Today we finish our series on the book Retirement Fail: The 9 Reasons People Flunk Post-Work Life and How to Ace Your Own.
I’ll share thoughts from the book as well as my take on what it says.
We’ve already covered the introduction and Reasons 1 and 2 and Reasons 3 through 5, so if you haven’t read those posts you may want to check them out before getting into this post.
Let’s get started…
Retirement Fail Reason 6: Being Scammed
I think we all know that there are people out there who want to make your money their money.
And no, I’m not talking (just) about financial planners. LOL.
I’m talking about scammers — which is the group the book now turns to.
The book also includes abusers in this section.
The author’s thoughts:
Financial exploitation is a category of abuse in which vulnerable older adults, or sometimes those with disabilities, are deprived of their assets, often by a person close to them such as a family member, caregiver, friend, neighbor, or trusted professional.
Financial mistreatment ranges from outright stealing of funds or property to coercing a person to sign a contact or other document that he normally would not sign. Instances of financial exploitation are sometimes complicated by other types of elder abuse, such as physical or emotional abuse or neglect.
While the incidence of fraud is rising across all generations (and, according to one recent report, may be particularly high for Millennials), exploitation of older Americans is reaching epidemic proportions, described by MetLife as the “Crime of the 21st Century.”
Just how much money is being swindled from seniors is a huge question mark: A MetLife estimate gauged the number to be about $3 billion annually, but an estimate from financial services firm True Link puts the costs 12 times higher, at more than $36 billion.
To the extent possible, it’s wise to have a trusted person who you can count on to help oversee your finances.
If it’s not a child or other relative it could be a close friend, pastor, or someone else you have created a close bond with.
Granted, it’s hard to determine who is completely trustworthy until that trust is put to the test.
As for scammers, we all need to be diligent, less trusting of suspicious (or even unexpected) emails, texts, etc., and always educating ourselves about potential scams out there.
Retirement Fail Reason 7: Health Issues
You’ve heard it before: health is wealth.
And if your health is bad, you could have issues (including financial) whether you are 30 or 90.
Here’s the author’s take on health issues and how they could impact retirement:
When I talk about health matters as a retirement disruptor, I’m not talking primarily about bankrupting yourself as a result of a medical condition. That can happen, certainly, and it’s critical to protect yourself by carrying adequate medical coverage and adjusting financial plans in the event of a serious diagnosis, but I’m referring in part to the lost potential to enjoy the retirement you desire – for you and, possibly, for your spouse.
Unfortunately, life sometimes throws us curve balls and we have to do our best to adjust. Sometimes couples plan to travel extensively in retirement or to live at a golf resort and enjoy their time together. But a person whose activity level becomes severely curtailed by health problems will need to alter his or her expectations for what life will be like.
And when one spouse faces a health crisis and ends up in a nursing home or passes away prematurely, the other can feel bereft, their vision for years of happy retirement with their spouse forever changed. Over the years I have seen how the “healthy” spouse, the one without Alzheimer’s or stroke, who is often providing full – or part-time care for their spouse, is impacted emotionally and physically. When health issues arise, it is challenging for the entire family.
Sometimes life simply throws you a curve ball and the best of plans are disrupted.
A couple thoughts:
- This is why I say, “Life is short. Retire early.” Why wait until you’re 65 or some other arbitrary age to start doing the things you want to do? Why not do them now, while you are able, and get them on the done list before it’s too late?
- This same sentiment is why I recommend people read Die with Zero. Or at least read my series on the book, which begins here.
The author then suggests at least thinking through some potential health situations:
What if a health crisis disrupts your retirement plans? Are you prepared for the effects that a sudden heart attack, a cancer diagnosis, a stroke, or the onset of dementia may have on you and your family?
Perhaps we can never truly be prepared for any of these things, but it is worth giving them some thought and putting in place the contingency plans we can, without tipping over into obsessing about a future we can to stay as healthy as possible. While we can’t control all disease and decline, there’s a lot we can do to maintain and enhance our health as we age.
Personally, I don’t spend any time considering the worst-case scenarios.
But I do work on something the author recommends above: “there’s a lot we can do to maintain and enhance our health as we age.”
More on this in a minute.
First, here are some of the things the book suggests doing to encourage healthy aging:
- Eat well
- Stay active
- Exercise your brain — Decline in some areas of thinking (mild changes in memory and a slowing of the rate at which new information is processed) is a normal part of again, but research has shown that a lifestyle that includes mental stimulation slows cognitive decline. Any activity that keeps our brain busy is good for it, so read books, write, learn a new language, take a class, do a crossword puzzles, or embark on some other new intellectual adventure.
- Practice good sleep hygiene
- Nurture your relationships
- Break poor health habits
I am working on all of these in some form or fashion as follows:
- I limit sugar and carbs and strive to maintain a healthy weight.
- I exercise six times a week (three cardio and three weights), walk 20k steps a day, and play pickleball 3-4 times a week.
