TWI#49 - Avoid the Retirement Trap: Reverse Engineer Your Life

5 min read.

Today's Overview:

1. Our idea of retirement as a super exciting and happy time may not always match reality. This is because our retirement plans are based on how we feel now, rather than how we might feel later when things change.
2. Avoid the common trap of saying we'll be happy "when" something happens, such as retirement or becoming wealthy. It's not wise to postpone all happiness for the future. You should question whether being "retired and rich" is the only path to happiness.
3. The traditional idea of retirement is that you work really hard for a long time, and then finally get to enjoy life afterward. However, this idea is flawed. We need much less in retirement than we believe. It doesn't have to be as difficult as we make it out to be.
4. Rethink retirement planning with this thought experiment from Dr. Peter Attia's book, "Outlive: The Science & Art of Longevity."

This week, I went to a coffee shop with my friends and had a long conversation with one of them about retirement.

This friend is very successful but always complains about not having enough time for fun things.

His plan is to work really hard for the next ten years to hit a certain financial goal, retire, and spend more time with his teenage kids and pursue his hobbies.

Many of us wait for the good stuff, thinking the future will be amazing.

We dream of free time, good health, lots of money, and great relationships.

But what if that future isn't as great as we imagined? What if, just as we're getting close, it moves farther away?

What if we finally reach it and it's not as awesome as we thought?

In today's discussion, we'll talk about why waiting for happiness may not be the best plan, the retirement trap, and how to reverse engineer retirement by beginning with the end in mind.

Let's dive in.

The Dangers of Waiting to be Happy

The Wall Street Journal recently made a cool chart about how retired folks spend their time.

Source: Wall Street Journal Article Here’s What Retirement Looks Like in America in Six Charts - WSJ

According to the chart, retirees spend most of their time sleeping (9 hours), relaxing and having fun (6 hours), and watching TV (4.5 hours).

They don't spend much time reading (0.5 hours), hanging out with friends (0.5 hours), or exercising (0.3 hours).

We often imagine retirement as an awesome time filled with exciting activities, but the truth might be different.

Our perception of retirement is based on how we are now, when we are full of energy, health and friends. But when we retire, things might change.

Sometimes, we get trapped in the mindset of "When I get [something], then I'll be happy". It's not that waiting for good things is bad, but it's not cool when we put off ALL happiness for the future and believe that only some big achievement will make us happy forever.

People often say that retiring with lots of money is the best thing ever, but here's a different way to look at it.

When we focus too much on getting super rich for retirement, we might miss out on the simple joys of life and the people we care about.

We end up working so hard for a big bank account that we forget to enjoy life along the way.

Moreover, being "retired and rich" assumes that having lots of money will make us super happy, but that's not always true.

It's a trap. We say we'll be happy and do all the things we want to do... when we retire.

Reframing Retirement:

Here's my opinion: we should reconsider how we view retirement.

The traditional idea of retirement is that you work hard for many years, then finally get to enjoy life afterwards. However, I believe this concept is flawed.

We project our current selves into the future and become so anxious about saving and investing for retirement that the required amount seems insurmountable and intimidating. It's even so daunting that some of us never even start.

The reality is that we need a lot less for retirement than we believe. This doesn't have to be as difficult as we make it out to be.

A Thought Experiment to aid in Retirement Planning

IIn his popular book, "Outlive: The Science & Art of Longevity," Dr. Peter Attia introduces an interesting idea to help plan for our later years.

He suggests focusing on "the ten most important physical tasks you will want to be able to do for the rest of your life."

These tasks can be specific, like athletic challenges (such as doing pull-ups or swimming a distance), things you enjoy doing (like hiking), or even everyday activities (such as picking up a child or carrying groceries).

Here's an example of what such a list might look like:

1. Go for a one-hour walk in your neighborhood.
2. Lift a small child up from the floor.
3. Do 30 minutes of resistance training.
4. Complete 5 pull-ups, 5 push-ups, and 5 body squats in 5 minutes.
5. Play with your grandkids in the yard for 15 minutes.
6. Carry heavy bags or groceries from your car to the house.
7. Climb stairs without needing help.
8. Have fun tossing a child in a swimming pool.
9. Hike a 3-mile trail with moderate difficulty.
10. Get up from the floor without assistance.

Dr. Attia uses this list as a reminder to focus on staying active and healthy as we get older. By thinking about what we want to do when we're 100 (or 80 or 90), we can make sure we're taking the right steps today.

While Dr. Attia's Decathlon focuses on physical tasks, it's also helpful to think about other goals, including retirement planning, not just for our bodies but for our overall well-being.

Your Ideal 80-Year-Old Life

What does your ideal life look like at age 80? What does your idea life look like when you are 70 or 65? How about when your are 40?

1. Who are you with?
2. Where are you?
3. What are you doing?
4. How do you feel?

Here's how I picture my perfect life when I'm 80 years old:

1. I'm healthy, both in body and mind.
2. I'm sitting on a sunny porch with my happy wife beside me.
3. My kids are around, and we're having conversations.
4. My grandkids are playing in the yard.
5. Friends come over for a big dinner.

Notice that most of these things don't depend on having lots of money. They're not things you can buy; they come from how you act and what you do every day.

Starting by thinking about this ideal future helps you figure out what you should focus on right now:

1. Want to be healthy at 80? Take care of your body and mind every day.
2. Want a happy partner? Be loving and caring every day.
3. Want your kids to want to be with you? Be a supportive and loving parent every day.
4. Want good friends you can laugh with? Be a loyal and fun friend every day.

This simple exercise can change how you live your life today. It helps you understand what retirement really looks like and what really matters. It makes you start with the end in mind.

Action Steps

Take a journal or a piece of paper and write it down:

1. What does your perfect future look like?
2. What does that mean you should do today?
3. Now that we’ve softened up what retirement looks like, how much money do you need?
4. Use my Critical Mass Index Guide and Calculator to help you decide how much money you need to save for retirement.
5. Get started.

Write it down and keep it somewhere you can see it. It'll be like a map guiding you where you want to go. You may have to do this again as life changes.