[My Thoughts] To be secure, you need to be prepared.
This column is the third in a series of lessons learned and insights about how to balance the need for security with the ability to live exuberant lives with confidence and freedom.
Benjamin Franklin said, “Those who surrender freedom for security will not have, nor do they deserve, either one.”
Rodney Brooks, Washington Post columnist, compiled a financial preparation list from financial advisers and retirement experts he consulted:
Do a budget. It’s important to know where money is coming from and where it’s going.
Make extra payments on your mortgage and car. If you are 55 and worried about losing your job at 60, make additional mortgage payments. Try to pay your house off in seven years so when you are without work, that biggest budget item is no longer a worry.
The more debt you can shed, the better off you will be. If you currently have two incomes in your family, ask yourself where you would be if you suddenly had only one.
Boost your emergency savings. Pay yourself first and try to build up six months of cash reserve. If you can contribute to a Roth IRA do so. Principal dollars can be pulled out at any time after you reach 59, so it is a good emergency pool.
Have a plan. One counselor had clients with a long-term plan to move to Arizona upon retirement. Then the husband suddenly lost his job. They re-evaluated what Social Security would be, what their pension would provide, what they could sell their home for, and what their dream house in Arizona would cost. It turned out they could go right now. Because they had been planning for years, the sudden loss of his job did not derail their dreams.
Consider disability insurance. It is important to protect your ability to earn a living. While Brooks’ consultants encourage you to consider buying long-term care insurance for your parents if they can’t afford it, the price of that coverage has gone so high that few companies even offer it anymore.
Keep your skills current and your resume up to date. Stay active in your professional networks. You may also lower your expectations for salary and benefits if you do land another job. People over 50 separated from their jobs often find it nearly impossible to find similar jobs and salaries.
A friend who is 62 recently lost her job. The outplacement counselor her company provided told her not to waste her time at her age looking for a job online or filling out applications.
“You will get a new job through connections you’ve made during your career,” he told her. He was right and she had new work within the week.
Nurture your connections. They can provide you security in a constantly shifting landscape. If you don’t cultivate them, you may die an early, lonely death.
It’s easier now than ever to cultivate connections and relationships. We have email, Facebook, Twitter, LinkedIn, video conferencing. Goodness, people carry a phone in their pockets that makes them accessible around the clock to anyone in the world.
Friends are safe harbors when storms blow. Even the friends of the biblical character Job sat by him during his worst troubles. Sure, they urged him to curse God and die, but at least they were there! Remember, if you’ve climbed over them on the way up, you’re going to drop by them on your way down.
Healthy lifestyles researcher Dan Buettner delivered a 2009 TED Talk on his findings among people in certain areas of the world who tend to live inordinately long, healthy lives. He said, “The two most dangerous years of your life are the year you’re born and the year you retire.”
The first one, you can understand. But, the year you retire?
Buettner found several areas in the world – what he called Blue Zones – with the longest disability-free life expectancy. One was Okinawa where people commonly live past 100 and are physically capable, fully alert and involved in the world around them. They garden, play with their great, great grandchildren and when they die it is generally quickly and in their sleep.
According to Craig Weller, writing about this in his blog for Barefoot Fitness, Okinawans don’t have a word for retirement. Instead, they use the term Ikigai which roughly translated means “passion” or “reason for living.”
The Ikigai for a 102-year-old karate master was to teach his martial art. For a 100-year-old fisherman, it was to continue bringing fish back from the sea to his family three days per week. A 102-year-old woman’s Ikigai was to spend time with her great, great, great granddaughter.
In addition to diet and staying active, their passion kept them alive. They had something to rise and shine for every day. And it wasn’t necessarily what they would call their “work.”
Safety and security? Find it in living prudently, eating well and following your passion.