If you do not want to be overwhelmed by the cost of late retirement planning, you must start planning today. In last week’s edition (Part 1), we introduced and explored retirement surprises, stating that they are unwanted and risky surprises that can derail your retirement plans. They include the things you wish you knew before retirement, what can surprise you in retirement and what you shouldn’t have wasted your time doing before retirement. The worse time to have these surprises is at a time when you lack the financial muscle to deal with them. Thus, the goal of this concluding section is to show you the remainder of these surprises and how you can avoid them or convert them to known and planned occurrences.
Surprise 3 – All unknown will become known
There is a popular cliché that is flung around a lot by working professionals in the career world. This cliché is “the fear of the Unknown.” Researchers define this fear as the tendency to be afraid of something you have no information about on any level. This means that any fear of the unknown can be resolved by getting the right information you need to eradicate the fear. And this also means that everyone starts from the position of the unknown each time they are trying to do a new thing. Thus, this fear can be eradicated through preparation. And rather than let this fear stop you, the wise thing to do is to unravel the fear.
It is alarming how many people are held back by the fear of the unknown. The fear of the unknown keeps people stuck in jobs they don’t like, limiting their income potential. This same fear prevents people from retiring early and pursuing self-actualization work. Also, this fear is responsible for the nightmares and anxiety that people have towards retirement. I am here to announce to you that this fear is not rocket science. The presence of this fear simply proves that there is the absence of the right information, the right guidance, the right knowledge, and the right preparation. No one fears what they are well prepared for. Fear crepes in only when you know you are ill-prepared for a thing. Thankfully, you can get the preparation and guidance that you need to prepare for retirement today.
Whether you choose to face your fears now or wait until retirement reveals them to you. You will confront your fears. The more unprepared you are when you confront them the more pain you will suffer in retirement.
Surprise 4 – You will face reality and not aspirations in retirement
One of the things I try to heal my clients from when they come to me for advice is to help them move from idealization and aspiration to reality. There seems to be an ever-increasing gap between what many people think will happen in retirement and what will actually happen. And when optimism is very far away from reality, the result is financial pain. While optimism is good. It will only serve you when it is backed with realistic action. Retirement planning is not rocket science. If you will have a great retirement life we will know from today. All we need is to do the math. And if the math does not add up, no magic will happen to give you a great retirement life.
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Below is the common kind of optimism I hear clients express all the time:
- I should be able to own my home in another five years.
Question – How do you know that for sure?
- I want to retire in another two years.
Question – Would you be financially ready to make the move in two years?
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- I believe my investments should be enough for me when I retire.
Question – How can you tell this would happen for sure?
- I should be free from carrying children’s responsibilities in retirement.
Question – Do you have a plan to make this happen or are you just hoping and wishing?
The truth is most people are basing their retirement plans on I think, I hope, Maybe, Probably, I pray so, etc. Retirement planning is not a vague concept. It is mathematics and if it will work for you we would see it from today.
Thus, if you cannot say for sure what would happen in retirement, chances are high that it will not happen. Retirement will greet you with the reality of what you have and what you are doing today. And not what you hope, wish, or pray may happen.
Surprise 5 – Your value and significance will retire with your job
One of the most tragic things about being a working professional for a long time is that your essence and significance becomes tied to a job. You are valued because of your big titles, the big organization you work for, your big paycheck and ability to send money home. Your big cars, expensive suits and houses, at retirement, all these will be lost. And if all your value and identity is tied to your job, a midlife crisis will ensue. Relevance and significance are about the ability to solve problems. Unfortunately, the majority of people only know how to solve problems using money. Thus, when salary ends at retirement the currency they need to be valuable to people is taken away. If there is no plan in place to acquire the other kind of currencies that never retire, a loss of identity and significance is the possible result.
Tying down your essence and relevance to a vanishing job is a big mistake. To thrive in retirement and remain relevant you must create a diverse ability to solve problems and expand your trading currency beyond just money. No amount of money is enough to solve all problems, thus you must master the art of solving problems without money. We would talk about the different currencies you can use later.
Surprise 5 – You may end up on life’s bench
I am not a football fan but I learn lessons from the football organizations and how their teams function. Especially how the star players are treated. Let’s take Lionel Messi for example. Messi is the star player in the Barcelona team. As the star player, Messi gets the highest attention, priority, and treatment. His needs and welfare are prioritized above everyone else. And they are prioritized above those on the bench. It is not very hard to see referees give Messi certain preferential treatment as the star player of the team. Messi enjoys these benefits because the success of the team and most importantly, the goals, ultimately depend on his performance.
