The 3 Paychecks of a Modern Retirement

On November 29th, the oldest living person in the world, Emma Morano will turn 117. Based on my research she is the last living person to have been born in the 1800s. While some people might marvel at all she’s seen and been through, I ‘m curious about what she did during her more than 50 years in retirement.

With life expectancies continuing to grow, from about 69 in 1970 to almost 79 in 2012 here in the U.S., this examples illustrates my point: I think the traditional picture of retirement will look very different in the coming years. Palm trees and Pina Coladas are fun for a little while, but 50 years of it would surely drive many of you insane.

With our dividend strategy we aim to keep checks coming for clients, because we believe in a steady growing income. But there are two other “paychecks” I encourage clients to pursue as well.

  • Emotional Paycheck – these are the emotional deposits we all receive by being part of something bigger than ourselves, by participating and contributing
  • Intellectual Paycheck – these are the intellectual deposits we receive by figuring out something, creating solutions to problems. It is the satisfaction of discovery

While traditional retirement commercials would have you believing retirement is all about self-indulgent endless vacations, I think a modern retirement involves a balance between personal time, working for intellectual stimulation, and engagement in social activities to stay emotionally invested in those around us. Discovering and striking a comfortable balance will be the most important endeavor for new retirees.

But as many as 62% of Americans will not be able to freely make that choice. Instead they will have to work “as long as possible” because they “need the money” according to a recent Denver Post article citing a study done by

  • 38% say they are planning to work because they want to
  • 35% say they plan to work because they need the money
  • 27% said they plan to work because they need the money and want to work

And according to the survey, 47 percent of retirees are either very worried or somewhat worried about outliving their retirement savings. That’s up from 37 percent the last time that question was asked, in 2009.

I value freedom: financial, emotional, and intellectual. We specialize in creating financial freedom, but I encourage clients to prepare for “retirement” in more ways than one.

  • Stay healthy – pay attention to your health, both physical and mental. Stay fit with exercise, brain games, reading, stimulating your brain and being in relationship with others.
  • Stay strong in your skills – keep up with changes and innovations. Learn new skills with technology and especially the technology that is being embraced in your industry. Keep strong in your career.

Remember that each of these areas contribute to a healthy and meaningful retirement. Staying healthy, wealthy, and sharp will give you freedom. The freedom to go to work if you desire, or to start a business, or volunteer with a non-profit. Remain engaged, remain active, and who knows, maybe you’ll be celebrating your 117th birthday.

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Blind Spots: The Mental Mistakes Investors Make and Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post. He was recently named a Barron's Top Financial Advisor and recognized as a Forbes Top Wealth Advisor in Colorado.

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