- I keep my brain active by writing (ESI Money and MMM), reading, doing Sudoku puzzles, and learning new things (generally related to MMM and some courses I’m developing).
- I get plenty of sleep. I’m off to bed by 10 pm each night and up by 6 am.
- I have good family relationships, especially with my wife who I spend the most time with of anyone.
- My poor health habits generally revolve around eating junk food, and I’ve got those mostly under control. I don’t smoke, drink, or take drugs.
Bad Events and Under Living Your Wealth
The last two reasons for failing at retirement are as follows:
- Retirement Fail Reason 8: Being Hit by Bad Events
- Retirement Fail Reason 9: Under Living Your Wealth
To be honest, there’s not a lot new or worth sharing in these chapters IMO, but I do want to mention these last two reasons and give my thoughts on them.
So let’s get to it:
- The author lists the following as potential “bad events” (my words) that can cause retirement failure: stock market crash, lay off, and disability. FYI, if you’re retired, you don’t need to worry about a layoff, of course. Here he’s talking about a layoff that disrupts your income prior to you retiring.
- I’ve said it a million times, but this is yet another reason to have several margins of safety. Bad things can and do happen, so having backup plans is not only a good idea, but required.
- As for “underliving your wealth” (author’s words), the issue is that many people find it difficult to move from being a saver to a spender. Thus they spend way less than they can afford to. That is not a terrible problem in and of itself…it’s really only a problem if you think you’re losing out on something because you can’t force yourself to spend more.
- This is a HUGE issue for many wealthy people and one we discuss often in the Millionaire Money Mentors forums. It’s what spawned the ISE philosophy originated by millionaire #18.
- Once again, this is an issue discussed in detail in Die with Zero (in fact the whole book is about getting people to spend their assets versus underspending in retirement).
- I am working on this issue personally, but not having much success. The reason is that I’m pretty content with what I have and what I do. I don’t see how spending more will make me happier.
- That said, I have done a few very small things to spend more: 1) I now eat breakfast at my gym 2-4 times a week. I get a breakfast sandwich and coffee while I cool down and relax before the day begins. 2) We kept the house at 70 degrees this winter and we are at 73 this summer. No more sweating it out in the summer or wearing five layers inside in the winter to save a bit here and there. 3) I play pickleball mostly on private, indoor courts these days — even in the summer. 4) We had a tree die in our front yard and just replaced it for $1,000 with a pretty good-sized maple (love the tree and love that we saved several growing years by buying it bigger (3.75 inches in diameter)). 😉
- On the list: we hope to begin wintering in a warmer state. We’re still in the planning stages and trying to incorporate my dad into our plans, so we’ll see where it goes.
Ok, so help me out. What else can I spend money on to make myself happier?
Conclusion
The last chapter is titled “Finding the Right Financial Advisor.” Hahahaha.
And it’s about what the title states — helping you find the right advisor to help you with your money plans.
I think you know what I think of this suggestion, but let me be clear: the best financial advisor you can have is yourself.
Learn about money YOURSELF and then make the decisions yourself on what works and what doesn’t.
If you need feedback to consider along the way, join something like the Millionaire Money Mentors, a group of successful and experienced friends who can offer suggestions for you to consider as you make your financial plans.
But ultimately, the final decisions reside with you — as they should be IMO.
Well, that wraps up our coverage of this book. What did you think of it? Has anyone read the book and have insights different than what I offered?
K D says
I think spending money on more charitable giving is something to consider. I know you are and have been generous for a long time but why not increase your giving? Why does the increased spending have to be directly on you?
Bernd Doss says
Thanks for the analysis of this body of work. I saw myself in several instances, and mostly agree with your “thoughts.” One point I believe effects most retirees is the adjustment to retirement life after years of work. It took me several years of deciding which leisure path to take, coupled with the many opportunities that lay before me. Maintaining good health was the first choice that opened more doors of enjoyment and happiness.
Julia says
As to the “how to spend more”…if you’re exercising that much, I would recommend regular massage. A good massage therapist is not just a “fluff and buff” like you’d find at a spa. They can help to prevent injury or reduce inflammation around areas of old injury.
ESI says
My daughter and son-in-law have started getting these at our gym…I may need to check into it.
Ol1970 says
In the spending more money department I’d put on your list (after Covid restrictions are over), taking an extended cruise through French Polynesia. I know you’ve mentioned you enjoy cruises and Hawaii, but we’ve done both and French Polynesia makes Hawaii seem like taking a vacation at the I80 Truckstop by comparison. Better yet go with another couple you have fun with and charter a catamaran with a captain so you can explore on your own. It will be the best $ travel dollars you’ve spent!
ESI says
First, thanks for the recommendation. I’ve seen FP offered on cruises and wondered if it was worth it. Sounds like it really is!
Second, I had to laugh because my kids (when they were young) LOVED the I80 Truckstop. They thought it was second only to Disney. LOL.
