LIVING COMFORTABLY during your retirement years doesn’t necessarily mean harsh sacrifices while working or earning seven figures for decades. Retirees who have enough to live well tend to credit years of good financial habits. “It is important to plan properly, know your goal and then initiate the discipline needed to reach your objective,” says Guy Baker, founder and managing director of Wealth Teams Alliance in Irvine, California. Below, six individuals share advice on how to create a financially fulfilling retirement. Steps include:
- Make investing easy.
- Set smart spending habits.
- Be disciplined about saving.
- Look for an employer-sponsored plan.
- Make the most of what you have.
- Overcome setbacks along the way.
Make Investing Easy
Leif Kristjansen worked as a research scientist and wanted to retire early to spend more time with his family. “My savings goal was to save 60% of my income, and it paid off,” Kristjansen says. “Now I spend a lot of time with my kids.” During the years that he set aside money for retirement, Kristjansen, who lives in Toronto, followed an index investing strategy. An index fund is a mutual fund or an exchange-traded fund that is set up to mimic the performance of the market. “It’s simple, meaning you don’t really need to think before moving your money out of your bank savings account,” Kristjansen says. “It takes 15 minutes with an online broker, and you are off to the races.”
Set Smart Spending Habits
As he earned more during his financial career, Bradley Nelson of Lafayette, Indiana, saved the extra cash rather than spending it. “I’m now almost 60 and retired three years ago,” Nelson says. “I haven’t significantly changed my spending habits since I was 30, although I received many raises and promotions since then.” At times he didn’t have as big a house or as nice a car as peers, but he was able to maintain a comfortable lifestyle. “I don’t think spending more would have made me any happier, then or now,” Nelson says. “I now find myself living off the income of my investments rather than having to dip into capital.”
Be Disciplined About Saving
When Pablo Solomon, who lives outside Austin, Texas, married his wife, Beverly, 43 years ago, they put up a poster board divided into 100 squares. “We wanted a visual way to keep track of our savings and to keep us motivated,” Solomon says. “Each square represented $100 saved, and when we put aside $100, we put a gold star in a square.” After filling the chart, the couple agreed to live on one source of income and put any other money into savings and investments. “We tenaciously stuck to this promise even when it was difficult to do so,” says Solomon, a former designer now transitioning into retirement. Over the years the couple held several side businesses, and used the income from these gigs to save for retirement. “We feel blessed that we have met and even surpassed our savings goals and can live as securely and enjoyably as is possible in an ever-changing world.”
Look for an Employer-Sponsored Plan
When Carol Gee of Atlanta entered the Air Force, she kept a goal of working long enough to become eligible for a pension upon retirement. Later in life, she took on a second career as an administrator at a university, a position that included a retirement plan. “I have funds from both my earlier careers,” Gee says. She recommends asking employers about available pensions, 401(k) plans or other retirement benefits. “In seeking new positions, try to choose those where these funds can roll over so the savings can continue,” Gee says.
Make the Most of What You Have
During her years of working as a political consultant, Kelly Hayes-Raitt of Santa Monica, California, focused on functioning within her means. “I lived frugally and avoided debt,” Hayes-Raitt says. When she decided to retire from her political career, she realized her home was a significant asset. “I fixed it up as a vacation rental and embarked on a new lifestyle of full-time travel and housesitting,” Hayes-Raitt says. “I’ve been housesitting for over a decade and have traveled all over the world.”
Overcome Setbacks Along the Way
William Seavey of Cambria, California, spent his working years in journalism and running a number of businesses. But after getting married and divorced, his finances took an unexpected hit. Upon remarrying, he and his new wife evaluated their money situation. “We are both products of divorces, which set us back significantly,” Seavey says. The couple looked for ways to improve their finances and took advantage of the real estate market. They sold properties at a good time and brought in some additional funds. “We pooled the money, paid off the house and started a bed and breakfast,” Seavey says. To prevent future pitfalls, the couple researched ways to build a diversified portfolio, which includes investments in stocks and bonds. “Avoid as much debt as possible, particularly with credit cards, and work toward paying off a mortgage by doubling down on payments,” Seavey says.