As the breadwinner of your family, you are your own Messi. Your family depends on you to score the financial goals. And your financial performance is ultimately responsible for the success of your family. Alas, you treat yourself not as a star player, but as a player on the bench. You neglect your own financial security. Prioritize the needs and welfare of those on the bench (those not scoring any financial goals). You submit yourself to be slaughtered on the table of sacrifice and selflessness thinking this is what you should do.
A great family Messi prioritizes their own financial performance, not because they are selfish. But because they know that the lives and welfare of others depend on them. If you are going to have a restful retirement you must treat yourself as the Messi of your family. If you fall in retirement everybody falls with you. The lives and welfare of the people that depend on you is jeopardized and the selflessness you once thought you were doing would amount to nothing. The more you neglect your own welfare, and postpone retirement planning, the sooner you will end up on life’s bench and also bench all the people whose lives depend on you.
The key to successful retirement planning is to prioritize your own financial welfare so you can keep scoring financial goals and helping your loved ones in retirement. No one likes a Messi on the bench.
Surprise 6 – You may join the dependants department in your family
One of the direct consequences of neglecting your own retirement planning is that you will join the dependants in your family. Currently, these dependants stress you out. Imagine what it would be like joining them and becoming part of the stress in retirement. Right now, it looks as though it is impossible but that is exactly what will happen if you fail to plan.
In every family, there are two kinds of people. The dependants and the Providers. Both groups contribute to the longevity of poverty in the family through their emotional actions and habits. The dependant group contributes to poverty by giving birth to children much more than they can handle. They also contribute to poverty by milking emotionally vulnerable Providers. The Providers, on the other hand, contribute to poverty by neglecting their own retirement plans. And funding dependants in such a way that they fall after their active career life. In the end, providers become dependants themselves and their class of dependant is the costliest to the family. Research shows that 80% of working professionals will become dependant in retirement, whether this dependence is partial or full. Thus, the only difference between many working professionals and the dependants in their families today is time. In due time, they will join the league. Worse off, is that ex-working professionals are the most expensive dependants to maintain.
They are expensive because they have become accustomed to a certain standard of life that makes them a giant cost centre. It is costly to pay for their medical bills. Their monthly upkeep expense is bigger. They also require more elaborate burial and funeral plans. All of which drags the future generation into deeper poverty holes. It is common to see children pooling resources together just to fund one fallen ex-working professional. Without retirement planning, you put your family at great risk of poverty.
If you hate the stress and burden of caring for dependants today. People will hate and be stressed by carrying your burden tomorrow. Dependents are a giant financial pain to anyone and you must strive to never be one of them in retirement. Thus, the sooner you prioritize your retirement plan, the earlier you save yourself and your children from suffering and embarrassment.
Surprise 7 – You may lose the admiration and respect of the younger generation
The best way to get the younger generation to admire, respect, and listen to you is for you to be an example they want to be like. If your end does not reflect the kind of life they want to live, they will go find the people that have the results that they seek.
The end of a journey is more important than the beginning or the middle. No one wants to listen to only good old stories without current and good new stories that spark admiration. Thus, true family heroes ensure that they remain heroes and their lives remain inspirational until death. So, if you spend your whole life focusing on your career years and neglecting retirement. You will struggle to have a say in the lives of the younger generation in retirement. Present and current glory is more important than past glory. The younger generation is looking for results, and not excuses why results cannot be achieved. They need wisdom, knowledge, and guidance from people whose live show current successes, not past victories. Ending up in retirement with a less admirable life will severe your relationships with the younger generation. They will only see you as a reminder of the kind of life they never want to live. And this is bad because you need the younger generation to extend and preserve your success beyond your own life. And without their cooperation and admiration, all your hard work leaves with you.
If you need help planning for Retirement or navigating any of the surprises stated in this article, send an email to email@example.com.
The next retirement surprises we will discuss are the Income Surprises. Stay glued for another part.
About the author
Grace Agada is the most sought-after Financial Planning expert in the country and is quoted frequently in leading Newspapers, magazines, and blogs. Grace is a Renowned Keynote Speaker, Author, and Column Contributor in Punch Newspaper, This Day Newspaper, Vanguard newspaper, Business Day Newspaper, Leadership Newspaper, The Tribune Newspaper, and Online Platforms like Nairametrics, Proshare, and Bellanaija. Grace is the Founder of “The University of Wealth” The author of “The Financial Freedom MBA Program”, “The Better Life in Retirement Planning Blueprint” and “The Wealthy Business Blueprint”. Grace is on a mission to shrink the middle class and populate the upper class. She has been featured on BBC Africa. Business Day TV. Inspiration FM. and inside Naijatv. And she consults for Numerous Top Organizations, Company Directors, CEOs, Senior Executives, and High-Income Professionals.