Ol1970 says
Lol it actually is pretty cool spot, I love the truck museum, and my wife always seems to find some knickknack that we/she “must” have there.
MI 55 says
Thank you for doing these book reviews. I like the format and how you share your honest and forthright thoughts by adding personal anecdotes.
Luckily, to this point we’ve avoided any of those pitfalls. The thing my wife and I enjoy most is spending time with each other in retirement. For too many years we were limited by raising kids and dealing with difficult, time consuming, jobs to truly enjoy each other’s company.
We’re making up for that now although we still find time for ourselves and with different sets of friends.
The key lesson and takeaway from the last two books and your insights for us is: Retire as soon as you can but with a good, researched and thoughtful plan. And don’t be afraid to spend some of your hard-earned money 🙂
Fred Wallace says
I read “Die With Zero” a couple of months ago. I thought it had some very good advice and agree with most of what has been written about the book on this blog. My wife and I have a substantial net worth (I have a previous millionaire profile on this blog) and we underspend. We have found a few indulgences we really enjoy and flying business class on international travel is at the top of the list! We love taking one or two trips a year internationally (pre Covid) and believe the benefits of flying business class are so many, it is worth it! Reading this book affirmed my decision. “Die With Zero” has also freed me in a general sense to spend more on restaurant dinners, upgrading rental cars, and staying at nicer hotels and Air BnBs. I found the book very helpful with my spending philosophy.
Jane58 says
Thanks for the review lots to take away. For us now it’s a health issue my husband of 61 just got diagnosed with cancer. Our retirement dreams now being challenged. Wasn’t a cancer you could have prevented with life style changes, just bad luck. Spend $ is a challenge so now I am definitely spending more on food, just trying to keep him eating is a full time job. He’ll get thru this and we will get back on course. Again Thank you. I enjoy reading these updates.
ESI says
So sorry to hear this.
Please tell him I’m sending good thoughts and prayer his way.
RE@54 says
“I am working on this issue personally, but not having much success. The reason is that I’m pretty content with what I have and what I do. I don’t see how spending more will make me happier.”
This is the key and so like us. We are content with what we have and do. We are not pinching pennies and we still can’t spend all our money. We just don’t need to spend to be happy. That said, we no longer worry about sales and discounts for products we want. We just get it. Granted, I am not talking thousands of dollars items. Ha ha.
Hoosier at Heart says
I like the ISE approach as described on MMM and find it to be a nice heuristic to guide my thinking.
In terms of specifics, I find the budgets in the millionaire interviews useful. I’ve tried to break these down into age (e.g., 45 to 54, 55 to 64, 65+) and location (e.g., nine nations of north America, 11 nations of the US, Asia, Europe, US, Other) demographic segments to spur thinking about how our spending compares with similar others. Often, this leads to questions about personal enjoyment as well as purpose, legacy, etc.
Hoosier at Heart
MI 175 says
On the issue of hiring a (good and cost effective) financial advisor, my wife and I did our own “advising” for many years. We are very analytical and understand issues such as diversification and risk quite well. Yet we made terrible mistakes! Why? Because we could not get beyond our (overly risk -averse) emotions. So we sold in downturns and waited too long to buy in upturns. I’m sure we lost millions cumulatively simply compared to doing nothing (and a lot more if we had been even reasonably active). Not proud of all this, and we are still very well off, but something had to change.
So about 3 years ago we went with an investment advisor (happens to be Schwab Private Client, but no doubt there are other good ones). The whole purpose was to take the emotions out and just maintain a moderate risk portfolio. The advice has been fine, and we do not allow them to trade without consultation, but the main benefit for us has been to outsource the thought process.
Kudos to those who can be more disciplined and less emotional about money. For us, using an investment advisor has been well worth the 0.8% fee.
K D says
An area that I started super-sizing during the pandemic is tipping. I have continued even though life is mostly back to normal. I tip big for everything including take-out meals, hair cuts, massages, ice cream delivery, etc. We have ordered pints of ice cream from a local company several times because it is excellent and provides local employment giving an opportunity to many. It is not cheap but I feel good supporting the business.
ESI says
I’ve done that as well.
My standard tip is $20 and given the places I eat, that’s usually pretty big.
Last week I took my son to ihop (his favorite) and tipped $20 on a $28 bill. 🙂
Kristy says
If you enjoy boating….you can certainly spend there. My cousin’s husband has ordered a BIG boat, will deliver in January. They had a NICE BIG RV, & typically spend a month out west in early summer; but with covid last yeàr càmpgrounds were too crowded I guess.,..so are selling RV. Live in Midwest, boat will be used in Florida during winter & they plan to bring it to local lake (2 hour drive) for summer & fall. Maybe it’s just time to try something different… I hope you find a warm winter spot. I have that idea as well down the road. I will probably rent rather than own. That gives me more options as to changing locales.