of your life and you have all this freedom. How many of you really know people who do that in retirement? How many people is that really a reality for?

It’s more of a commercial for trusting them with your money type of thing, but in reality, as Holly’s already mentioned, many of us do not have nearly the amount of money to have that type of lifestyle, nor do we understand how tragic it can be to be living on a fairly fixed income without much leeway and a medical emergency comes along in retirement. Your life can go from being this exciting new venture, which it probably will be for the first few years, to, “Is it really going to last?” And then it becomes a stressful event, as opposed to this freedom that most people are yearning for.

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Holly: When people ask you, “How much do I need for retirement?” That’s not the question that you guys should be asking yourself. Nate and I have talked about this in the past. There’s not a magic number or a golden goose egg, “If I save this much, I’m okay.” I mean, if you have a reality and you believe that reality is true, and then you see statistically that basically you’ve under-saved by 20%, you can’t make up for that 20% when you’ve retired.

So, I think one of the things Nate and I really want to share is in order to be able to have that fulfilling retirement per se, or those golden years, actually what you really should be thinking about is, “How do I create passive income now that will last me in the future?” You need passive income that is consistently coming in for you, even in those golden years, if you want to call it.

I guess for me it’s very hard for me to imagine retirement, because my dad says he’s going to work until the day he dies, and he’d be none happier than if he was talking to a client or signing an app or something when he passes away. I truly believe that, but my dad has also understood the importance of passive income, and creating that for your family and for you in those latter years.

Nate: Yeah, that’s the best way to do it, to focus your life not on building a big nest egg, as you’ve heard us talk about on this podcast before, but producing passive income that isn’t going to go away, that you’re not having to draw down your resources to retire. That’s the best way to do it, and I also don’t really think that they understand that retirement itself was an idea, mainly built up in socialist style regime, in Germany actually is where it began, in the early 1900s.

It was adopted here in the 1930s and ’40s to try to get the older people out of the employment pool, to make room for younger people, as if defeats the purpose of creativity and job create and entrepreneurship that you really should be focusing on. But all that to say when they made the retirement age as age 65 in the 1930s and ’40s, the life expectancy for the average male was only like 62 years old or something like that.

It was in the mid 60s. There wasn’t going to be a lot of people hitting age 65 at that point. Well, for whatever reason, here we are 70-80 years down the road, and for most people they still have retire at age 65 as this mentality, when life expectancies are now in the mid 80s. For those of you who are retiring at age 65, there’s a solid chance that either you or your spouse is going to be living into their mid 90s, for 30 years potentially.

That’s a lot of strain and a lot of time for things to happen that can very much affect your lifestyle. If you planned to live until age 85 and that’s how you built up and you know you can make it to there, and you live ’til 95, well congratulations on being healthy, living that long, but man, will the money survive that long? What happens to inflation?

If you would come back to understanding that your work is valued by people, it’s valued by God, it’s part of the way God made the world, to manage us to be fruitful, to labor, to work. You don’t see a lot of the successful people just straight hang up their that. You don’t see Warren Buffett, he still goes into the office. That guy certainly doesn’t need to.

Bill Gates spends a lot of time working as well, a lot of time in the philanthropy world now, and his foundation which is a mega company in and of itself. But all of these people, they love to help, they love what they do, they’re passionate about it. Become passionate about what you’re good at. If you’re working in a space right now and you’re pretty good at doing it. Don’t just say, “I want to leave this.” Continue to work and do it, so that way you don’t have to exhaust your resources and you can live fulfilled as long as you can, and produce that value that we’re talking about.

If you waited ’til age 75 as Holly said that individual was mentioning, to retire, that’s 10 years less than you’re going to have to draw down your resources, but 10 years more for your resources to grow and compound and increase. You can live very well if you had to retire, but I would just warn against setting an age. Say, “At this age, I want to leave.”

Holly: When you set an age, you’re limiting yourself on what you can and the potential you have. I mean, you can have the idea of age 75 or 80 or 65, but when you set an age, that’s the goal you’re working to, then your goal isn’t on helping people of, “How long can I help them and serve others?” It’s, “When do I get to stop doing this?”

Nate: And you start coasting. If you [inaudible 00:16:17], “I’m going to retire at age 65” and you’re 62 years old right now, are you really going to be pushing yourself? Are you really going to be growing? Are you going to be expanding your ability to help people? Are you going to be as fruitful as you could? Or, are you starting to coast a little bit? It can get very boring, unfruitful, unfulfilling, quite quickly for a lot of people.

You would just spent your whole years building up for this retirement point, sacrificing and saving, and doing all these sorts of things to get here, but when you’re there, we still don’t know how long you’re going to live, we don’t know how your investments are going to perform, we don’t know what the dollar is going to inflate at. There’s so many uncertainties.

The best way to protect yourself against those is to never stop producing value. Your best asset from now until the day you die is going to be your ability to help people, and how much value you can bring to the table. That is your only hedge against all the craziness in this world, and all the uncertainty, is that people want what you can do for them. No matter what happens to currency, no matter what happens to the market or anything, people will pay you to do what you do, because it’s valued. That is your greatest hedge against the uncertainty in this world.

Holly: Irregardless of the dollar amount you have in your mind, whether it’s saved or this or that, you have no idea what the future’s going to hold. Is 100,000 enough? We can’t gauge the inflation. You can’t gauge what’s going to happen 10, 20, 30 years from now. But what you can do is know that every day you went and you help somebody else, and you serve fellow man, and you were paid, the worker is worthy of the wage, right? You were worthy of that wage and how you’re helping people.I just think it’s so important to understand that it’s not about a dollar amount. It really is about passive income and whether you’re fulfilled in what you’re doing here and now today. Because the more fulfilled you are, the more people you get to help. I find that in my busy, busy time, when I’m doing a lot of stuff, I feel so much more fulfilled because I get to talk to that many different people.

I enjoy vacation, don’t get me wrong, but when I’m on vacation, I can’t wait to get back to the office at times and see, “Oh, who do I get to help now?” Even just having that mentality I guess, not an age, because like Nate said, you’re going to coast. You’re going to just get by.

I don’t think anybody wants to be just getting by in life. I think that when you’re just getting by, you lead a very lonely, unsatisfied life.

Nate: I would agree. We’ve maybe poo-pooed a little bit here on retirement. It’s not like we’re totally against it and that can’t be your vision, but a lot of people expect retirement to look like something that it may not be. If you stop working and you leave your job, there’s going to be new concerns and new worries to you that you honestly, you wouldn’t have if you were still working, if you were still producing income.

Most people do not have enough. I’m going to be honest with you. If you’re listening to this, you probably don’t realize how much you really need to fully enjoy it, but if you wanted to have joy, and fulfilment, not just in the future, but now, I would tell you, become passionate about what you’re doing. When you come into the office each day, know that you’re making a difference and try, work hard. All of those things will help you be fulfilled at the end of the day, and enjoy your work.

If it’s something that that cannot happen, it does not align with your personality whatsoever, what you’re doing, then I would just suggest to leave and find something else. Life is too short. You get one shot at this life, and to waste it, waste 40 years of your life working, doing things that you cannot find a passion about, just so you can finally get to the point where you can leave that, you’re going to regret doing that.

It may be scary, but have faith, trust, and have confidence in yourself, that you can make a difference and do something that you can be passionate about. If there’s just no way that your mentality and your attitude about what you’re doing now.

Holly: This has been Dollars and Nonsense. If you follow the herd, you will be slaughtered. For free resources and transcripts, please visit LivingWealth.com/e63.