Reimagining Retirement

reimagine-your-retirementThe book pictured I picked up at the recent Write Canada 2014 writer’s conference in Guelph, Ont., the third time in five years I attended that event.

Joyce Li is a project manager and motivational speaker, originally from Hong Kong, now living with her family in Brampton, Ont.  Reimagine Your Retirement is published by Word Alive Press, and is what you might expect from a publisher focused on spiritual writing. Li’s perspective on Retirement is not at all the traditional  “full stop retirement” we think of when we see the ads from the banks and fund companies.

Instead, she views Retirement as a sort of spiritual/vocational halfway house between one’s working years and eternity.  This is not dissimilar to my own view of Findependence or Semi Retirement. In fact, she credits Rick Warren’s The Purpose Driven Life for inspiring her almost a decade ago: she gave six family members copies of Warren’s book, with personalized inscriptions.

Are you haunted by “nagging dreams”?

Li spends time a good chunk of time talking about ”nagging dreams “ that have yet to come true. And who among us does not harbour dreams we’ve not yet been able to manifest in this harsh workaday world and its seeming financial constraints? Li doesn’t make light of the financial side of retirement but seeks a way to reconcile it. And she’s not shy about confessing her own youthful dreams of becoming either a movie star or a pop star.

Spiced liberally with biblical quotes, Li is all about planning: plan the work, work the plan.

In the opening chapters, she reminds us the concept of retirement was non existent in biblical times and throughout most of history.  And whether retirement is  voluntary, involuntary, or delayed, Li doesn’t shy away from the financial side of it. One reality is that “Retirement requires financial support for an unknown time.”

And did you know the bible  has at least 250 verses that discuss money? Interestingly, she says the Bible has “no direct reference to retirement or retirement planning,”  except for one passage in  Numbers 8:23-26.  (“at the age of 50, they must retire from their regular service and work no longer.”)

While she  acknowledges that some plan never to retire, some will partially do so, and some will fully retire to disengage from the workworld altogether, Li’s personal orientation seems strongly oriented to reinvention or reimagination, as the book’s title suggests. This may entail going back to school, or  embarking on a brand new vocation.

The book will find few readers among atheists and agnostics, but will be thought provoking for those who see a spiritual dimension to life, no matter what particular religious affiliation.

A book for writing in

I wouldn’t suggest obtaining a library or ebook version of this book, as Li provides plenty of blanks she encourages one to fill in, with multiple exercises to put self discovery and concrete planning into practice.  She’s all about discovering one’s skills, life gifts, spiritual gifts and passions, then encapsuating what you’re discovered into a personal mission statement that will chart your 20 to 30 years of a reimagined retirement.  She’s a strong believer in the power of visualization, which of course is exactly what I suggest in my own book: drawing a line in the sand and declaring it your Findependence Day, even if it turns out ultimately to be a moving target.

 

 

 

 

YOUR Declaration of Findependence

Fireworks show over Khao wang Historical Park, Phetchaburi,ThailandIn advance of America’s July 4th celebrations, I thought I’d devote this blog to helping retirement savers prepare their personal “Declaration of Findependence.”

The other day at Forbes.com senior writer Richard Eisenberg devoted a piece to this theme, and cited my own recent experience in finally living the life I describe in my book, Findependence Day. Findependence, of course, is merely a short-hand description of the phrase Financial Independence. Findependence Day is the day in the future when you believe that income from all sources — including investments, pensions, rental income, business income, royalties – will exceed income from the single source most of us call a “job.”

So, without further ado. It’s up to you to fill in the blanks to reflect your personal circumstances:

Declaration of Findependence for ________ (your name here)

1.)  Based on my current age of __, I believe I should aim for  the __ day of the __ month in the year 20__. This happens to be the year I turn __.

 

2.)  I understand that as this milestone approaches, the actual date may have to be revised. If financial markets are very strong, I may even be able to move it ahead by __ years. If markets are weak, I may be forced to move it back by __ years.

 

3.)  I am currently employed by ________________ and am enrolled in a pension plan. The earliest date I can take an unreduced pension is ______.  I can also take early retirement by _______, provided I am willing to receive a smaller payout.

 

4.)  As an American  with ___ years in the workforce, I am eligible to begin taking Social Security benefits as early as age 62, which is ___ years before/after my planned Findependence Day. The latest I can take them is age __, in which case the payout will be much higher. Based on my annual contribution statements, the optimal time for me to commence Social Security is age  __.

 

5.)  Depending on whether I was born before or after Feb. 1,  1962, I will be eligible to take Old Age Security (OAS) benefits at age 65/66/67. (Circle one). If OAS is my only source of income in old age, I will also be eligible for the Guaranteed Income Supplement. Ideally, so is my spouse, in which case the day we’re eligible to receive combined OAS/GIS benefits will be our joint Findependence Day.

 

6.)  As someone who enjoys work but not necessarily all the stresses of full-time corporate employment, I see myself being semi-retired or self-employed by age ___.  By adding  $_____ thousands of dollars of part-time income a year to all the above sources of income, my Semi-Retirement could begin as early as ____, which is the year I turn _____. I will call this my Preliminary Findependence Day.

 

7.)  Instead of having one long extended Retirement at the end of my life, I prefer the concept of multiple “Mini Retirements,” and therefore of multiple Findependence Days to fund them. I would like to set the year _____ as the year of my first Mini Retirement, and therefore _______ will be my first (but not necessarily last) Findependence Day.

 

 

 

 

Seek Findependence, not Retirement

wohlner66This week, I did a guest blog on Roger Wohlner’s blog, The Chicago Financial Planner, which you can find here.  As I note there, Roger [pictured on the left] is the kind of fee-only financial planner I recommend in Findependence Day. By the way, Roger is a must-follow on Twitter as @rwohlner

As you can note in the comments section which follow that post, people are becoming more aware of this paradigm shift and the distinction the book makes between traditional “Retirement” and Financial Independence (or “Findependence”).

As one commented, by viewing the goal as Findependence rather than full-stop retirement, he was able to move his “retirement” date up by 15 years.

Related to this concept is a blog I did here a few months ago about Early Findependence being a more achievable goal than Early Retirement. I note in this weekend’s Financial Post, a package of stories about extreme saving (I’d call that ‘guerrilla frugality”) by Melissa Leong, including a profile of a couple who supposedly “retired” at 35.

We’ve seen these stories before of course: Derek Foster and Dianne Nahirny both wrote books describing how they retired in their 30s. But of course, they were really describing Findependence since if nothing else they were still “working” by writing books how about how they stopped working!

 

 

 

“A welcome read both north and south of the 49th parallel.” — review in Richmond News

Certified financial planner Richard Vetter has reviewed Findependence Day in the (BC-based) Richmond News, judging it to be a “welcome read” both for citizens of Canada and the United States. The review, found here, points out that the common sense advice of two “very unorthodox financial planners” in the novel is often “contrary to what the financial industry is trying to sell them.”

Here’s an excerpt from the review:

The book is a great response to these challenging times and helps us to understand that there are few challenges that we cannot logically plan our way through …. The book necessarily spends a lot of time teaching some important financial lessons, but it ends up giving us a vision of what a life well-planned can look like.

Vetter is a CFP and Chartered Life Underwriter with WealthSmart Financial Group.

– 59 –

An interesting way to learn financial planning

Earlier this fall, I reviewed the book Boomers Into Business, by Lisa Orrell, on my Wealthy Boomer blog; then mentioned it in a subsequent column on boomer retirement.

I was pleasantly surprised this weekend to find an extensive review of Findependence Day on Lisa’s PromoteUGuru blog, which you can find here.

Readers of this blog may recognize the part at the end, which is the “Interview with myself” about the book.

It’s always gratifying to get some recognition in the United States. Even though the current (first) edition of Findependence Day is North American in scope (it takes place in both the U.S. and Canada and addresses the tax and retirement system in both countries), most media attention and sales have come from Canada.

I hope to rectify this with an all-U.S. e-book and tablet computer edition that I’m currently finalizing. It’s set primarily in Chicago and Boston and adds a couple of features not in the first or “North American” edition: a glossary and an end-of-chapter summary of what Jamie and Sheena learned. I’d initially resisted doing the latter on the grounds it breaks the “fictive dream.” But in the final analysis, the book is about raising financial literacy, so it makes sense to provide a handy end-of-chapter summary on the main lessons learned.

– 61 –

If you have a financial planner, get your plan!

If you’ve been monitoring my FP columns and Wealthy Boomer columns the last week (see scrolling lists to the right of this blog), you’ll see a recent focus on financial planning. My Saturday column in the Financial Post simply reported on the annual symposium held last Wednesday by the Financial Planning Standards Council.

Even so, readers and even certified financial planners (CFPs) themselves seem to be surprised by the revelation by the cream of the FPSC’s own membership that many clients of financial planners don’t automatically receive a comprehensive financial plan at the start of the relationship. My blog on Monday shows some of the reaction, including from one RFP or Registered Financial Planner (who regard themselves as an advanced form of CFP). See IAFP.ca.

Financial planning is key element of The Findependence Day Model

Let me make it clear, as anyone who has read the book and this web site devoted to it, that I’m fully in favor of most investors engaging a financial planner, ideally a fee-only or at least a fee-based one, as opposed to one paid by commissions on product sales. I’ve argued that the heart of what I call The Findependence Day Model is a self-directed investor who buys ETFs or individual securities through a discount brokerage but ALSO receives guidance through a fee-only or fee-based advisor or financial planner.

In the book, there are not one but TWO characters who are CFPs: Theo, the grizzled veteran who has achieved his own Findependence Day and charges a low annual fee for clients who want to mimic his personal portfolio; and Bernie, the frugal financial planner who moonlights as a record store owner.

It should be obvious that if you’re paying someone to be your financial planner, then you should be getting a financial plan. If you’re paying on a fee-based model (i.e. asset-based), then the comprehensive financial plan should be included. If you’re paying on a fee-only basis, then it’s quite acceptable for the financial planner to invoice you for the preparation of this detailed plan prepared at or near the onset of the relationship.

– 61 –

Findependence Day: How to achieve Financial Independence — while you’re still young enough to enjoy it

Findependence Day Book from Jonathan CheverauFindependence Day is a financial primer that uses classic fiction structure to impart core financial concepts to young people just embarking on the working world and raising a family.

Findependence is a contraction of Financial Independence, so Findependence Day is the moment far off in the future when your income from all sources exceeds the income you could get from a single employer. Henceforth, you work because you want to work, not because you have to.

The financial concepts roll out in the order of a normal human “life cycle,” proceeding from saving for college, graduating, landing a first job, enrolling in an employer pension plan, getting married, buying a first home, saving for retirement, raising children. Then the cycle resumes as you save money for the education of your children, and they need to learn the same concepts as they graduate and confront the working world.

The thrust of the novel is to impart enough major concepts that if all of the suggestions were implemented, you would achieve financial independence while you’re still young enough to enjoy it. Thus, in the book, a young couple named Jamie and Sheena want to reach their Findependence Day at the relatively young age of 50.

This is not a get-rich-quick book but is about getting rich slowly, whether through financial assets, pensions, real estate or — ideally — a combination of all of these.  It takes 20 or 30 years to achieve financial independence and the book follows the couple over 22 years: hence the “financial Pilgrim’s Progress” description of one reviewer.

The book begins when Jamie & Sheena are 28 and featured guests on a financial reality TV show. Humiliated by their credit card debt before a nationwide TV audience, Jamie vows his Findependence Day will be the day he turns 50. But Sheena won’t buy into the “guerrilla frugality” habit needed to save money.

Jamie prefers stocks and financial assets and wants to be an entrepreneur. Sheena on the other hand has a comfortable teaching job and expects a generous Defined Benefit pension plan when she retires. She feels uncomfortable with Jamie’s punts on the stock market, urging him to invest instead in something more tangible, like the bricks and mortar of real estate.

Their disagreements over money escalate, as Jamie stakes everything on the big score when his hobby website attracts a big social networking site. Betrayed by his business partner, his world falls apart, threatening his dream of early financial independence.

All-American edition now available, including as e-book

In April 2013, Trafford.com published the new revised all-U.S. edition under the same title, in both hardcover and soft cover, plus most major e-book formats (just $3.99 for e-books). The plot and characters are almost the same, but the setting is entirely in the United States (chiefly Chicago, Boston, Maine and Florida). The financial content is all-American and current as of early 2013, so it’s all about IRAs, Social Security, Roth plans, 529 plans etc., with no Canadian content whatsoever. The manuscript was vetted by several American financial planners, including Garrett Planning Network founder Sheryl Garrett, who also penned the new foreword. Also new is a glossary and end-of-chapter summaries of the new financial concepts Jamie and Sheena learned in the preceding action.

Click here to purchase directly from Amazon.com, Barnes & Noble or Trafford.

Click here to order your copy of the Canadian edition of Findependence Day